The theme for this year’s budget was “Deepening our Economic and Social Prosperity within a System of Devolved Government”.What other better way to deepen our economic and social prosperity than by deepening our infrastructural depth and initiating beneficial projects. Some of the notable achievements of prior budgets especially the budget for FY2011/2012 with respect to engineering and infrastructure include:
First, the tarmacking of over 2,700 kilometers of road. In addition, rehabilitating of more than 4,000 kilometers more. Second connecting to the electric grid 1.7 million Kenyans, up from 700,000 in 2002 Third, the scaling up of infrastructure investments as the building blocks needed to achieve a more lasting and stable growth like the strategic intervention in the area of infrastructure covering urban commuter railway upgrade and rural/feeder roads.
Lastly revamping of Agriculture, especially irrigation programmes and other food security programmes. Revived and expanded irrigation projects throughout the Arid and Semi-Arid Lands (ASAL) areas to secure food security.
To have a fair outlook of budget FY2012/2013 one has to fall back a bit and look at the prior years as most of the vital projects in the current budget are continuous in nature. Looking back at FY 2011/2012, it is easy to see that the investment in infrastructure, especially in road, energy and railway was stepped up. Effective and reliable infrastructure is essential in ensuring competitiveness of our products in the local, regional and international markets. For this reason, the Government stepped up improvement and expansion of the infrastructure network throughout the country, while ensuring maintenance of the existing ones.
Consequently, the overall budget for physical infrastructure was enhanced to Ksh.221.4 billion in FY 2011/12, up from Ksh.165.8 billion in FY 2010/11. Most of these resources were allocated towards road, energy and transport development. Road Construction was improved to Facilitate Trade and Commerce. A decent road network throughout the country is crucial for growth, investment, employment creation and poverty reduction. It facilitates trade and commerce and allows farmers to access markets for their products thereby promoting their welfare.
The budget targeted continued improvement of the general conditions of our highways, urban and rural roads and it initiated new critical road arteries, especially those that connect our country with the regional markets. To this end, an overall budget of Ksh.100.9 billion was allocated to the Ministry of Roads, up from Ksh.90.2 billion in the previous fiscal year. With this allocation, the Ministry of Roads and the relevant road agencies fast tracked implementation of the critical roads to allow Kenyans quick opportunity to use them.
Energy was also of paramount importance. As a development backbone, investing in energy to support the growing economy and reducing poverty was factored into the budget. Reliable and affordable energy is necessary for sustained economic growth and poverty reduction. In view of this, the Ministry of Energy was allocated about twofold increased budget amounting Ksh.65.7 billion, up from Ksh.34.9 billion in 2010/11 fiscal year. Of this amount, geothermal development was to receive Ksh.16.1 billion, which was to be used to drill and assess the viability of producing 140 MW.
Attention was also given to the Rural Electrification Programme, which is to benefit from Ksh.5.6 billion to facilitate supply of power from national grid to 460 trading centres and 110 secondary schools, among other public facilities country wide. The expansion of power access to rural areas is one of the initiatives to support rural enterprise development, create employment and improve the living conditions of our people.
Fast Tracking Construction of Kenya-Uganda Railway for faster and affordable Transport. A Bilateral Agreement was set with the Ugandan Government in 2008 to jointly fast track the development of a new Standard Gauge Railway (SGR) connecting Mombasa to Kampala with a branch line to Kisumu. The purpose of the project is to reduce the ever increasing cost of transport within the region, facilitate faster and cheaper movement of freight and passengers and enhance competitiveness, while saving on our newly rehabilitate road network.
Upgrading Urban Commuter Rail System for Affordable and Faster Urban Transport. With the recent upward surge in the international oil prices, the cost of transport has shot way out of reach of many urban workers leading to the initiation of a modernization project by the government of key commuter railway in order to accord Nairobians faster and affordable means of transport. Allocated to this venture was Ksh.1.9 billion in the 2011/12 budget toward construction of a new branch line from Embakasi Railway Station to Jomo Kenyatta International Airport (JKIA).
The completion of this line will make commuting to and from the airport faster, comfortable and cheaper. Also allocated was Ksh.1 billion to initiate upgrade of the Nairobi – Ruiru via Makadara, Dandora, Githurai and Kahawa railway line to expand passenger services by at least ten fold, thereby making it affordable to many Kenyans commuting daily to work in the city and reduce congestion in the City of Nairobi.
Water harvesting and storage for sustainable agricultural development for domestic, animal and irrigation is central to food security, livestock production and improved health of our people. For this reason and as a decisive step toward provision of adequate water for all Kenyans, Ksh.6.4 million was allocated under the Ministry of Agriculture for provision of water in each 170 constituencies. The implementation of this important measure was set to cost the exchequer Ksh.1.1 billion and provide water for domestic use and farming, thereby enhancing food security and moving our country toward achieving the Millennium Development Goals.
