Kanu dismisses State Budget
Kanu has dismissed the 2006/2007 Budget as pre-election posturing and that it will make Kenyans poorer.
Although some of the proposals were good, the inflation rate was bound to rise, said the party in a 10-page review of Finance minister Amos Kimunya's Budget proposals last Thursday.
Addressing journalists at the Kanu headquarters in Nairobi yesterday, the officials, led by Shadow Finance minister Billow Kerrow and chairman Uhuru Kenyatta said the inflation had increased from two per cent in 2002 to 13 per cent last year.
"It is our view that the Sh3.40 per litre fuel levy introduced by the minister is inconsistent with his pledge to reduce inflation to below five per cent. This levy will have a domino effect on key sectors and will effectively subdue economic growth.
"More significantly, it will drive more Kenyans to below the poverty line," said the party.
A two-kilogramme packet of maize flour is now selling at Sh60, up from Sh28 in 2002, a litre of paraffin (Sh50, up from Sh27), a kilo of sugar (Sh65, up from Sh28) and a litre of petrol which sold at Sh52 in 2002 is now going at Sh82.
"The Consumer Price Index for food, fuel and power items has increased by a massive 44 per cent in the past three years. A major component of ordinary Kenyans income is consumed by food, transport and housing, all of whose prices have skyrocketed," said the party.
It warned that more Kenyans would revert to using charcoal instead of kerosene "with severe consequences on our environment."
The party said the volatile exchange rate, the increasing overall inflation rate and rising level of unemployment were among major obstacles to economic growth.
The party criticised an increase in the number of ministries to 34 and of districts by 27, saying it was a show of wastage and extravagance in public service.
The party, through Mr Kenyatta, vowed to support taxation of allowances for MPs when the matter comes up for debate in Parliament.
Contrary to Mr Kimunya's assertion that donor funding has not been factored in the 2006/2007 Budget, Kanu said Sh73 billion was included.
"The minister has factored in Sh30.2 billion in loans and Sh28.4 billion in grants from external sources to finance development expenditure. Consequently, the variability of foreign funding is still with us," said Kanu.
Only budget support of about Sh5 billion had been excluded and it could be a move by the Government to avoid accountability demanded by donors, said the party.
Kanu further demanded tabling of the Defence ministry budget before the House Committee on Defence and submission of loan agreements to the House before signing.