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{
    "id": 1438652,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1438652/?format=api",
    "text_counter": 140,
    "type": "speech",
    "speaker_name": "Prof. Njuguna Ndung’u",
    "speaker_title": "The Cabinet Secretary for the National Treasury and Economic Planning",
    "speaker": null,
    "content": "Today, I wish to assure Kenyans that we have listened to their concerns and we have spelled out measures to address them through this Budget. In this regard, the budget highlights and even the Government's plan is to strengthen the resilience of our economy to navigate global turbulence, accelerate economic transformation, and decisively address the overarching developmental challenges in line with BETA. It is in this context that we have chosen the theme of this year’s Budget as “Sustaining the Bottom-Up Economic Transformation Agenda, Fiscal Consolidation and Investing in Climate Change Mitigation and Adaptation for Improved Livelihoods.\" Hon. Speaker, it is now my privilege and honour to present the economic policy content of this Budget. Thereafter, I will broadly outline the policy priorities and structural reforms underpinning the BETA. The proposed resource allocation, as well as revenue raising measures that the Government will implement in the Financial Year 2024/2025, are going to be summarised. However, we have to remember that we have one major problem that has three dimensions: There is a demand for increased spending or expenditures by the Government, which means we have to finance this through taxes or debt. The second dimension of this problem is that there are limitations and constraints that are imposed on public debt accumulation and debt carrying capacity of the economy. Third, and more fundamental, there are limitations in terms of mobilising higher tax revenues. This is something we have to remember because it is critical from our side. In the economic policy context, the Financial Year 2024/2025 Budget has been developed against a backdrop of an improved global economic outlook. The world economy stood at 3.2 per cent growth in 2023 and is projected to continue at the same pace in 2024. On the domestic front, the Kenyan economy is now unwinding from layers of negative and persistent shocks. Some of which have been protracted and had structural and permanent effects on economic activities. Through focused interventions and structural reforms, the policies of the Kenya Kwanza Government have started to yield some positive results. Economic recovery is evident, with a GDP growth of 5.6 per cent in 2023, up from 4.9 per cent per cent in 2022. This is above the global and Sub-Saharan African region average. The domestic growth in 2023 was mainly supported by a rebound in agricultural activities, given the improved weather conditions and subsidised inputs to farmers. The resilience of the services sector remained strong in that same year. The overall inflation declined to its target level of 5 per cent in April 2024 from a peak of 9.6 per cent in October 2022. The decline was driven mostly by the easing of food and energy prices, a strong pass- through effect from exchange rate appreciation, and the impact of monetary policy actions. The tight monetary policy has been complemented by fiscal policy measures that are implemented to enhance food production through subsidy programs on fertiliser and seeds. In February this year, the Government took advantage of the improved international financial market conditions to refinance the buy-back of USD1.5 billion of the 2024 Eurobond. The Government, through this process, successfully removed the uncertainty of the settlement of the Eurobond. The Government also successfully issued an 8.5-year infrastructure bond that attracted significant foreign investors, making it the most successful domestic bond issuance in the country's history. Those two operations in February significantly improved the market perception together with a tight monetary policy stance and significant reforms in the interbank foreign exchange market. This brought stability to the foreign exchange market. As of 31st May 2024, the exchange rate was Ksh130.20 to the US dollar, from a high of Ksh163 earlier in January. This represents a significant appreciation of 18.7 per cent. The appreciation and stability of the exchange rate created confidence and triggered inflows of foreign direct investment, and attracted investors to the Nairobi Securities Exchange (NSE). In order to enhance monetary policy transmission, the Central Bank of Kenya (CBK) has adopted 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."
}