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Kenya Fight Inequality Alliance Budget Press Release

ANALYSIS OF BUDGET POLICY STATEMENT BY KENYA FIGHT INEQUALITY ALLIANCE Big changes needed to budget for it to serve ordinary Kenyans, say campaigners

The Budget Policy Statement (BPS) for FY 2021/22 will be delivered by the Cabinet Secretary for National Treasury and Planning in the National Assembly on Thursday June 10, 2021. The Kenya Fight Inequality Alliance is pressing for changes that will affect the lives of millions of Kenyans living on the frontlines of inequality.

The levels of inequality have spiraled during the pandemic, campaigners said, and now is the time to make structural changes to the economy to ensure the ‘recovery’ from the pandemic will not further exacerbate inequality in Kenya.

The proposed budget still serves the rich, and inequality activists call for an Usawa Budget as Parliament debates and approves the details this month.

“Our leaders and members of the National Assembly must represent the interests of the majority. We are challenging the members of the National Assembly to pass a budget for the people, not the rich, by rejecting the proposal to increase VAT on milk, bread and infant formula. A budget that will give all Kenyans the opportunity to experience quality public services and a dignified livelihood,”’ said Antonia Musunga, national coordinator of Kenya Fight Inequality Alliance.

"Parliament must work and pass a people-centred budget. A budget that puts the needs of ‘Wanjiku’ first by prioritizing the basic rights that are guaranteed in our Constitution, Article 43 (1): the right to good healthcare, food security, clean and safe water, social security and education. These rights are not negotiable and should be adequately financed in the national budget," said Ciiru Njoroge, a member of the Fight Inequality Alliance from Kabete Constituency.

Kenya Fight Inequality Alliance’s analysis of the Budget Policy Statement is as follows:

Summary of Issues

Overall Budget

  • The National Assembly should reiterate the commitment to manage fiscal deficit by keeping the Budget Deficit within a ceiling of Ksh930 billion as was recommended in the Budget and Appropriations Committee Report on the Budget Policy Statement 2021. The tabled budget in the National Assembly has a deficit of Ksh1.015 trillion, which is above the threshold set by Parliament.
  • The National Assembly should scrutinize the ordinary revenue estimates of Ksh1.8 trillion to ensure the projections are realistic and achievable in light of the global Covid-19 pandemic. Kenya has struggled to meet its revenue targets over the years, even before the Covid-19 pandemic. Therefore, Parliament should carefully evaluate the justifications given by the National Treasury on the revenue projections provided in the budget summary that was tabled together with the budget estimates.
  • The National Assembly should ask the National Treasury to realign the targeted revenue and expenditure with the tax and public expenditure reforms outlined in the Economic Recovery Strategy, including consolidation of state-owned enterprises to reduce expenditure pressures and create fiscal space.
  • The National Assembly should consider expenditure reductions to bring down the deficit, which will reduce additional borrowing.
  • The national government should cut any excessive and non-core spending, such as hospitality, training, travel (domestic and international), and costs associated with advertising and purchasing office furniture and office supplies. The National Treasury should work to bring down the public sector wage bill that continues to be above the threshold of 35% provided for in the Public Finance.

Management (PFM) Act. Further, we recommend that the government keep its expenditure as provided for in the FY 2020/21 budget.

Equity

  • We demand that that the National Assembly evaluate the amendments proposed in the 2021 Finance Bill from an equity perspective and ensure the debt budget is shared fairly across different populations. Tax proposals that increase the cost of living for the majority of vulnerable households should not be approved.
  • The National Assembly should demand that when the list of all development projects is presented in the National Assembly, it provides a column indicating the intended beneficiaries and how this will improve the inequalities in access to public services.

Health

  • There is a need for allocating funds for the recruitment of more health staff to address the staffing gap, more so in light of the current situation of the Covid-19 pandemic. This is key to ensuring a functional (efficient, accessible and affordable) primary health care system that delivers quality essential health services, which remains most critical to achieving UHC and improving health outcomes.
  • We observe that the budget for health research and development (HRD) predominantly focused on buildings, constructions and protocols. These priorities make it challenging to assess the return on investment, mainly because of the current needs for health technologies, such as vaccines, drugs, diagnostics and other health tools critical in tackling pandemics such as the Covid-19 pandemic. The budget allocation falls short of what is desirable to safeguard the well-being of the Kenyan people.
  • Allocate a budget for the Covid-19 vaccines to avert the crisis due to problems of vaccine access from Covax. Funds should also be allocated to subsidize the cost of Covid-19 testing, which remains high and unaffordable to the majority of Kenyans

Water

  • We demand that the National Assembly task the Ministry of Water to prioritize few viable and most strategic water projects and strengthen internal funding sources to mitigate the decline or withdrawal of donor funding. The National Assembly should review and enhance the coordination frameworks for all MDAs in water service delivery. Overdependence on financing from donor funding to key government functions/projects has been one of the challenges cited for poor budget implementation in the sector.

Social Protection

We demand that the National Assembly:

  • Adjusts the cash transfer amount to protect the beneficiaries from the erosion of the value of the cash transfers due to inflation.
  • Increases the transfer amounts by taking into account the household size.
  • Increases the number of vulnerable household and individuals targeted by social protection initiatives to include urban poor and women led households.

About Us

The Kenya Fight Inequality Alliance (FIA) is a coalition of organizations fighting inequality in Kenya. It includes rural, youth, labour, climate justice, women’s rights, urban, artists, land rights and social justice movements. Kenya FIA works on the premise that the gap between the rich and poor adversely undermines access to social services and the protection of fundamental human rights. This is because the amassing of wealth by the rich and elite translates to power and influence on national development priorities.

Kenya FIA was founded in Nairobi, Kenya in 2017 with the objective of collectively advocating more equal and fair societies. The most affected are in the front lines of challenging the status quo. They include women, youth, persons living with disability, indigenous groups and urban poor. Inequality needs to be reversed for us to achieve a just, equitable and sustainable Kenya.

For media enquiries/interview requests

Antonia Musunga, National Coordinator, Kenya Fight Inequality Alliance antonia.musunga@fightinequality.org

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