The National Treasury recently tabled the 2021/22 budget estimates alongside the Finance Bill 2021. The proposed Ksh3.6 trillion budget is a 25% increase from the Ksh2.91 trillion in 2020/21.
The budget allocates Ksh1.8 trillion to the Executive, Ksh70 billion to counties, and another Ksh37 billion and Ksh17 billion to the National Assembly and the Judiciary respectively. If approved, this will represent the biggest budget yet in the history of our republic. The budget also sets aside Ksh26.2 billion for the post Covid-19 recovery strategy economic stimulus programme.
This comes as the Kenya Revenue Authority (KRA) experiences revenue shortfalls year after year, further worsened by the pandemic. In previous years, the Kenyan government has not been able to finance its budgets, resorting to continued borrowing.
The expanded budget is surprising, considering that Kenyans are already overburdened and weary from tough economic times, occasioned by Covid-19. This, amidst concerns that the country might be unable to meet its debt obligations, considering the recent upgrade of its risk of debt distress from medium to high.
To finance the 2021/22 budget, the Finance Bill proposes various amendments aimed at widening the tax bracket. These include; amendments to the Digital Service Tax (DST), review of Value Added Tax (VAT) status for certain goods from exempt to taxable, with ordinary bread shifting from zero-rating to the standard 16% rate. These tax amendments demonstrate desperation on the side of the government to generate sufficient revenue to meet its obligations. Despite these efforts, the proposed budget still threatens to worsen the country’s debt burden.
Expanding DST’s scope to hurt online businesses
On the DST, proposed amendments aim at expanding its scope to include income accruing from businesses conducted over the internet or an electronic network, including/or through a digital marketplace. This tax rate is levied at 1.5% of the gross transaction value. Although Kenya’s digital economy is still in infancy, KRA projects collecting up to Ksh5 billion in revenue from DST in the first six months of the FY2020/ 2021.
In expanding the scope of DST, the government seeks to bring more businesses that generate income over the internet or through an electric network into the tax bracket. Since DST is being imposed on all digital services, irrespective of their gross transaction value, it could result in undesirable implications, especially for persons whose primary income is derived from provision of digital services and are under the Turnover Tax regime and minimum tax bracket. The government should consider setting a minimum threshold for applicability of DST with exemptions for businesses that register low margins. To facilitate smooth filing of DST returns, KRA should also update its online filing platform, iTax.
Reviewing VAT status to increase prices of basic commodities
VAT is imposed whenever a value is added on applicable goods and services across the supply chain, from production to consumption. The tax, which is levied on taxable products and services supplied or imported into Kenya, is collected by registered persons at designated points in the supply chain before submission to KRA. The registered persons charge VAT at every stage along the supply line, which the final consumer bears.
The VAT amendments are set to affect prices of basic commodities, including bread and baby-infant milk, whose prices are set to rise on imposition of 16% VAT, from current zero-rated status. Since bread is consumed in many households, this will make it less affordable to the common mwananchi, coming only months after a Ksh5 price hike, following a surge in global wheat prices. This has led to an outcry, with Kenyans terming the amendment as unfair and uncalled for, considering the economic downturn caused by the pandemic. The Bakers Association of Kenya has warned that introducing 16% VAT on bread violates the fundamental right to affordable food, besides risking closure of some companies, that could in turn see up to 100000 people jobless.
Similarly, removal of baby infant milk, otherwise known as formula milk, from the tax-exempt bracket will increase its price, thus affecting families dependent on it. Other commodities such as eggs, milk and meat are also set to cost more due to the proposed taxation of inputs for producing animal feeds. This will affect both farmers and consumers, as production costs will rise, translating into prices of these goods shooting up.
However, as much as the VAT amendments propose imposition of 16% tax on some items that were previously exempted, it also offers reprieve for some items by withdrawing the standard charge. The proposition to exclude the VAT levy on medical ventilators and inputs for manufacture of medical ventilators is laudable, since it encourages local innovations such as the one by students of Kenyatta University who designed and built a low-cost ventilator using locally sourced materials. With the exemption on materials for manufacturing ventilators, costs of procuring such inputs will drop. This is likely to encourage local production and reduce costs of ventilators and other related products, thus propping up management of Covid-19 in the country. Other items that have been excluded from VAT include: Insulin, Malaria test diagnostic kits, immunological products, Vitamin C and its derivatives, food supplements, protein concentrates, medical equipment and products, among others. The exemption will lower treatment costs for various ailments including diabetes, providing a relief to the health sector.
