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

Kenyan inequality protest

25th January 2021, Nairobi, Kenya - As the National Assembly of Kenya prepares for the approval of the Budget Policy Statement (BPS) due February 28, 2021, 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 spiralled 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 the details this week. 

“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. A budget that will give all Kenyans the opportunity to experience quality public services and a dignified livelihood,”’ saidAntonia Musunga, national coordinator of Kenya Fight Inequality Alliance.

"Parliament must work and pass a people-centered budget. A budget that puts the needs of “Wanjiku” first by prioritising 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:

Tax

The BPS proposes reversing  the tax reliefs which were introduced in April 2021 on Value Added Tax on basic foods such as maize flour. These measures were key in reducing the inequality gap as they reduced the amount of money Kenyans paid for basic goods. They must now be extended and made permanent. Additionally, there is a need to shift the model of revenue collection by taxing the poor less: decrease Value Added Tax and tax big corporations and the richest more. For instance, increase the capital gains tax from 12.5% and income tax for high income earners.

The BPS proposes bailing out of hotels through the Tourism Cooperation Department by giving them soft loans. We demand that these funds are reallocated to small and medium local businesses, which will benefit more Kenyans.

Health

In the recent past, doctors, nurses and other medics have gone on strike to fight for better salaries, wages and working conditions. In some cases, courts ordered that these conditions are improved. For Instance, in August 20202 the Employee Labor Relations Court in Kisumu ordered that the Kisumu County Government promote and back dates salaries for 126 doctors  whose rights had been violated. The Budget Policy Statement does not currently address the labour issues that the health personnel have won in industrial courts by allocating more money to human resources in the health sector.

While the Budget Policy Statement talks extensively about the health sector including funding Universal Health Coverage, there is in reality a small  budget allocation to health which does not factor in the UHC scheme.

There is no budget allocation for a Covid-19 vaccination programme.

There is still a high dependence on donor loans to fund critical health developments. However, several of these have been cancelled due to high levels of corruption and mismanagement of funds e.g. Wajir District Hospital was cancelled by the financier. Also, Rongai Trauma Hospital project stalled. This was funded by the OPEC Fund for International Development  which cancelled its loan. Kenyans need public health, and it is currently unclear how the government is responding to declining or withdrawn donor funding.

Social Protection 

The Covid-19 pandemic has severely impacted the economy, disproportionately affecting vulnerable groups such as persons with disabilities and women, especially those that are currently not included in government social protection programmes.

Most targets for Kenyans to receive cash transfers were not achieved during the pandemic. However, target groups needed this vital support during this time.

The funding to the Department of Social Protection is being reduced, despite the number of proposed recipients of cash transfers going up. To cover the shortfall in this crucial area, the government must consider reallocating funds from non-essential expenditures like national security.

Education

The budget share has declined by 1% despite the need for improved education services in the country. Over the last 3 years the number of children enrolling in school has been rising, and the budget does not reflect this.

The education system is more strained under Covid-19. For example, students who were in private schools have now moved to public schools. The budget has not increased to respond to this.

Post covid-19 Economic Recovery Strategy

Building back better: strategy for resilient and sustainable economic recovery must include:

Socio-economic Empowerment of Women, Youth and PWDs though increased cash transfers and no bailing out of the hotels as proposed in the BPS.

Operationalisation of National Gender Based Violence Emergencies Working Group to respond to Sexual and Gender Based Violence Cases.

Operationalisation of the Victims Trust Fund for survivors of Human Trafficking.

Introduce a Covid-19 vaccine budget to ensure availability for all Kenyans regardless of socio-economic class.

Specifically, Kenya FIA challenges Members of Parliament to take the following crucial measures:

-  Hold to account the judiciary and the Asset Recovery Unit to recover the money that has been lost to corruption and use it to fund public services for

- Push the executive to negotiate further debt restructuring and cancellation to avail more funds to purchase vaccinations for all Kenyans at no cost.

- Allocate more money to education. The budget share has declined by 1% despite the need for improved education services in the country. Over the last 3 years the number of children enrolling in school has been rising, and the budget does not reflect this state of affairs.

- Allocate more money to health. While the Budget Policy Statement talks extensively about the health sector including funding Universal Health Coverage, there is in reality a small budget allocation to health which does not factor the commitment to sponsor poor households in the UHC scheme.

- Allocate more money to social protection. The funding to the Department of Social Protection is being reduced, despite the number of proposed recipients of cash transfers going up.

For  media enquiries/interview requests.

Antonia Musunga, National Coordinator, Kenya Fight Inequality Alliance

antonia.musunga@fightinequality.org | +254720061742