Vulnerable groups to be starved of cash in budget cuts
Beneficiaries of the Inua Jamii programme wait to be served by KCB Bank staff at Meru Primary School in April 2020.
Older persons, orphans and persons with disabilities are staring at tough times under President William Ruto’s government, with budget cuts on programmes that support the groups lined up in his first term.
The government, according to budget projections for 2023/24 to 2025/26, plans to slash allocations to programmes supporting the vulnerable groups, which will get just a third of what they need.
This is even as scholars challenge the new administration to channel more resources to social safety nets as one of the best ways to reduce poverty, observing that existing programmes have made minimal impact over the past decade.
Presentations from the State Department for Labour and Social Protection show that between 2023 and 2026, the sector will suffer budget shortfalls running into hundreds of billions.
The state department said while it had indicated a budgetary requirement of Sh107 billion during the next financial year to properly run its programmes, National Treasury allocated it a mere Sh36.1 billion, just a third of what it needed.
Similar low allocations face the sector in the following years, with Treasury projections indicating that the state department will be allocated even lower amounts in the next two consecutive financial years.
In 2024/25, while the state department indicated it would require Sh109.5 billion, Treasury allocated it Sh35.2 billion. This means that during the financial year, it will suffer a Sh74.3 billion budget shortfall, getting just 32.1 per cent of its needs.
The story will be the same in 2025/26, President Ruto’s second last financial year during his first term, where Treasury projections show the state department will get less than 30 per cent of its budgetary requirements.
Over the three years, the department’s budgets are projected to be reduced by close to Sh2.4 billion, going by Treasury projections, even as its requirements are projected to increase by over Sh5 billion.
Fill the gap
“The sector, therefore, will have to source for funds outside the budgetary allocations,” Principal Secretary Joseph Motari said, noting that among options the department is looking at to fill the gap include donors and public-private partnerships (PPPs).
“We intend to use PPPs to get funds that we may not get from Treasury,” said PS Motari on Friday.
The social development and children services programme had asked for a Sh8.9 billion in 2023/24, but has so far been allocated Sh4.7 billion.
Read: Elderly to wait longer for Sh2,000 monthly cash as most unbanked
The government plans to starve the social safety nets – a key pillar on its poverty eradication efforts – even as different assessments on their efficacy over the past decade show that they have made little impact due to underfunding.
The Kenya Institute of Public Policy Research and Analysis (Kippra), for instance, said that currently, only one in three households living in extreme poverty and in need of government support through the programmes is covered.
Read: Boost for the elderly as State releases Sh1.67 billion
Kippra explained that this has reduced the impact of the existing social protection programmes in the country to a mere 2 per cent poverty reduction rate, yet other countries such as South Africa and Lesotho that have heavily invested in the programmes have managed to reduce poverty at rates of over 90 per cent.
“The coverage of Kenya’s social protection and labour programmes is very low at 34 per cent. This means in every three needy households, only one is covered,” an official from Kippra stated during the Social Protection, Culture and Recreation Sector public hearing session for the 2023/24 Budget.
Enhancement
Kippra said there is need for enhancement of existing social protection programmes, which it said are no longer creating desired impact in the society.
Among aspects that Kippra has faulted in the current programmes include low coverage and stagnated support, whose benefits may have been eroded with years of growing inflation and other economic challenges.
A report by Kippra last year showed that nearly two-thirds (63 per cent) of Kenyans lived in multidimensional poverty, a rise from the 53 per cent that Kenya National Bureau of Statistics reported in 2018.
Read: Sh9bn for transfer to senior citizens set aside
Social safety net programmes have been one of the government’s key poverty eradication interventions, but they have made little impact as many remain uncovered.
Beneficiaries under the elderly persons, orphans and persons with disability programme receive a Sh2,000 monthly stipend, which has always been delayed by up to seven months.
Under the previous administration, then Social Protection PS Nelson Marwa had proposed the creation of a fund for social protection and wean it off from reliance on exchequer support, grow the number of beneficiaries it supports and end the delays in releasing cash.