In this way, the VAT amendments signal a more considerate Treasury, especially towards the health sector. However, some discrepancies exist in the proposed policies. Some items which were exempted from the tax in the past are to be charged at a rate of 16%. For example, syringes, which complement immunological products, vaccines and treatment, will be VAT-able. The result is cancellation of the effect of exempting some of the goods. In essence, what one hand giveth the other taketh away.
With the ongoing pandemic, one would expect the government to limit its expenditures and channel more efforts and resources towards vaccinating the population as a means of jumpstarting the economy. But if the proposed budget is anything to go by, there remains little to be optimistic about. With the proposed tax amendments, the huge public debt, and runaway corruption, Kenyans should brace for tough economic times as much of the expenditure burdens shifts to their shoulders.
However, following these proposed amendments, Kenyans raised concern and were given the opportunity to submit their opinion physically at Parliament Buildings or via email to the clerk by 2nd June 2021. The President is expected to assent to the legislation by June 30th 2021, paving way for KRA to start implementing them from July 1st 2021.
By Eunice Wahito, Emmanuel Owuor and Janet Muchai
The writers are Graduate Interns at Africa Center for People, Institutions and Societies (Acepis).
Young people constitute the largest segment of Kenya’s population, with about 40% aged between 18 and 34 years. They represent a critical demographic in human capital, which whilst still sub-optimally tapped, portends opportunity for future economic development.
Conversely, this demographic also holds the potential risk of political and socio-economic disruptions if not adequately catered for, especially in reproductive health. Research has shown that sexual activity amongst the continent’s youth remains highest globally. It is estimated that up to 52% of females and 73% of males in sub-Saharan Africa have had some degree of sexual experience by the time they turn 19 years. Considering Kenya’s progress towards middle-income economy status, globalisation, and exposure to liberal ideologies, sexual activity among the youth is projected to increase in future.
Thus, there is merit in investing substantively in enhancing access to Sexual and Reproductive Health (SRH) information and services to young people. This is not necessarily to tame their sexual habits and police their morality, but to secure their demographic dividend, and assure productivity in future. Access to contraceptive services for young men and women, for instance, means they can properly plan and space their children, hence better ability to care for them and provide critical needs such as food, medication and education. It also means the youth will effectively take charge of their reproductive health and properly plan their future.
In fact, research has proven that there exists positive correlation between improved sexual reproductive health and key sustainable development goals on poverty eradication, universal access to basic education, improving maternal health, and promoting gender equity.
Although Kenya has made progress in increasing access to contraceptive services and commodities, a high unmet need for family planning (estimated at about 18% nationally) still exists, with significant disparities between youths and the rest of the population. This has been largely attributed to inadequate access to commodities and over-dependence on donor funding. Also, because majority of the Kenyan population rely on out-of-pocket mechanisms for their health needs, the question of affordability arises. This is further complicated by the government’s user fee policies limiting access by low-income segments of the population to contraceptive commodities.
The government has also failed to follow through on commitments to enhance delivery of sexual and reproductive health rights to youth. At the Family Planning Summit in London in 2017, it renewed commitment to increase access to contraceptive services to curb rapid population growth and drive development. Top on the list was: working with partners to increase uptake of modern contraceptive methods, expanding youth-friendly contraceptive services focusing on adolescent girls, and scaling up delivery of services for hardest-to-reach-groups.
Also, at the 2019 ICPD 25+ conference in Nairobi, Kenya joined other countries in committing to universal access to sexual and reproductive health and rights by working towards zero unmet need for family planning information and services, and universal availability of quality accessible, affordable and safe modern contraceptives.
