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{
    "id": 420224,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/420224/?format=api",
    "text_counter": 215,
    "type": "speech",
    "speaker_name": "Hon. Musyimi",
    "speaker_title": "",
    "speaker": {
        "id": 95,
        "legal_name": "Mutava Musyimi",
        "slug": "mutava-musyimi"
    },
    "content": "The 2014 Medium-Term Budget Policy Statement has been prepared at a time when there is a slight upward trend in global economic outlook. Indeed, the IMF projects that the global economy will grow by 3.6 per cent compared to an estimated growth of 2.9 per cent in 2013. On the other hand, the Sub-saharan Africa is expected to grow by 5 per cent in 2014. Closer home, the East African economies are expected to grow at around 6 per cent. The Treasury focused that the Kenyan economy will grow by 5.2 per cent, 5.8, 6.4 and 6.8 per cent in 2013, 2014, 2015 and 2016 respectively. Hon. Temporary Deputy Speaker, the Committee notes with concern that the Treasury has often projected high economic growth at the start of the year, but the targets is often revised downwards in the course of the year. This impacts rather negatively on budget execution since Ministries, departments and agencies are forced to cut down on various programmes and projects. For Kenya to achieve higher growth rate, there is urgent need to increase investment in infrastructure projects. Going forward, a stable political and macroeconomic environment will be a pre-requisite to ensuring stability in interest rates that will eventually support credit access to the private sector and thereby promote private investment. Overall, it is important to point out that despite the pessimism in the forecast by the Treasury, the following risks remain: (i) Challenges in implementing the new system of Government: The transition to devolved governments has been plagued with a number of fiscal challenges in its implementation phase. The county governments came into existence in the middle of the budget cycle, resulting in poorly prepared and rushed budgets, most of which were not anchored on the fiscal development strategies, and which entailed huge deficits, raising questions of sustainability. Other pertinent issues which will need to be addressed include: (a) low absorption of funds occasioned by delays in county budget approvals; (b) large recurrent spending associated with inherited public workforce from the national Government as well as the defunct local authorities; (c) ensuring full adoption of IFMIS; (d) proliferation of county level taxes, fees and licences which are likely to increase the cost of doing business, thereby hampering economic activity; (e) slow pace in creating the necessary capacity especially in public finance matters."
}