Budget is faulted over land and law reforms

Published on June 18, 2008, 12:00 am

Members poked holes into the Government’s Sh760 billion Budget as they began debate on the annual estimates.

Being the first Budget for the Coalition Government, Chris Okemo (Nambale, ODM) said it failed to cater for the aspects of the National Accord, signed by President Kibaki and Prime Minister Raila Odinga in February.

"The Budget fails to address land and constitutional reforms. There is no explicit mention of the important aspects that are in the National Accord," said Okemo.

He also expressed fear over possible escalation of public debt owing to the enormous Budget.

The MP faulted Finance Minister Amos Kimunya for going against the grain in allocation of the development expenditure.

Against last year’s 30 per cent allocation for the same, this year provides 26 per cent for development expenditure.

This, Okemo said, was retrogressive, arguing growth can only be achieved if development expenditure rose yearly.

Said Okemo: "Development expenditure must rise for growth to be realised."

The former Finance minister also wanted Kimunya to give an account of the planned privatisation of the National Bank of Kenya.

He argued that despite last year’s Sh500 million allocation for the bank’s restructuring, no provision for the collection of funds from the proposed privatisation was made in the estimates.

Moses Lessonet (Eldama Ravine, ODM) criticised Kimunya for playing lip service to devolved funds yet they were critical in poverty alleviation.

He took issue with the Constituency Development Fund (CDF), which he said remained constant at Sh10 billion yet Government revenue had increased.

"The law requires that 2.5 per cent of Government expenditure be allocated to CDF.

With about Sh467 billion Government revenue, I expected about Sh11.6 per cent for CDF," said Lessonet.

Tourism minister Najib Balala disapproved of the reduction of tax on wheat from 25 to 10 per cent, arguing it should have been abolished to enable Kenyans benefit from tax deductions.

He lauded Kimunya for allocating funds for the development of Nairobi metropolis, but called for a similar move for Mombasa if it was to cope with the planned capacity enhancement of the Mombasa Port.

Agriculture minister William Ruto told Parliament that the purported privatisation of the Kenya Seed Company was null and void.

Answering a question by Dr Eseli Simiyu (Kimilili, Ford-K), Ruto said the ministry had declared the company’s shares’ sale illegal and directed it to refund money to those who had bought them.

This, he said, would ensure that ownership of the company technically reverted to the public.

The minister said the privatisation Kenya Seed was done without Government approval. He said it was approved after the board of directors agreed to float four million shares by private placement.

Ruto said privatisation was based on the wrong premise that it was exempted from the State Corporations Act.

He said former President Moi was misled to sign a raw gazette notice exempting the company from the law.

The minister said share allottees were identified long before the allocation against the practice of floating shares before transaction.

Simiyu had asked the minister to clarify whether the money had been refunded to the shareholders.

He claimed some businessmen in Mombasa were lobbying to oust the CEO of the Kenya Ports Authority to replace him with one who would cater for their interests.

This, he said, was going on because the Government had failed to take care of the private sector’s interest in the management of the port.

In a move that is likely to stir controversy, the minister proposed that Genetically Modified Foods be imported to cushion the country against food insecurity.

A company allegedly associated with businessman, Mr Nathaniel arap Tum, bought Kenya Seed’s majority stake.

Saboti MP Eugene Wamalwa (PNU) asked the minister to confirm whether there are cases pending over the seed company.

In response, Ruto said there were five cases, but added that Tum had approached the Office of the President for an out of court settlement.

However, the minister said the Government insisted that this could only be possible if it (Government) maintained a majority stake in the company and the illegally bought shares were revoked.

Ruto said the matter was critical because the company controlled 75 per cent of all seeds in the country.

He said Kenya Seed was serving Kenyans and the Government would not want it run by private companies and individuals.

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Is Kenya Seed Company Being Sold Illegally?

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