The Government of Kenya committed to revise and implement a national family planning costed plan and ensure all 47 counties have budget lines for it by 2020. It also committed to increase domestic financing for family planning by doubling the earmarked $7 million budget in 2016/17 fiscal year. Further, it planned to ensure that family planning is fully implemented under NHIF by end of 2018 and to increase proportion of health facilities offering youth-friendly services from 10% to 30% by 2020.
Admittedly, budgetary allocation for family planning, contraceptives and general sexual reproductive health has significantly increased. The budget line for "Family planning services/ Reproductive Maternal Neo-natal Child & Adolescent Health-RMNCAH" has increased from 0.8% (Ksh 466 million) in 2016/17 to 3.9% (4.3 billion) in 2020/21. Also, county governments allocated Ksh 11.2 billion for Reproductive Health & Maternal Health (RMNCH). It is important to note that despite increased budget allocations, these resources still fall short of the commitment to fully implement the national family planning costed plan - FP-CIP (2017 – 2020), which requires an estimated Ksh 32 billion annually.
Unfortunately, the Covid-19 pandemic has further exacerbated these inadequacies. As in every other sector, the pandemic has impacted reproductive health outcomes in Kenya, especially for young people, ranging from limiting access to commodities and services to raising affordability and equity issues, among others.
For instance, pharmacies recorded significant drops in contraceptives sales, due to supply chain disruptions arising from the pandemic. In 2020, 52% of women and 32% of men were unable to access SRH services for fear of contracting Covid-19 at the health facilities. Community-based care outlets were shut down; disrupting access to SRH services for millions of women and girls, especially sex workers. In terms of resource availability, the pandemic shifted focus from reproductive health services in the country as priority was placed on its response.
Moving forward, health sector stakeholders need to critically examine implications of Covid-19 on access to family planning, contraceptives and overall SRH services for young people. Effort is needed to ensure that Covid-19 response mechanisms (both containment measures and resource allocation) do not limit or roll-back progress.
To adequately and more sustainably respond, the government can facilitate better health outcomes for young people in family planning and reproductive health by increasing financing (at national level and counties) and implementing incremental policy changes. Initiatives like scaling up the voucher system in providing RH services, including family planning, especially in rural and hard to reach areas can also increase access to, and uptake of, contraceptive services among youths.
Through actions by county and national governments, more youth empowerment centres can be established and equipped to provide a one-stop-shop for age-appropriate and youth friendly reproductive health information.
At policy level, the government must increase collaboration amongst multiple stakeholders to increase participation of public, private, and civil society organizations. More action is also necessary to tackle barriers to some contraceptive methods, especially in remote locations. Lastly, reforms are necessary at Kenya Medical Supply Agency to end stock-outs and improve efficiency in the supply chain for all medical commodities, including contraceptives.
However, public sector resources alone are unlikely to meet Kenya’s growing demand for modern contraception. Policymakers should consider how government resources could be targeted at those least able to tap the private sector, especially young people, most of whom pay for the services out-of-pocket. More partnerships with development partners are also needed to secure increased financing for FP commodities and services.
More importantly, budget tracking is necessary to promote transparency and provide evidence for advocacy. This should go hand-in-hand with capacity development and education on the budget making targeting process for personnel of organisations (like those doing social audits) that advocate for budgetary increases.
This article was first published on The Standard on Saturday 6th March 2021
The COVID-19 pandemic has not only changed life as we knew it, but also threatened to significantly reverse gains towards attaining gender equality and accordance of equal rights and opportunities to women and girls in Kenya.
Over the years, the Kenyan government has taken measures to advance gender equality. This has ranged from free maternity and immunization programs for children to providing free sanitary towels to over 4 million school-going girls. The Constitution of Kenya provides for equal gender representation in leadership positions, requiring at least no more than two-thirds of holders of elective public bodies be from one gender. Article 27(3) of the Constitution also provides for equal treatment of either gender, including access to social, economic, political and cultural opportunities.
In spite of all this, gender equality still remains a challenge in Kenya. Women have lesser access to basic education, economic participation and political representation, and face greater health and safety risk. According to the United Nations, women and girls currently earn and save less, while holding insecure jobs.
