PwC Worried about CS Yatani’s Budget Allocation to the Agriculture Sector

Tea Farmers

The Agriculture sector is the backbone of Kenya’s economy, a key contributor to its GDP. While the sector has been on its feet, the year 2020, presented external shocks including desert locusts, floods and COVID-19 pandemic that are already having an impact on the production. In the 2020/21 financial year planning, the agricultural sector was allocated Ksh 52.8 billion compared to KES 59.1 billion in FY 2019/20, representing a decline of KES 6.3 billion (11%), which is only 1.89% of the total national government budget.

The allocation has been geared towards expanding smallholder irrigation schemes, supporting the large scale production of staples, increasing access to agricultural inputs, implementing programmes to support smallholder farmers and promoting the use of appropriate farming techniques. Finance Ministry has injected Ksh 7.9 Billion economic stimulus package to the sector, to enhance value creation and that will in turn support and sustain Kenya’s farming communities so that they can provide employment to thousands of workers.

However, according to PWC, a multinational audit firm, the agriculture allocation in the current year’s budget fell short of the expectation of a revamped allocation given agriculture’s contribution to Kenya’s economy and food security. Some of these key issues like limited access to capital within the agricultural sector were not addressed in CS Yatani’s budget.

“In our view, the FY 2020/21 budget’s measures and interventions for agriculture are not sufficient to inspire the kind of real change in the sector that would contribute substantially to economic growth, increased employment, more disposable income and higher demand,” read a review from PWC.

According to the firm, there is the need to increase productivity, lower farm input costs, access to markets, reduce post-harvest losses and value addition, increase use of technology/mechanisation and access to finance and extension services