This came a few weeks after he announced a raft of tax and expenditure measures to cushion the economy from the impact of the Covid-19 pandemic, his first ESP as president.
ESP 1 that included tax cuts and increased Government expenditure with the support of monetary authorities that cut the Central Bank Rate (CBR) and Cash Reserve Ratios (CRR) was a step in the right direction as it was directed at increasing both consumer demand and investment spending.
Ironically, this is the third “Economic Stimulus Package” (ESP) announced by Mr Kenyatta, with the first and most effective traced back to his tenure as Finance Minister in Mwai Kibaki’s Government in his 2009/2010 budget speech.
Expenditure on infrastructure, education, health, agriculture, environment and water should not be part of a stimulus package but areas of continuous expenditure as they form the basic foundation of economic growth.
“Therefore, faced with the current economic challenges and bearing in mind that raising taxes is not a prudent option under the current circumstances, we as a government, chose to partly accommodate the temporary financing shortfalls with savings arising from rationalisation of government expenditures to remove waste and non-priority expenditure.
