Maintain financial discipline for growth

National Treasury Cabinet Secretary Henry Rotich at Treasury buildings in Nairobi on June 12, 2014. Taxpayers should brace themselves for increased levies as the government’s spending rises in the next financial year to about Sh2 trillion, up from Sh1.8 trillion. FILE PHOTO | SALATON NJAU | NATION MEDIA GROUP 

In Summary

• The government has also earmarked a huge allocation for infrastructure, including the standard gauge railway from Mombasa to Nairobi that is expected to be completed by 2017.
• The energy sector will receive substantial amounts to cater for geothermal development and expansion of electricity supply. Social sectors such as education, health, and welfare programmes will also benefit significantly.

Taxpayers should brace themselves for increased levies as the government’s spending rises in the next financial year to about Sh2 trillion, up from Sh1.8 trillion.

Contrastingly, the government estimates that its revenues will cap at Sh1.3 trillion which, though an improvement over this year’s Sh1.2 trillion, still leaves a huge deficit.

In the budget proposals released yesterday by the National Treasury, more funds are being allocated to security and infrastructure, two pillars recognised as central to economic revival and growth.

The government plans to spend Sh112.5 billion on security, an additional Sh13.6 on last year’s. The objective is to cushion the country against terrorism and other forms of insecurity that have caused devastation and shaken the economy.

HUGE ALLOCATION

The government has also earmarked a huge allocation for infrastructure, including the standard gauge railway from Mombasa to Nairobi that is expected to be completed by 2017.

The project has been allocated Sh118 billion, while another Sh58.5 billion is assigned to on-going road construction.

The energy sector will receive substantial amounts to cater for geothermal development and expansion of electricity supply. Social sectors such as education, health, and welfare programmes will also benefit significantly.

Even so, the imbalance between consumption and revenue generation should be a cause for worry. Although commendable efforts have been made to expand the tax base, the revenues still fall short of expectation.

Much more must be done to improve tax collection and minimise borrowing. The ongoing staff rationalisation should be followed to its logical end to weed out baggage and ensure a lean and productive work force. Financial discipline is an imperative to guarantee economic growth