The pandemic has adversely impacted health of women and girls, due to shifting priorities and reallocation of resources for sexual and reproductive health services. Previous health crises such as Ebola have demonstrated that in such times, resources are normally diverted from routine health services, thus reducing already limited access to these services, as well as maternal, new-born and child health services. Consequently, some women in Kenya could not access contraceptives during the pandemic, leading to unwanted pregnancies. This has also been linked to the alarming number of adolescent pregnancies since the onset of the pandemic and school closures. Statistics indicate that in 2020, 152,000 teenage girls in Kenya got pregnant during this period.
Besides access to critical healthcare services, the pandemic has also increased the burden of unpaid care work, due to heightened needs of the vulnerable and sick. Globally, women perform more than three times unpaid care work than men, according to the International Labour Organisation. The care burden on women in Kenya significantly increased with the COVID-19 pandemic, particularly those bedridden at home. This reduced the time available for women to generate income from business or formal jobs.
As such, many women suffered job losses, negatively impacting their income levels. According to 2020 KNBS Economic Survey, the proportion of the population in active informal or formal employment dropped to 65.3% for men and 48.8% for women. This is in addition to significantly disrupting workflow, as a result of reduced working hours, occasioned by the curfews and social distancing measures.
The COVID-19 pandemic significantly reversed the last three decades’ gains in improving access to quality education for women and girls. Globally, governments shut down learning institutions, which had to shift online. While e-learning has been effective for some, it generally remained inaccessible for many, especially women and girls from poor and developing countries.
Aggravation of sexual and gender-based violence has translated to fewer women and girls being able to access learning materials during the pandemic. Pregnant school-going girls have been forced into early marriages, apparently as a safeguard against immorality, and to put them in a ‘family’ setup.
The pandemic has also heightened the risk of women and girls to sexual harassment and gender-based violence, as a result of movement restrictions and social isolation. Violence against women is the most pervasive breach of human rights. The UN Women estimates that up to 243 million women and girls globally aged between 15 and 49 years, experienced physical and/or sexual violence by their intimate partners during the year. These effects of gender-based violence and unwanted pregnancies are likely to outlive the pandemic.
President Uhuru Kenyatta recently raised concerns over the rise of gender-based violence in Kenya and directed the National Crime and Research Center to probe it. The 16 days of Activism against Gender Violence campaign by the WHO to call for prevention and elimination of violence against women and girls globally also emphasized ending GBV. These efforts and directives are expected to substantively impact and assure Kenyan women and girls protection from physical and sexual violence.
With COVID-19 having affected the socio-economic aspects of life, especially for women, its impact on inclusion and participation of women in civic processes will continue to be felt beyond the pandemic.
Policymakers need to adopt measures to limit scarring effects of the pandemic on women and girls. Recovery measures post COVID-19 should aim to build a more equal, inclusive and sustainable economy for both genders. Governments, NGOs and international actors need to collaborate and inculcate a gendered approach towards fighting the COVID-19 pandemic for an inclusive result, especially for women and girls.
The Covid-19 pandemic has brought significant challenges to public forums, especially those of a political or civic kind.
Given that public health considerations take precedence over social engagements, conventional forms of engagements have been crippled or rendered rudderless. Politicians, particularly, have been hit hard by the Covid-19 pandemic, necessitating a complete change in their public engagements. Except for isolated cases reeking of selfish defiance, restrictions to curb the spread of the virus have made it impossible to hold political gatherings, as was previously the norm. Consequently, some overly vocal figures on the political scene have gone unnoticeable for months.
Attempts to restructure some predominant physical engagements to adapt to reality of the pandemic have so far fallen short of expectation. Further, in countries like the United States, defiance and denial of the magnitude and seriousness of the pandemic has come with irreversible consequences, as evident from the high number of infections and deaths.
Notably, politicians and other public figures have recognised the power of digital platforms as an alternative means of engaging with the masses. In recent days, political activity on social networks has grown exponentially. Discussions on social networking sites have led to youth engaging more on political issues. According to UNICEF, youth today use digital platforms to establish their civic identities and declare political stances. Through these modes, youth can now voice concerns and table their agenda, unlike in the past where they remained marginalised.
