Thursday, June 14, 2007

Budget 2007

I had a look at this years budget themed Vision 2030 -- Working Together, on the Path to Prosperity.

Things that I noted:
  • Target economic growth rate of 6.5-7% for the next financial year (interesting)
  • Target targets revenue collection of about 21% of GDP (meaning higher KRA targets)
  • Major privations to look forward to:
    • Telkom Kenya to an strategic partner (no mention of an IPO)
    • Additional Shares of KenGen to be sold to the public (but at the 'right price')
    • Part of Safaricom shares to be offered to the public
    • Part of the Government and NSSF shares in NBK will be sold to the public
I was particularly interested in what allocations would be made for infrastructure development - especially the road & rail network in the country:

The budgetary allocation to roads has been increased from KShs.42.5 billion in 2006/07 to KShs.62.1 billion in 2007/08, an increase of 46%.

Hope this goes some way in easing the infrastructure problem, though I suspect it will not be enough.

Another area of interest for me was on Business Environment, entrepreneurship and the ICT industry in Kenya

1 Billion KES was allocated to the TEAMS project - which aims to have a fiber optic submarine cable landed at Mombasa by next year

Telkom Kenya is undergoing privatization - this is a sleeping giant that will take the market by storm once it is awake.

The Government aims to develop and support an efficient ICT infrastructure that provides easy access to international and national network; establish legislative and regulatory framework for ICT development; and promote and ensure quality ICT education to provide a pool of world class professionals to meet the needs of local and global markets.

No details here really..and this is aimed at Business Process Outsourcing. I hope the plan is to make it as open as possible, and more importantly that in terms of content, software and education, we as a country are not just dependent on foreign companies and countries for our IT system and service needs, but are actively innovating - creating new products and services for the African continent. We also need to keep in mind that with BPO jobs, India among many Asian countries churn out a huge number of technology graduates, a good number of whom are highly skilled. We will need to greatly address ICT education policies and how they are implemented.

Business Licenses:
  • Originally - 1,325
  • Eliminated - 110
  • Simplified - 8
  • Hopes to eliminate - 205
  • Simplify - 371

I hope that with the various e-government projects underway that I am aware of, the process of starting a business can be done electronically, within a day. (it's possible :) )

Also of note: EAC Partner States will treated as resident investors on the NSE: 5% withholding tax applies to them, as well as the reserve amount of shares for local investors of which it is proposed to increase this from 25% to 40%.

My hope is that implementations on Infrastructure and Business Licenses are actually implemented.

I was hoping for a large budgetary allocation for Security as this is a key pillar of economic development.

I am glad that in the budget, the Minister has clearly recognized that we need to move to a knowledge economy.

Get a copy of the budget speech from the Treasury website

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