The Kenyan Government has been proactive in expressing its allegiance to the diverse global commitments such as the United Nation Sustainable Development Goals, and has declared food security its national priority in the Big Four Agenda. The Agricultural, Rural and Urban Development (ARUD) sector has been identified as one of the six sectors expected to deliver the 10% economic growth rate under the Vision 2030.
The government has put its best foot forward in formulating the Agricultural Sector Transformation and Growth Strategy (ASTGS), to enhance Kenya’s agricultural sector to be a force to reckon with in food production and food sufficiency in the African region.
Budget Allocations
Despite having robust Food Security plans and policy frameworks, food poverty has been a recurring predicament across different reigning governments for decades. The mere existence of brilliant feasible strategies, conducive policies and legal provisions are meaningless if corresponding ARUD sector programmes and sub-programmes are deprived of adequate budget allocation.
Consequently, continuous focus on ill-informed priority areas, and imprudent utilization of resources hamper timely implementation of priority plans and policy frameworks. The overall goal of the ARUD sector is to attain food and nutrition security; sustainable management and utilization of land and the blue economy.
The ARUD sector is a key player in the economic and social development of the country. According to the Budget Policy statement, 2020, the sector’s contribution to GDP experienced growth from 29.7%, equivalent to Ksh2.342 trillion in 2017, to 32.9%, equivalent to Ksh2.929 trillion in 2018.
However, the sector’s contribution to GDP declined to 25%, equivalent to Ksh 2.225 trillion in 2019. The decline is attributed to increased inflation rate from 4.7% in January 2019, to 5.8% in January 2020. This is due to the upward trend in both food and fuel inflation over the last quarter of 2019.
Additionally, the locust invasion, floods at the beginning of 2020, and COVID-19 pandemic further accelerated inflation. Therefore, the ARUD sector was bound to suffer an economic blow, if mitigation measures were not proactively put in place.
The National budget for the 2020/21 financial year was prepared at a time when Kenya’s economic performance, like other economies across the globe, is weakening amid rising trade tensions, tighter global financial conditions and higher policy uncertainty, mostly attributed to the COVID-19 pandemic.
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Global economic performance is anticipated to slow down with business opportunities across countries and regions being uncertain. Most affected is the ARUD sector, specifically agribusiness and food production sub-sectors for local access and export.
In the Kenyan context, global economic challenges compounded by the prevalence of the COVID-19 pandemic will significantly affect the fiscal performance of the ARUD sector FY 2019/20 and 2020/21, unless proactive measures are taken to safeguard the economy for FY 2021/22 and beyond.
It is anticipated that some of the consequences that will ensue include shortfalls in revenue collection and a rise in unexpected expenditure pressures to mitigate the impact of the pandemic on the economy, in a bid to safeguard the wellbeing of Kenyans.
Global Hunger Index
Enhancing food and nutrition security for all by 2030 was declared a priority area in the 2020/21 FY budget. It received Ksh 62.5 Billion, out of the overall national budget of Ksh2.8 trillion, a Kshs.14.2 Billion increment from the Budget Policy Statement projected ceiling of Ksh 48.3 Billion for the ARUD sector. This is as indicated in the Budget Review and Outlook Paper, 2019.
The global hunger index released in 2019 ranked Kenya 86th out of 117 countries in the world that fit the food insecure criteria. With a score of 25.2, greater than 50 being an extremely alarming score, the hunger levels in Kenya were deemed serious. This alludes to the above-mentioned expression of dissatisfaction by Kenyans on budgetary prioritization for the Agricultural sector.
In the quest to shield Kenyans from socio-economic impact of the pandemic, President Uhuru Kenyatta, in his presidential public address on 25th March, declared several tax relief measures. It was expected that tax amendments would entirely encompass those measures.
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Instead, it reflected a complete overhaul of the Kenyan tax system, which included the introduction of tax on agricultural inputs like fertilizers. This will result in the rise in food prices, and ultimately reduce the disposal income of Kenyans, who are already struggling to feed themselves as a result of the impact of the pandemic.
Regular reorganization of the government has brought about risks in potential duplication of activities, across departments, during budget implementation. For instance, the irrigation component of the ARUD sector was integrated into the Ministry of Water, Sanitation and Irrigation. However, some activities were still captured in the ARUD sector as scheduled for implementation, as per the Program Based Budget for FY 2020/2021.
The true wealth of a country is its people, therefore, the Government has obligations to its citizens, which are to protect, respect and fulfill. In the context of food security, this means that to uphold respect, the government ought to desist from implementing measures that will impose limitations on people’s ability to feed themselves. For instance, taxation on agricultural inputs such as fertilizers will result in an increase in food prices.
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