Building on the progress achieved under the Economic Stimulus Package (ESP) Irrigation program, a comprehensive countrywide irrigation expansion program was set with the intention to gradually cover the 1.7 million acres of potential irrigable land in order to transform our country into a food secured entity and net exporter of food.
First bold step in this journey was the allocation of an ambitious Ksh.10.2 billion. This comprising of Ksh.8.6 billion under the Ministry of Finance for direct transfer to the National Irrigation Board for various irrigation projects countrywide. Ksh1.2 billion to initiate a large irrigation project in Nyanza under the Ministry of Regional Development and another Ksh.400 million under the Ministry of Water and Irrigation to continue expanding smallholder irrigation projects throughout the country.
Currently Ksh. 53.3 billion has been set aside for agriculture services and Ksh.1.0 billion for Agribusiness Fund. On-going investments in dams and irrigation in the lower Eastern started to pay as evidenced by lack of hunger faces prior to what was the case in the past. The Budget FY2011/2012 was used to allocate funding for initiating two more irrigation projects at Usueni in Kitui and Iviani in Makueni at a cost of Ksh.300 million and Ksh.250 million, respectively. The completion of these projects will improve the lives of about 8,000 of our people in Ukambani.For budget, FY2012/2013 an additional Ksh. 8billion for expansion and construction of irrigation infrastructure countrywide has been set.
There is Continued Investment in Infrastructure to promote growth. Accelerated development of high quality public investments such as roads, energy, railways, port and water supplies is essential to sustain faster economic growth. It also opens up economic opportunities for households and hastens regional economic convergence and equity. For this, reason the Government continues to provide substantial resources toward infrastructure development. To this end, the budget FY2012/2013 set a total of Ksh 268.1 billion for various infrastructure projects, including roads, energy, rail, and ports.
This can be broken down as;
Roads – for the continued improvement of urban and rural roads. The overall budget for the Ministry of Roads is Ksh.123.6 billion, up from Ksh.104.3 billion in FY 2011/12, representing 18.5% increase from Ksh. 104.3 billion in FY 2011/12. This includes Ksh. 2.0 billion for the LAPSSET project
Energy – for reliable and affordable energy to sustain economic growth, the Ministry of Energy has been allocated Ksh.79.9 billion, up from Ksh.57.5 billion in 2011/12 representing an increase of 40% from Ksh. 57.5 billion in 2011/12.
Urban Commuter Rail System – to continue with the programme to modernize commuter railway, which started two years ago, Ksh.1.45 billion was allocated towards completion of the line linking the Airport to Central Railway Station. This first phase of the commuter rail upgrade will enable our international guests and city residents commuting through Mombasa road to access a faster, affordable, and more comfortable commuter rail services.
The transport sub-sector received 18.8 billion.
Despite huge resources dedicated toward infrastructure projects, their implementation continues to face challenges. To overcome these past legacies, the Government has pledged develop and institutionalize a framework for efficient and effective planning and management of public sector investment projects.
With the new Private-Public Partnerships legislation that will be shortly introduced before parliament, private sector participation in provision of infrastructure will increase, thus resulting in improved infrastructure coverage and reduction in cost of doing business.
Facilitating Private Sector for Growth and Employment
The private sector plays an important role in generating growth and creating employment for our economy. For this reason, there are proposed additional measures under the taxation process to support its expansion. The manufacturing sub-sector has been going through tough times due to various challenges especially unfair competition from cheap imports from the Far East. In this regard and in order to cushion the iron and steel manufacturers from this undesirable practice, there is a proposal by the Finance minister to increase import duty on galvanized wire from 0% to 10%.
The Telecommunication and the ICT sub-sectors have continued to play a critical role in the entire economy. In order to continue supporting these critical sub-sectors and further spur economic growth, the Finance minister proposed to remove duty on all imported software to make it cheaper to our people and further attract foreign investors in this industry.
Pro growth spending
The budget for 2012/13 will continue to accelerate public investments in infrastructure such as roads, energy, rail and ports to bridge our infrastructure deficit and make it easy to do business in Kenya. Ksh. 267.3 billion is allocated towards physical infrastructure development compared to Ksh.221.4 billion invested in 2011/12, representing 20.7 % growth.
The above are engineering based sectors that are relied upon to fast track the development of our country. The Vision 2030 is highly influential to all these developments thus special attention is needed on the infrastructure development of this nation so as to reach the vision. its only Since physical infrastructure takes the single largest chunk of our budget 24 %, we engineers have our job cut out for us.