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{
    "id": 1254140,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1254140/?format=api",
    "text_counter": 91,
    "type": "speech",
    "speaker_name": "Prof. Njuguna Ndung’u",
    "speaker_title": "The Cabinet Secretary, National Treasury and Economic Planning",
    "speaker": null,
    "content": "at once. In this regard, the budgeting process for the priority programmes under the Bottom- Up Economic Transformation Agenda will be managed through a value chain approach. This will ensure that resources are allocated to all the components along the value chain, thereby eliminating duplication of roles, removing any funding gaps, and enhancing efficient use of available budgetary resources. It is now my privilege and honour to present the economic and fiscal policies underpinning the Government’s Bottom-Up Economic Transformation Agenda for improved livelihoods of Kenyans. Thereafter, I will broadly outline the proposed resource allocations and revenue-raising measures that the Government will implement in the Financial Year 2023/2024 Budget. Before I proceed to elaborate on programmes, let me start by highlighting the economic context in which this Budget has been prepared. I will start with the economic policy context and I will focus on the global economy. The Financial Year 2023/2024 Budget has been prepared against a background of increased uncertainties in the global economic outlook, reflecting continuing geopolitical tensions, particularly, the ongoing conflict in Eastern Europe and the pace of monetary policy tightening amidst concerns about financial sector stability in advanced economies. As a result, global economic growth is projected to slow down to 2.8 per cent in 2023 from 3.4 per cent in 2022. Economic prospects are also expected to slow down across regions and countries. Nevertheless, commodity prices in global markets, particularly of oil and food, have been easing due to improved and functioning supply chains. Let me turn to the domestic economy. On the domestic scene, the economic growth for 2022 slowed down to 4.8 per cent from 7.6 per cent in 2021 due to the adverse impact of multiple shocks that affected the economy. Kenya’s growth in 2022 was supported by growth in the services sectors while the agricultural sector contracted for the second consecutive year due to the prolonged drought effects that also contributed to a slowdown in growth in the manufacturing sector, as well as that of wholesale and retail trade sectors. The economy is expected to rebound and expand by 5.5 per cent in 2023 up from 4.8 per cent in 2022, and maintain that pace over the medium-term. This growth will be supported by a broad-based private sector led growth, including continued strong performance of the services sector and recovery in the agriculture sector due to improved weather conditions during the March–May rainy season. This growth outlook will be reinforced by the interventions being implemented by the Government under the Bottom-Up Economic Transformation Agenda, including provision of 18 subsidised fertilisers and seeds to farmers during the planting season. Further, economic activity is expected to improve and drive aggregate demand expansion as international commodity prices ease, coupled with improved exports and resilient private sector consumption, as well as the ongoing public and private investment. The Government will continue to support economic recovery by pursuing prudent macroeconomic policies geared towards reducing debt vulnerabilities and supporting sustainable and inclusive development. The inflation rate has remained above the 7.5 per cent upper bound target since June 2022. This is mainly due to high food and energy prices following adverse weather conditions and high global oil prices, but also compounded by a pass-through effect from domestic currency depreciation. In order to anchor inflation expectations, the Central Bank of Kenya (CBK), through the Monetary Policy Committee, tightened the monetary policy during the last one year by raising the Central Bank Rate to 9.5 per cent in March 2023 from 7.5 per cent in May 2022. This monetary policy action together with improved agricultural production occasioned by the long rains and supported by the fertiliser subsidy programme and the ongoing importation of key food items, particularly maize, cooking oil, rice and sugar under the duty-free window are expected to ease the domestic prices of basic food items. 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."
}