The government is working hard to correct the anomalies of the previous regime and make life bearable for ordinary Kenyans, Prime Cabinet Secretary Musalia Mudavadi has said.
Mudavadi who spoke in Mombasa on Wednesday urged Kenyans to brace for hard economic times for at least two years as the government works on a recovery strategy.
He defended the Kenya Kwanza government against accusations it has made life even worse for its citizens, saying the new government found the economy already in a bad state and has been trying to resuscitate it.
“As government, we are not sleeping on the job. We are burning midnight oil to correct the drain of and strain on people’s livelihoods,” Mudavadi said.
He was addressing professional accountants.
Mudavadi said President William Ruto’s administration is deploying all the measures within its power to address the challenges Kenya faces today to foster a resilient and inclusive economic recovery that protects livelihoods.
“I am famously quoted as cautioning Kenyans to gird themselves for hard times for the now, and how resuscitation of the economy will take two years. I haven’t been misquoted. I am being pragmatic, realistic and forthright in my assessment of our dilapidated economic situation. There is no room to lie to Kenyans,” Mudavadi said.
The minister defended the Finance Bill 2023 which has proposed further taxes on Kenyans including the housing levy, saying it is Kenya Kwanza’s intervention instrument to alleviate people’s suffering.
He said most of those making the loudest noise against the bill are those who were benefiting for the lopsided policy that former President Uhuru Kenyatta’s regime had put in place with government subsidy on consumption.
He said the subsidy policy has shifted from consumption to production.
“For the government, the principle of majority beneficiary applies. Hence, through the Finance Bill, 2023, the Government proposes to provide exemptions under the VAT Act for fertilizers and inputs or raw materials locally purchased or imported by manufacturers of fertilizers. This shall lower the cost of fertilizer, which will in turn lower the cost of production for farmers,” Mudavadi said.
He said agricultural pest control products, raw materials for manufacture of fertilisers and transport of sugar cane to millers, have been exempted from VAT.
“This intervention aims to promote agriculture and enhance food security. We are therefore certain that the food-led inflation will be contained as the cost of basic commodities such as maize get lower,” he said.
Mudavadi insisted the housing levy is not a tax but a contribution towards better housing for the poor.
He said some opposition leaders like Raila Odinga have been making noise over the same yet they own luxurious houses.
“I agree with him that the contribution will not be of benefit to him personally because he’s living in a comfort bubble. I confirm that the contribution is a savings plan deduction with benefits accruing to the employee,” Mudavadi said.
Institute of Certified Public Accountants of Kenya chairman George Mokua said the country will only fulfill its undoubted potential if the public and private sectors make full use of the core skills of professional accountants.
“It is sad that Kenya’s public and private sectors are failing to take advantage of the core competencies of professional accountants. These include financial management, reporting and planning, effective use of resources, revenue generation, data analysis and high standards of corporate governance,” Mokua said.
He said politicians, like accountants, have to put the public interest first to live with values of integrity, transparency, and expertise.
