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Press Release-Budget faces Enormous Challenges amidst Global Economic Crisis

Nairobi, 14th June 2012…..Kenya unveils its Financial Year 2012-13 Budgetary Allocation today, when the world is facing the severest economic crisis, affecting families and communities. The financial system is paralyzed. Therefore, restoring stability, confidence and inclusive growth is the priority.

The test is how to adopt and implement stronger, cleaner and fairer economic and financial policies in order to realize benefits and equality enshrined in the Bill of Rights of the Constitution of Kenya 2010.

Significant progress has been made in education, health care, and infrastructure development. However, accessibility and quality remains a major challenge to the majority. Benefits of the current economic policies being implemented are limited to a small segment of the population whereas low employment rates, widespread and income disparities remain enormous. Majority of the citizens are bearing the brunt of conservative economic policies with constrained chances of expanding opportunities for them.

Efforts to genuinely address poverty and inequality must be maintained and heightened including promoting equitable development across the country. This therefore calls for high degree of accountability, discipline and ethics in resource allocation and utilization coupled with tighter and coherent financial and budgetary policies that would effectively tackle regulatory and policy failures comprehensively.

 The country needs to initiate and sustain conditions for inclusive economic growth driven by innovation, trade and investment with priority on financing and developing capacities of small and medium businesses and manufacturers.

 Further, the government has the responsibility of sharing the benefits of prosperity and opportunity and guaranteeing fair social progression of the majority. This must include productivity enhancing reforms to support growth beyond the short term.

Going forward, the current fragile external environment poses considerable uncertainty. Thus, the time ahead will require a delicate balancing act on the implementation of macroeconomic policies. The budget should be centered on further expenditure restraint, while expanding domestic tax base, promoting savings and investments and improving the quality of spending to ensure value for money. The government must introduce stringent measures to cut wasteful expenditure as the current government’s spending is high by international standards, thus warranting a thorough assessment of pockets of unproductive spending and ways to increase efficiencies.

Notably, there have been numerous issues in the past, touching on misuse of funds and corresponding income within the government. The government still owes Kenyans a comprehensive forensic audit of the past budget reports in order for them to demonstrate due diligence of the use of public funds.

Signed By:

Ndung’u Wainaina,

Executive Director, ICPC

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