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"id": 293457,
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"content": "Mr. Speaker, Sir, I wish to sincerely thank hon. Members, especially the Parliamentary Budget Committee for the comprehensive review of the Estimates, recommendations thereof and very insightful debate that took place in this House. I want to assure hon. Members that we shall review and consider these recommendations as we finalize the Appropriations Bill. As I have already stated, the Government will facilitate the private sector as the key driver of growth and employment by, among other measures, safeguarding micro- economic stability, continuing with investment in infrastructure development, undertaking further financial sector reforms, enhancing investment in security, deepening structural reforms, including rationalization of the public service and expanding markets through regional integration. Mr. Speaker, Sir, let me now turn to micro-economic stability. As I indicated earlier, despite the challenges of the year 2011, our economy has stabilized and inflation has declined steadily since November 2011. This follows co-ordinated monetary and fiscal policies actions taken by the Central Bank of Kenya (CBK) and the Ministry of Finance to contain inflation and exchange rate pressures. The economy is now set on a sustained path of higher growth in the medium term. Going forward, we expect that the supply side driven pressures on prices and the exchange rate will subside in line with the gradual fall in the global oil prices and ample supply of food arising from the ongoing rains and expanded irrigation programmes. This should also reduce the demand pressure on imports and on our current account. Mr. Speaker, Sir, the CBK’s monetary policy will be geared towards bringing down inflation to single digit level within a few months time, and thereafter be kept stable at around 5 per cent over the medium term. In line with Section 4 of the CBK Act, I will shortly be writing to the CBK’s Monetary Policy Committee to pursue the proposed inflation target of 5 per cent with an up of about 7 per cent by the end of June 2013. Mr. Speaker, Sir, with the recent decline in interest rates, we do not expect further volatility to happen, but care will be taken to ensure credit support to productive economic activities remain available. We will also continue to maintain a flexible exchange rate system, with the CBK intervening only to smoothen out short-term erratic movements in the shilling exchange rate that do not reflect market fundamentals, and to achieve its international reserves target. Mr. Speaker, Sir, accelerated development of high quality public investments such as roads, energy, rails, ports and water supplies is essential to sustain faster economic growth, open up economic opportunities for households and hasten regional economic convergence and equity. Mr. Speaker, Sir, for this reason, the Government will continue to provide substantial resources towards infrastructure development. To this end, I have in this year’s Budget a total of Kshs268.1 billion for various infrastructural projects including roads, energy, railways and ports. For roads, we have continued to improve the general conditions of our highways, urban and rural areas. The overall Budget for the Ministry of Roads is Kshs123.6 billion up from Kshs104.3 billion in the previous year. For energy, for us to have reliable and affordable energy to sustain economic growth, the Ministry of Energy has been allocated Kshs79.9 billion up from Kshs57.5 billion in the previous year. For urban commuter railway system, we want to continue this programme so as to modernize commuter"
}