Recent happenings globally prove that the digital world is equally, if not more, powerful. The world witnessed Black Lives Matter protests accelerate from the epicentre in Minnesota throughout the United States and across the vast Pacific and Atlantic oceans to Australia and the United Kingdom. This was one of the greatest testaments of the power of digital platforms.
Similar occurrences have also been witnessed in Sub-Saharan Africa. In Uganda, the rise of ‘People Power’ has been largely attributable to social media activism by Robert Kyagulanyi – Bobi Wine – who has stood firmly against oppression by the current regime. Not to forget embers of the Arab Spring that were blown into a raging inferno online.
From these, it is evident that the world’s interconnectedness, thanks to the digital revolution has made it easier for humans to form communities, uniting strangers around a common cause, ideal, or belief. In a world where even those who reside in remote places can access the internet, it only takes a post on Facebook, a hashtag, or a branded social media avatar to stir a revolution.
With the Covid-19 restrictions, there has been a meteoric rise in creation and sharing of digital content, to cater for grounded audiences. Zoom meetings and webinars have become the norm, especially for leaders striving to sustain their potency. However, there is a striking contrast in the nature of engagement on digital platforms compared to what is typical of political rallies and gatherings. Given discussions online are topical, leaders have to demonstrate ability to articulate their ideas clearly and defend their ideals in a manner that resonates with citizens if they are to be granted an audience. The mass hysteria characteristic of political rallies and other traditional forms of engagement that politicians often ride on, no longer exists. Citizens are also forced to be more critical of information shared by leaders.
Amplification of digital civic engagement is a premonition of things to come. While traditional, in-person forms of civic engagement cannot be completely eradicated, time is ripe to fully go digital and strengthen frameworks that facilitate the same. A critical element remains improving access to quality and reliable information which the nature and quality of online discussions are dependent on. Over the years, Kenya has made significant strides in enhancing access to public information, a right prescribed and guaranteed in the Constitution. However, existing frameworks remain weak, as critical information regarding public debt, tendering processes, procurement and budget remains difficult to access.
The desired success can only be attained through inter-ministerial synergies to ensure established frameworks are firm, functional and incorruptible. Success is also predicated in enhancing digital infrastructure, granting those in rural and marginalized areas a unique focus to ensure their voices and concerns are sufficiently represented.
It is also important to pay attention to deterring rampant sharing of fake news and disinformation through digital platforms. While online platforms provide avenues for reaching wide segments of the population, it also makes it easier to share fake news and misinform the public, thus shadowing and diluting quality of online engagements. To counter such, it is also important that efforts be channeled towards equipping citizens, particularly the youth, with media and information literacy skills to increase their capacity to create, consume, critique and disseminate online information. One such initiative is the recent Media and Information Literacy training by the Africa Center for People Institutions and Society supported by UNESCO.
Considering the increasing cases of cyber-bullying, it is also important to have candid conversations regarding how best to put together safeguards, in the form of law or policy. This will ensure digital safety for billions of users across the world, especially young people.
Digital civic engagement is gaining traction and will outlast the Covid-19 era. This ushers in a new era that promotes inclusion of youth and other groups that have traditionally been excluded and unheard in decision-making processes. It is an era where every member of the society has equal opportunity to establish their civic identities, elevating them to a better position to be diligent and active in performing their civic duties.
Overall, investment in strengthening digital civic engagement mechanism is in a worthwhile endeavor that must be encouraged if we are to foster responsible citizenry moving forward, post-Covid pandemic.
Crisis has a way of stripping people naked to reveal the size of their cojones. It trumps lies, pretense and all manner of mediocrity in people, especially leaders.
Recently, a sense of bewilderment gripped the world when the US President, on live television, suggested that injection of disinfectant be used to treat COVID-19. While he later, in his clinical fashion, changed the narrative claiming he was only being sarcastic, the harrowing reality of emptiness and lack of leadership where it is most expected was evident for everyone to see.
Unsurprisingly, many leaders across the world have been rather underwhelming in their handling of the COVID-19 pandemic. Just a handful of leaders in a few countries - like New Zealand, Germany, Denmark, Finland, Taiwan - have shown leadership worth emulating.
