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{
"id": 1000936,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1000936/?format=api",
"text_counter": 169,
"type": "speech",
"speaker_name": "Amb. Ukur Yatani",
"speaker_title": "The Cabinet Secretary, National Treasury and Planning",
"speaker": null,
"content": "Hon. Speaker, the Financial Year 2020/21 Budget responds to the current challenges facing Kenyans, businesses and the economy at large in the wake of COVID-19 pandemic. It is in this context that we have chosen the theme for this Budget as “Stimulating the Economy to Safeguard Livelihoods, Jobs, Businesses and Industrial Recovery”. The theme underscores our determination to protect lives, livelihoods and cushion vulnerable citizens against the adverse effects of COVID- 19. This is further expected to create and protect jobs, stimulate industrial growth and ultimately steer economic recovery. In order to sustain efforts towards the full recovery of the economy, the Government is currently developing a Post COVID-19 Economic Recovery Strategy under the leadership of His Excellency the President. The strategy will not only accelerate economic recovery, but is designed to provide a road map for transition to a new development framework beyond the current Vision 2030. Hon. Speaker, allow me now to highlight the economic policy context in which this Budget has been prepared. In framing this Budget, we have taken into account recent economic developments on the global and domestic scene. The Budget was prepared against the background of a contracting global economy occasioned by the outbreak of the COVID-19 pandemic, which has disrupted most aspects of human life. Indeed, most world economies remain on lockdown. As a result, in April 2020, the IMF projected that the world economy will experience a negative growth rate of 3.0 per cent in 2020. This is worse than the growth reported during the 2008/2009 financial crisis. However, on a positive note, world economic growth is projected to rebound to 5.8 per cent in 2021. Overall, economic growth in advanced economies is projected to contract by 6.1 per cent in 2020, while that of emerging and developing countries including China, India, Russia and Brazil, is expected to contract by 1.0 per cent in 2020. Equally, economies in Sub- Saharan African region are projected to contract by 1.6 per cent in 2020 before a rebound to grow at 4.1 per cent in 2021. In addition to the adverse effects of the COVID-19 pandemic, the Kenyan economy is confronted by the impact of desert locusts and floods that have caused deaths, displacement and destruction of infrastructure across the country. From these three simultaneous shocks, all sectors of the economy have been adversely affected. The agriculture sector, for example, has been hit hard by the low global demand for agricultural products, especially horticulture, tea and coffee, among others. Further, the reduction in availability of raw materials and intermediate goods following the closure of international borders has negatively affected the manufacturing sector. Taking into account the impact of these shocks on the domestic economy, growth is now projected at a lower rate of 2.5 per cent in 2020, down from the 5.4 percent growth recorded in 2019. Moving forward, so as to boost economic activities and foster higher growth rates, we shall not only implement a rapid economic stimulus programme, but also lay down a firm Post-Covid-19 Economic Recovery Strategy. These initiatives are ultimately expected to stimulate economic activities thereby culminating to a growth of 5.8 per cent in 2021 and 6.5 per cent by 2024. As mentioned earlier, our chosen fiscal consolidation plan has been adversely affected by the events over the last six months. In this respect, we are now targeting a fiscal deficit of 8.3 per cent of GDP in Financial Year 2019/2020 from the previous target of 6.3 per cent of GDP. In the Financial Year 2020/2021, the fiscal deficit is targeted at 7.5 per cent of GDP and is expected to improve to 6.1 percent of GDP in Financial Year 2021/2022. Hon. Speaker, having outlined the economic policy context for this Budget, the rest of my Statement will outline specific measures aimed at stimulating the economy so as to safeguard livelihoods, including jobs, businesses and facilitate faster industrial recovery. I will, thereafter, The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}