Treasury fears the government could miss its projected economic growth rate of between seven and 10 per cent because of emerging challenges in the market.
Speaking yesterday during the launch of the 2016/17-2018/19 Medium Term Budget process, National Treasury Cabinet secretary Henry Rotich said the exercise has started against a backdrop of numerous challenges.
“The budget process has been launched against the backdrop of a weakening Kenyan shilling against other major currencies, high interest rates, unpredictable weather patterns, rising food prices and unemployment,” he said.
Rotich said underutilisation of budgetary resources by a number of ministries, departments and agencies has also remained a hurdle to the realisation of achieving the development agenda.
He urged accounting officers and other key players to address the constraints by deploying necessary and timely mitigation measures to ensure optimum resource utilisation, adding that if the challenges are not well-addressed, they will impact negatively on the economy.
“We must, therefore, be prepared to confront these challenges through targeted interventions in the proposed budget,” said the CS.
According to the Second Medium Term Plan of Vision 2030, achieving middle income status will only be possible if Kenya achieves economic growth rate of between seven and 10 per cent.
Rotich said the 2016/17 Budget will continue to build on the government’s transformative agenda that was outlined in the 2015 Budget Policy Statement and is anchored on economic stability. “Achieving these targets will require scaling up investments in both public and private sectors of the economy.
The broad economic policies and development agenda will remain under five pillars,” he said. “We are all aware that resources are finite, hence the need for prioritisation and tradeoffs within and across the sectors to cater for emerging priorities,” he said.