In Africa, countries like South Africa, Uganda and Rwanda have ramped up testing to quickly identify and isolate Corona virus cases and trace contacts. However, in other countries like Tanzania, basic measures such as providing social distancing guidelines are yet to be enforced.
Other countries have leaders who prefer looking like they are leading instead of actually leading. In Kenya, several politicians spent money on branding donated facemasks and hand sanitizers instead of investing in more sanitizers, personal protective equipment and financing the health system. Some section of religious leaders even moved to court to oppose government’s ban on church gatherings, completely oblivious of the risk that this could amplify the spread of the virus.
The Power of Truth
Leadership at this moment of crisis means being a champion for truth. This is evident from Angela Merkel who has been honest and open with her citizens on the status of the pandemic. It is by being truthful that the true extent of disease can be established and mitigation measures set up.
From the U.S to the U.K, China and across Africa, those charged with speaking truth to power have deliberately chosen to do the very opposite. Reports of leaders disregarding expert advice and silencing those who attempt to speak up against governments’ actions or inaction are scattered all over. Some have even gone as far as openly castigating the media for seeking answers when in real sense they are avoiding accountability.
It is during such times that leaders – especially those in government – should remember and be guided by the words of John F. Kennedy: “Without debate, without criticism, no administration and no country can succeed. That is why our press was protected…to inform, arouse, reflect, to state our dangers…to indicate our crises and our choices, to lead, mould, educate and sometimes even anger public opinion.”
Decisiveness in dealing with the pandemic
One of the hallmarks of great leadership is being able to make decisive and effective decisions when everyone is looking up to you. As early as January, Taiwan had established 124 measures against COVID-19 when the first hint of the virus was detected. In New Zealand, it did not take long for the Prime Minister to implement a countrywide lock down and enhance alertness. In Uganda, the county was swift to seal off all entry points, while ramping up testing. Whereas the viciousness of the virus was already evident, some countries have not been as effective in their response strategies.
Up to now, some countries, especially in Africa, are yet to set up guidelines for combating the disease. In others, like Kenya, where a dusk-to-dawn curfew is in place, it is difficult to judge effectiveness of the same, given the manner in which security officers are implementing government directives. Further, there have been reports and widespread concern regarding status of the quarantine facilities. If images shared are anything to go by, these quarantine centers that are to serve as containment centers for the virus are slowly morphing into incubation centers for the same.
Decisiveness in leadership in the era of COVID-19 also means being meticulous and strategic with containment measures. It calls for leadership to be innovative and cognizant of realities of the contexts within which they operate. No wonder, many African leaders have been criticized for ‘copying and pasting’ intervention measures applied in other countries without assessing their fitness to the unique situations in their countries.
A time for compassion and love
This is the time for leaders across the board to exercise love and compassion for the people they represent. This is the time for elected officials to show that they are pro-people and demonstrate that they are in touch with lives of the citizenry. This is the time for healthcare workers to be provided with the entire arsenal they need for this humongous fight.
Commendable efforts have been seen world over where individuals and corporations have stepped in to bridge gaps by providing crucial Personal Protective Equipment for frontline healthcare workers as well as food and sanitation products to the less fortunate. Some religious leaders, beyond their spiritual support, have stepped in to provide economic and psychological support to those who need it. We have seen individuals spending their time and resources to help sensitize communities in their local languages on importance of social distancing and maintaining high levels of hygiene. Such is the motif of pride and leadership to be emulated.
Early in the 20th century, it took 36 months for the world to manage the Spanish Flu. While we are faced with an almost similar pandemic, the world today – unlike in the 20th century – is better placed to fight this war. We are more advanced technologically and intellectually, putting us at a better position to understand the enemy and fight it effectively.
While we have the resources, proper leadership will catalyze effectiveness of the fight and push us close to victory. The world needs leaders who communicate effectively and not be “sarcastic”. It needs leaders to collaborate with everyone in the community, take decisive action and be intentional about finding solutions that will help us fight this war.
Leadership in the wake of the COVID-19 pandemic is not about being an authoritarian. It is about being bold enough to speak truth to power, making truth powerful and making power truthful. It is about setting aside selfish ambitions and marshaling resources– including knowledge, expertise, human resources, money and political capital to fight as one army.