Key agencies and departments under the Ministry of Trade and Industrialisation are staring at a major cash crunch in the coming financial year as budget estimates show that the docket will get only a third of its resource needs.
The ministry will get Sh11.769 billion in the Sh3.6 trillion budget by Treasury Cabinet Secretary Ukur Yatani for the 2021/22 fiscal year.
This is a sharp cut from Sh33.872 billion that the National Assembly Departmental Committee on Trade, Industry and Cooperatives says, in its report to the Budget and Appropriations Committee, the ministry requires to meet its needs.
The Department of Cooperatives has been allocated Sh1.594 billion, down from the Sh5.409 billion in needs.
Sh6.833 billion
Trade and Enterprise Developments department, the committee says, requires Sh11.802 billion, but has only been allocated Sh3.342 billion.
The Industrialisation department has been allocated Sh6.833 billion, less than half of the Sh16.661 billion needed to finance its operations.
The Committee says the sharp budget cuts will affect implementation of key projects such as marketing the country’s exports to fuel the economic recovery.
“During the Covid-19 pandemic, the value of Kenya Exports (including re-exports) hit a high of Sh532.9 billion in value which is an increase of 6.5 per cent within 10 months compared to similar period the previous year. However, there has been no initiatives to support exporters who are incredibly important to the economy,” the Committee said.
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In the budget estimates, New Kenya Cooperative Creameries (New KCC) is one of the entities facing steep cuts. It has been allocated just Sh50 million, which is Sh350 million less than a Sh400 million allocation in the current year.
Cotton farmers
Meanwhile, in what will come as a blow to cotton farmers in the Western region, the completion of the Luanda cotton ginnery has not been allocated any money, despite the Treasury setting aside money for the purchase of equipment at the same ginnery.
The modernisation of the Numerical Machining Complex Foundry plant, which was to be done with Sh800 million, has also only been allocated Sh70 million, while the development of the Athi River Textile Hub will be Sh2.087 billion short of its resource needs after being given just Sh95 million.
Small and Medium-sized Enterprises (SMEs) will also find it harder to access cheap credit after the budget for credit to SMEs through the Kenya Industrial Estates was cut by Sh595 million to just Sh604 million.
Meanwhile, the modernisation of the revived Rivatex Machinery in Eldoret which requires Sh521 million has been given Sh130 million.
