The Cabinet Secretary for the National Treasury, Mr Henry Rotich yesterday read the 2019/2020 budget statement. Among the proposals he laid out were the repeal of the Interest rate cap Law.

I have done an analysis of the budget statement by sectors below.

1⃣ The banking sector

  • A proposal to repeal the interest rate capping to be tabled with the aim of unlocking credit to SMEs and MSMEs.
  • The tax procedures act to be amended to allow the exemption of PIN requirement while opening bank accounts in certain circumstances
  • Proposed launch of an SME credit guarantee scheme to deepen access to credit by SMEs
  • The government intends to continuously recapitalize and restructure banks that are partially or wholly owned by the government to create stronger banks and development financial institutions.

What this means for Banks

Improved and flexible risk based loan appraisals that will increase loan uptake and profitability for banks. This coupled with the proposed SME guarantees will allow the banks to gain comfort in lending to the riskier SME and MSME segment.


  • The government intends to increase the sectors contribution to GDP to 15% by 2022. There will be special focus will be on encouraging investment in industrial sheds and parks.
  • Ksh.. 1.1B to be allocated for textile and leather industrial parks, Naivasha Industrial Park and Cotton Development Subsidy.
  • Ksh. 1.7B to be allocated to support SME growth in the sector.
  • Ksh.. 1.0B to be allocated to modernise Kenya Industrial Research and Development Institute (KIRDI).
  • 30% rebates on electricity expenses

What this means for the sector

Electricity rebates is a boost for the sector


The government has allocated the following funds to the agricultural sector:

  • Ksh 1.0 billion for crop diversification and to revitalise the Miraa industry;
  • Ksh 0.8 billion for the rehabilitation of Fish Landing Sites;
  • Ksh 0.7 billion for small-holder dairy commercialisation.
  • Ksh 7.9 billion for ongoing irrigation projects.
  • Ksh 2.0 billion for the National Value Chain Support Programme
  • Ksh 3.0 billion for setting up the Coffee Cherry

Additionally, there was;

  • Revolving Fund which is aimed at implementing prioritised reforms in the coffee sub-sector.
  • Ksh 0.7 billion to pay outstanding debts to sugar farmers for cane deliveries to public mills.

What this means for the sector

The continued support for this sector and the increased focus is likely to yield improved performance in the sector.


ICT sector output grew by an average of 10.8% between 2014 and 2018, mainly on account of continued investments in mobile telephony, increased uptake of e-commerce platforms and internet penetration. The mobile telephony segment has been the main driver of the ICT sector growth.

To support the ICT sector and take advantage of the digital dividend, the following allocations have been proposed:

  • Ksh. 3.2 billion for the Digital Literacy Programme;
  • Ksh. 2.9 billion for Government Shared Services;
  • Ksh. 2.8 billion for National Optic Fibre Backbone Phase II expansion; and Ksh. 1.1 billion for installation of an internet-based 4000 network;
  • Ksh.  7.2 billion for the on-going construction of Konza Technopolis Complex; and Ksh.. 5.1 billion to support the Konza Data Centre and Smart City Facilities Project.

What it means for the sector

Increased focus means great growth prospects in the sector.


The government has prioritised the achievement of Universal Health Coverage (UHC) as part of its Big Four Agenda.

The UHC pilot phase was launched in December 2018 in four counties; Kisumu, Isiolo, Machakos and Nyeri. Ksh 47.8B was allocated for interventions such as scaling up universal health coverage across the other counties

6⃣Affordable housing

Ksh. 74.2 billion for Affordable Housing programmes to cover construction of affordable housing units, National Housing Development Fund.