What is the budget for the agricultural sector in Kenya?

Kenya Second Household In the shadow of COVID-19, the pandemic is economic recovery Uhuru Kenyatta’s Legacy Project. In the President’s final fiscal year, the focus is clearly on completing ongoing investments and creating a favorable environment for economic recovery to protect livelihoods.

The agricultural sector, which received a slightly larger share of the budget, remains an integral part of the country’s economic recovery strategy. The sector contributes 34% to the gross domestic product. He also has a relatively strong performance. The pandemic hit more than any other sector of the economy.

However, there are challenges within the sector that require increased investment from both the public and private sectors. In 2020, widespread flooding damaged agricultural land and increased post-harvest losses. The desert locust epidemic in arid and semi-arid areas also destroyed around 175,000 hectares of arable land and meadows. This affected the lives of around 164,000 households.

After all, the COVID-19 pandemic disrupted the food supply chain at the start of the pandemic. This terrible confusion in both formal and informal supply chains. However, the effects of the pandemic have reduced income opportunities in these sectors, allowing the sector to support more people who have entered the sector from other sectors such as services and industry.

The household deals with these issues but can be challenging in keeping promises. On the one hand, the government is struggling to generate sufficient income to support spending. It is also difficult to keep spending under control borrowing within allowable limits.

In addition, Kenya needs to address spending inefficiencies in order to meet the budgetary objectives. These include: increasing the effectiveness of public spending by allocating funds to the most influential programs, providing project funding when needed, and reducing wasted spending.

Allocation to agriculture

In the budget, 2.4% is earmarked for centrally administered agriculture, compared to 2.2% in the previous year. In addition, due to the delegation of the Kenyan government system, further public investments in this sector are made by the district government.

The budget allocated to the district administration is 12% of the total budget. To date, the district government has allocated an average of 6% of its budget to agriculture. Therefore, if the county government maintains the same pattern as before, total government investment in this sector is expected to be around 3.2% of the total budget.

This means that the overall financing of the sector is still far from Kenyan internationality. Commitment 10%.

On the positive side, this year’s agricultural budget was distributed more equitably between the subsectors. Programs to promote climate change and resilience to change are funded. For example, there are also means of increasing the productivity and incomes of smallholders by providing subsidized farm inputs.

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There is also a transition from large-scale irrigation projects to small-scale irrigation projects. Corruption in large irrigation projects and misappropriation of funds. New funds for small irrigation and value-added projects are intended to counteract this.

Kenya’s livestock subsector is constrained by low productivity, high production costs and poor market access. Farmers also have inadequate access to quality improvement support such as dissemination services, artificial insemination and veterinary services. In addition, the effects of climate change hit the shepherds, who make up the majority of herdsmen. With this in mind, the national equity program allocations are consistent with risk mitigation and resilience measures.

There are also some tax measures. These include import tax exemptions on inputs for the textile and clothing industry. This is intended to support the revitalization of the cotton-growing areas. The other is the imposition of import duties on leather products. It aims to improve the fate of the ailing leather industry.

In addition, a new fish processing facility near Lamb’s new port on the coast has an allocation of Ksh 1 billion (approximately $ 10 million). The government also plans to complete another processing facility in Mombasa, the country’s main port. Continue investing in the blue economy three times the current contribution We will add to GDP by harnessing untapped marine resources.

task

Overall, budget spending is a top priority for the President’s Grand Agenda, including food security. The spending is also a 10 year government growth strategy for agriculture. The plan aims to increase the productivity and incomes of smallholders and to increase the added value of agricultural production and increase the food security of households.

But it remains to be seen whether the government can shake off the worst of the 2020/21 budget year. Above all, the government should finance the program with sufficient income. This had a timely effect on the disbursement of the funds to the central expenditure department.

The 2020/21 budget was constrained by a lack of liquidity as the government struggled to increase revenue during the pandemic. After that the government became big debt and increasing the consolidated debt repayment funds will be a big drainage. Increased debt can threaten macroeconomic stability, discourage investors, and make it difficult to attract investment, especially when the government is threatened with default.

Government must also maintain political stability In the wake of the constitutional referendum ahead of the parliamentary elections in August 2022. In the past, elections (and the risk of instability) have been associated with economic slowdowns.

This will severely limit the development of the transformation agenda due to a lack of public and private investment in this sector.

Author: Timothy Njagi Njeru-Egerton University Tegemeo Institute Research Fellow

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