The Economic Stimulus Programme in Kenya
The Economic Stimulus programme (ESP) was introduced through the 2009/10 budget entitled ‘Overcoming Today’s Challenges for a Better Kenya Tomorrow’. The ESP is a government programme coordinated by the Ministry of Finance, with Kshs. 22 billion being committed to the programme.
During a period of national economic crisis, an economic stimulus package may be passed through the government to help the country. An economic stimulus package is a set of tax rebates and special business tax incentives meant to motivate a slow economy.
The rationale behind an economic stimulus package is that by giving people money to spend, a financial crisis may be diverted. People will spend the money on purchases made in the country. This spent money will move through the system by increasing the demand on manufactured items. The factories will hire more people, or raise the pay of their current employees. As people begin making more money, they will be able to buy more. This cycle will continue until the economy pulls itself out of the slump, saving the country from a financial crisis. In emerging economies fiscal policies target three major new areas of public expenditure in the areas of transport and water infrastructure; credit subsidies, especially for small businesses and rural smallholders; and improvements in marketing support, again, especially for small businesses and rural smallholders. I
n an attempt at significantly improving employment opportunities and reducing poverty in developing economies, countries especially Kenya cannot help but focus on the role of the rural population and the agricultural sector. Agriculture is of course a foundation of the Kenyan economy. This is in sharp contrast to the long-term stagnation and decline in agri-cultural productivity since the early 1980s. Most of Kenya’s rural population has little in terms of resources or education. These are the farmers who need to become small commercial producers in order for poverty to drop significantly in the short- to medium-term in the rural areas. In order to service these farmers better it is important for policymakers to recognize their capabilities and needs.
The key point here is that most smallholders have had very limited formal schooling. The lack of formal education puts smallholders at a distinct disadvantage in comparison to other participants in agricultural markets. It is estimated that returns to primary education for rural agricultural households are between 8 to 12 percent per year. Assuring access to education for poor households would thus raise their agricultural productivity tremendously.
The Economic Stimulus Programme identified numerous projects per constituency which are funded with over Kshs.100 million in every constituency. The aim of the programme is to support local development projects in every constituency. The construction of these projects has created employment and the finished projects have provided essential services, job and business opportunities and enough food at the constituency level. The ESP supports projects in the education, health and sanitation, food production, environment, local government, industrialization and fisheries sectors.
Economic Stimulus Program in Education Sector
The focus of the education sector programs is to improve the quality of education for all Kenyans. The Education sector program will be implemented through the Ministry of Education framework. The ESP funds may be used for the construction of new school buildings or upgrading of existing facilities. Funds are disbursed from the Ministry of Education to target schools, which shall open a dedicated account for the ESP activities. Selection of projects is made by the Constituency Development Fund (CDF) Committee. Selection criteria for school projects include; Proof of ownership as public land (title deed/allotment letter), Strong community support, and High demand for schooling, Reliable water and electricity source. Primary schools Projects are managed by a School Management Committee which is responsible for making payments once the work is done. The committee should prepare a School Infrastructure Development Plan (SIDP) in conjunction with the community, and make community level procurement. Secondary School Projects are implemented by the Board of Governors (BOG) which should make community level procurement. (Institute for Social Accountability, 2010)
Monitoring of projects is done by the District Infrastructure Coordination Teams(DICT) comprising departmental heads including Public Works Officer, Public Health Officer, National Environment Management Authority, School Auditor, Education Officer, District Accountant,
Quality Assurance and Standards Officer. This committee also provides the completion certificates upon project completion Education can be perceived as an investment in human skills. Investment in education fosters economic growth, enhances productivity, contributes to national and social development, and reduces social inequality. Findings show that as the education level of a population increases, so do its chances of living a healthy, positive life. Health and Sanitation
The District Health Implementation Team (DHIT) under the leadership of District Medical Officer of Health is tasked to identify dispensaries, supervise works, ascertain delivery of equipment, recruitment and deployment of nurse and identify community health workers. Improved health standards of any nation are a prerequisite for economic growth and development.
Economic Stimulus Program in Market Stalls
This has been one of the major flagship projects aimed at creating and improving entrepreneurship capabilities of the citizenry. It is focused at addressing the missing markets and facilitating commerce, trade and rural enterprise development. The Ministry of Local Government in consultation with representatives of host local authorities have spear headed the implementation of the projects. The resident engineer and the project architect are also included in the implementation. The economic stimulus programme also drew up the architectural and technical designs for the markets.
Economic Stimulus Program in Food Production
The main focus of this programme is to reduce reliance on rain-fed agriculture, through and enhancing Kenya’s food production through rehabilitation and expansion of irrigable land at a cost of KShs. 2 billion in total.(ESP Handbook,2009).The Ministry of Agriculture has taken a lead role in implementing this component. Implemented by: the Ministries of Agriculture, Water & Irrigation, Regional Development and Youth Affairs.
Economic Stimulus Program in Jua Kali Sheds
This project aims at facilitating the youth to participate as artisans and entrepreneurs in the proposed massive social infrastructure projects and construction works at the constituency level. It is estimated to cost KShs. 2.5 million per constituency for the construction of ‘Jua-kali’ sheds and another KShs. 1 million per constituency to equip these sheds with appropriate tools and equipment. The Ministry of Industrialization has taken the lead in the implementation of this project. (ESP Handbook, 2009).
Economic Stimulus Program in Fisheries Development
This project is intended to improve nutrition and create over 120,000 employment and income opportunities. It is perceived to be one of the core entrepreneur activities embraced by many citizens under the ESP.(ESP Handbook,2009).To achieve this, 200 fish ponds will be constructed in each of the selected constituencies at an estimated cost of KShs. 8 million per constituency. The Ministry of Fisheries Development has taken a lead in implementing this project.
Economic Stimulus Program in Information and Communication
This project is intended to expand ICT access to Kenyans initially targeting provision through secondary schools and subsequently expanding to primary schools. The project will maximize on the benefits gained through the undersea cable that connects the economy to the global digital grid. This will be achieved by the purchase of 1 mobile Computer Laboratory for each constituency at a total cost of KShs. 6 million per constituency. (ESP Handbook, 2009).
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