Standout Proposals & Where Ruto Allocated First Ksh3.6 Trillion Budget
The lion's share went to the Ministry of Education which got Ksh630 billion.
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Treasury Cabinet Secretary Njuguna Ndung'u, on Thursday, June 15, spent three hours and 20 minutes explaining how President William Ruto's government would spend the Ksh3.6 trillion budget for the 2023/2024 financial year.
Education
The lion's share went to the Ministry of Education which got Ksh630 billion. This translates to 27.4 per cent of the budget in the quest by Ruto's government to provide accessible and quality education.
The capitation of Junior Secondary Schools (JSS) was increased to Ksh25.5 billion from Ksh15 billion.
At the same time, the Higher Education Loans Board (HELB)'s allocation doubled from Ksh15 billion to Ksh30 billion.
Treasury CS Njuguna Ndung'u reading the 2023/24 budget in Parliament on June 15, 2023. /PARLIAMENT OF KENYA
Ksh5 billion was allocated to the school feeding programme while the government hopes to hire 20,000 teachers and TVET tutors and construct 21 Kenya Medical Training College KMTC campuses (KMTC).
Health
The Ministry of Health, under CS Susan Nakhumicha, got some Ksh141 billion, with additional funds allocated to counties.
Ksh18.4 billion went to Universal Health Coverage (UHC) while malaria and HIV/AIDS programmes received Ksh24.8 billion.
Hustler Fund
The Hustler Fund was allocated Ksh10 billion to support entrepreneurial endeavours.
"To further support MSMEs, women and the youth of this country, I propose to the National Assembly to effect an additional budget allocation of Ksh10 billion towards the Hustler’s Fund, Ksh300 million to SMEs in the manufacturing sector, Ksh182.8 million for women enterprise fund, Ksh175 million for youth enterprise and development fund and Ksh192 million to Uwezo Fund," CS Ndung'u proposed in his speech at the National Assembly.
Affordable Housing
The government expressed commitment to turn the housing challenge into an economic opportunity to create quality jobs. This will be achieved through facilitating the delivery of 250,000 houses per annum and enabling affordable housing mortgages.
"I propose to the National Assembly to effect the budget allocation of Ksh35.2 billion for the housing program," the CS stated.
The Housing Levy at the same time had its contribution by employers and employees reduced from 3 to 1.5 per cent, with Ruto to supplement the Ksh32.5 billion with the deductions estimated to be Ksh83 billion per year.
Roads, Railway City & SGR
The government allocated Ksh250 billion to road construction, prioritizing the completion of stalled and ongoing projects, that is, Ruto promised to complete road infrastructural projects started by former President Uhuru Kenyatta.
Slide through the photo using the dot at the centre to view the budget allocations (Part 1)
Ksh7.4 billion will carter for the extension of the Standard Gauge Railway (SGR). Some Ksh889 million will be for the development of Nairobi Railway City; Ksh1.1 billion for the Nairobi Bus Rapid Transit (BRT) project and Ksh300 million for acquisitions of ferries for Lake Victoria.
Security
The government allocated Ksh338.2 billion for security-related ministries and agencies, with Ksh144.9 billion allocated to the Kenya Defence Forces (KDF) while the National Intelligence Service (NIS) was allocated Ksh44.3 billion.
The National Police Service (NPS) was allocated Ksh98.6 billion with another Ksh8.8 billion going towards the leasing of police vehicles.
"To step up the war on crime and enhance support to the administration of justice, I propose to the National Assembly to effect the budget allocation of Ksh856 million to equip the National Forensic Laboratory," added the CS.
Social Protection
CS Ndung'u proposed to the National Assembly to effect the budget allocation of Ksh38.2 billion for social protection and affirmative action. Out of this, Ksh18 billion will cater for cash transfers to the elderly, Ksh7.9 billion for orphans and vulnerable children and Ksh1.2 billion for persons living with severe disabilities.
"To further empower our women, I propose to the National Assembly to effect the budget allocation of Ksh245 million to strengthen prevention and response to gender-based violence in Kenya, Ksh3 billion for the Kenya Government Affirmative Action Fund," he continued.
Agriculture
Ksh5 billion was allocated to the Fertiliser Subsidy Program in President Ruto's push to lower the cost of food.
After assuming office, Ruto reduced the price of fertilizer from Ksh7,000 to Ksh3,500 and wooed investors to build manufacturing companies in the country. The President also pledged to shift the nation from overdependence on rain-fed agriculture to irrigation.
Other allocations
- Ksh25 billion will be used to clear arrears for unpaid oil subsidies, a programme initiated by President Uhuru Kenyatta.
- Ksh3 billion will be used to complete the construction of 181 stalled markets initiated in 2008.
- Counties will receive Ksh4.7 billion as conditional grants to establish industrial parks.
- Ksh856 million was allocated to National Forensic Laboratory to help in the government's plan of equipping the facility.
- The government also allocated Ksh13.1 billion for the National Youth Service (NYS).
- The Sports Fund was allocated Ksh6.4 billion, way less than last year's budget of Ksh15.8 billion
President William Ruto dribbles a football at State House, Nairobi on May 15, 2023. /PCS
Standout Proposals
It was proposed for the reduction of excise duty from 12% to 10% of the excisable value of the fees charged for money transfer services by cellular phone service providers or payment service providers licensed under the national payment system. This will encourage retail transactions at a more affordable rate.
Another proposal was for the National Assembly to amend the VAT Act to remove the preferential rate on petroleum products so that the products will be subject to the standard VAT at 16%
Prof Ndung’u proposed to introduce an excise duty rate of 15 per cent of the excisable value of fees charged on advertisement by all TVs, print media, billboards and radio stations in promotion of alcohol, betting, gaming, lottery and price competition is a positive step.
"Consumption of alcohol, betting, gaming and lottery and price competition are extremely addictive and resort to harmful repercussions in society.
"In order to discourage these activities and consumption of alcoholic beverages, I propose to the National Assembly to introduce an excise duty rate of 15 per cent of the excisable value of fees charged on advertisement by all TVs, print media, billboards and radio stations in promotion of alcohol, betting, gaming, lottery and price competition," he explained.
At the same time, he also proposed for the National Assembly to increase the rate of excise duty on betting, gaming, price competitions and lottery from the current 7.% to 12.5%, with remittance of excise duty being made within 24 hours after the closure of the transaction.
Slide through the photo using the dot at the centre to view the budget allocations (Part 2)
To ease the process of VAT exemption on aircraft spare parts and encourage investment in this area, the CS proposed to the National Assembly to remove VAT on all aircraft simulators for training our pilots and aircraft spare parts.
To protect the local assembly of smartphones and other mobile phones, Kenya was allowed to extend the import duty rate of 25% as well as to extend the duty-free importation of inputs for the assembly of smartphones and other cellular phones. This is coming amidst plans for Kenya to assemble its first-ever smartphone.
Guided by best practice, the government intends to change the public debt ceiling from a numerical number to a debt anchor inform of a ratio of public debt to GDP in present value terms.
Also proposed were a 3% digital asset tax and a 5% withholding tax on income generated through digital content monetisation. This would enable content creation online to grow across the country.
"Consumption of sugar has been associated with various ailments such as Diabetes which has become common in many families. To discourage the consumption of sugar, I propose to the National Assembly to introduce excise duty on imported sugar at a rate of Ksh5 per kg but this excludes sugar imported or purchased locally by registered pharmaceutical manufacturers for use in the manufacture of pharmaceutical products," CS Ndung'u suggested.
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