Uhuru’s team makes last attempt at job creation in final budget

Additionally, he has proposed to exempt locally manufactured passenger motor vehicles from VAT, which he says is a move to encourage more investment.

Yatani’s move answers part of manufacturers’ prayer who had hoped for the lowering of the cost of industrial inputs by reducing the rate of Import IDF and RDL levy to 1.5 per cent, respectively, for industrial machinery and spare parts.

According to the Kenya Association of Manufacturers, the levies increase the cost of imported spare parts and industrial machinery and other capital inputs, thus increasing the cost of investments and manufacturing in the country.

“When spare parts and industrial machinery are imported into the EAC, IDF is waived for all manufacturers in the region except Kenya. This puts manufacturers in Kenya at a cost disadvantage,” KAM chief executive Phyllis Wakiaga noted.

Reduced investment and production costs such as electricity and taxes are expected to help reduce the cost of goods, easing the strain currently experienced by households.

Yatani’s Sh3.31 trillion budget, which heavily weighs on the Big 4 agenda—Manufacturing, Universal Healthcare, Food Security and Universal Health Coverage—also has significant allocations in key industries meant to create jobs, something the Jubilee administration has struggled with in the past nine years despite making big promises.

President Kenyatta had promised to create at least 1.3 million jobs annually, something that was never achieved.

One of the best performances was in 2019 when at least 843,900 new jobs were created, according to the Economic Survey 2020.

The Covid-19 pandemic wiped out these gains as more than 740,000 jobs were lost, according to the Economic Survey 2021.

According to Treasury, the number of employed people fell to 17.4 million from 18.1 million at the end of 2020.

Wage employment in the private sector declined by 10 per cent from 2,063,000 jobs in 2019 to stand at 1,856,000 jobs.

To promote industrial activities and create jobs in special economic zones, Yatani has proposed Sh2.6 billion for Dongo Kundu SEZ and Sh295 million for the development of the SEZ textile park in Naivasha, Kinanie Leather Industrial Park and Athi River textile hub.

Sh50 million will go to the Freeport and Industrial Park SEZ in Mombasa.

Other proposed allocations include Sh410.4 million for the modernisation of Rivatex and Sh3 billion for supporting access to finance and enterprise recovery.

Yatani has also proposed an allocation of Sh212.1 million for modernisation of cooperative cotton ginneries and a further Sh250.4 million for the cotton industry revitalisation.

The 2022-23 government spending plan includes Sh2.2 trillion in recurrent expenditure and Sh715.5 billion in development expenditures.

The total expenditure is however projected to range between Sh3.62 trillion (on the higher end) and Sh2.97 trillion at 95 per cent confidence interval, Treasury notes.

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