Revealed: Key areas in13.4trn/- budget 2012/13

Mr Mkulo
The government’s focus in the next financial year will be on improving power generation and distribution, infrastructure development and water supply as the government tries to beat inflation, which has rocked the country most of this fiscal year.

Finance minister Mustafa Mkulo told the Parliamentary Committee on Finance and Economy on Monday that the focus on infrastructure will boost domestic industrial production, which will be significant in curbing price rises and reducing the cost of living.

In his speech to the legislators, which The Citizen obtained yesterday, Mr Mkulo erroneously said the 2012/13 budget of Sh13.4 trillion will be a significant increase from the Sh12.7 trillion budget of 2011/12. 

The budget speech he tabled in Parliament last June and the Appropriation Act 2011 show, however, that the total budget resources for that year amounted to Sh13.5 trillion.

Ministry of Finance officials were not available for clarification. The focus on infrastructure in the 2011/12 budget is a long-term and sustainable way to fight inflation, according to analysts.

Since inflation reached double digits at the beginning of this fiscal year, the government has applied monetary tools, most notably reducing the circulation of money in the economy. But economists have cautioned that the move should be temporary. The long term strategy is to boost production.

Inflation currently stands at 19.4 per cent, a slight drop from 19.8 per cent in December, which was the highest in the past five years.
Source: The Citizen,, reported by Alawi Masare
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