Kenya Budget 2015/2016 Highlights

The transport sector has been allocated a substantial amount in the new financial year. The amount that has been channeled to the
transport sector will see the standard gauge railway project get a total of KShs 143.8 billion. The allocation to the standard gauge railway project is way above what the education sector alone is going to get.

In most sectors, unlike in the transport sector, you will realize that based on the Kenya budget 2015/2016 highlights, the donor component in the budget is very significant.

Read more: 2016/17 Highlights
 

 The counties will receive KSHs. 287 billion. Read more about allocation to counties.

Power and Energy Sector
The power and energy sector will receive KShs. 55.2 billion. The development of Hydro-Electric power will not receive any allocation as Kenya shifts its focus to the geothermal power which has a limited lifespan of about 25 years. The residents in rural areas will continue to see increased connectivity to the national grid because KShs. 14.9 billion has been allocated to the rural electrification.

Transport Sector
The transport sector has a very large donor component. In the construction of roads for example, the Government will borrow KShs. 42.3 billion from lenders. The government will fund the remaining amount of KShs. 58.5 billion. This brings the total allocation for roads construction/ maintenance to KShs. 132.4 billion.

There are several levies that are charged on road users. One such levy is the railway development levy fund which was introduced by the Jubilee Government in 2013. The railway levy fund will contribute KSHs. 25.7 billion towards the standard gauge railway construction.

Education Sector
Perhaps this is the most important sector given the following factors;

Of the above factors, the very key is the employment of more teachers. So let us look at how the allocation can directly impact on the quality of education.

 TSC has been allocated KShs. 181.1 billion. The laptop project will receive KShs. 17.58 billion while the employment of 5000 teachers has received an allocation of KShs. 2.3 billion. Therefore, the laptop project has been given 8 times more funds than the recruitment of more teachers.

           Allocation to education in 2015/2016 budget.


The allocation for the free day secondary school is higher than that of the free primary schools in spite of the fact that the secondary schools are few and the number of students is way below the number of pupils. The free day secondary school will receive KShs. 32.7 billion while the free primary school will receive KShs. 14.1 billion. Therefore, the allocation for free day secondary school is two times more than that of the free primary school.
The schools feeding programme will receive KShs. 1 billion. The Government has allocated KShs. 600,000,000 for upgrading of all national schools. KShs. 400 million has been set aside for provision of sanitary towels in schools.

Allocation to armed forces
The Kenya police service has been allocated KShs.44.3 billion while the administration police have been allocated KShs. 25.1 billion. The Kenya prisons services has been allocated KShs. 16.2 billion.

The Treasury has allocated KShs. 75 Billion to KDF as a grant. The KDF has also received KShs. 15 billion  for modernization.

Civil Service
The civil servants pension scheme has been given KShs. 6 billion. In order to boost efficiency on payment of salaries, IFMIS installation has been given KShs. 2 billion.

The National Environmental Agency (NEMA) has been given KShs. 1.4 billion. The judiciary has been allocated KShs. 3.1 billion for construction of new courts.

The taxman, KRA, has been given KShs. 16.4 billion to finance it revenue collection operations.

Other Key allocations
The Constituency Development Fund (CDF) has been given KShs. 35 billion. The Government through this allocation has demonstrated its commitment to ensure that CDF is restored.

In order to boost small enterprises, the KShs. 5.3 billion has been set aside for provision of funds to the enterprises.

Street lighting will receive KSHs. 4.5 billion.
In order to boost the fishing sector, the fisheries has been allocated KShs. 3.1 billion.

The sports sector has recived KShs. 1.8 billion to go towards funding relevant activities in stadiums in Mombasa and Eldoret.

The expansion of Kilindini harbor in Mombasa has been funded with KShs. 0.8 billion based on the badget policy statement.

KShs. 9 billion has been set aside for orphans and vulnerable children.

The last mile connectivity that has enabled more Kenyans to be connected to electricity and communication infrastructure will receive KShs. 1.5 billion.

The Kenya Revenue Authority will raise KShs. 1.35 trillion towards the budget. The balance of 0.75 trillion will be sourced from lenders and donors. This follows the raising of the National debt ceiling to KSHs. 567 billion.

 Key Changes in Taxation
As is the norm, the budget reading introduced some new taxes and abolished other taxes. One of the key tax/levy that was abolished is the Capital Gains Tax. This is the tax that stock investors used to pay when they sold their tax at a profit-making price. Capital Gains are the returns that stock brokers make due to fluctuation of shares' prices. This establishment will truly favor stock investors who are inclined more on making substantial returns on capital gains than on dividends.

Landlords will be charged a 12% tax on their gross rental incomes while sugar importers will pay KShs. 25 for every kilo of sugar imported into Kenya.

 Top 3 Sectors
Th energy, infrastructure and ICT sector received the highest allocation. The education sector came in second. The public administration and international relations came in third place.

 Read more about allocation to counties.