By JAMES ANYANZWA

Kenya will increase spending on key economic sectors in the next financial year in a bid to jumpstart a lagging economy whose lacklustre performance has threatened the country’s dream of attaining middle-income status by 2030.

The economy has grown at an average of four per cent in eight years against a planned rate of 10 per cent partly due to poor performance of key economic sectors such as agriculture, manufacturing and tourism.

The government had initially projected that the economy would grow at a rate of about 6.1 per cent in 2013; 7.2 per cent in 2014; 8.7 per cent in 2015; 9.1 per cent in 2016 and 10.1 per cent in 2017.

This has left the nation’s ambitions of becoming a middle-income economy — with per capita income of between $1,045 and $12,736 —  in limbo as the government struggles to meet key growth targets under its long-term development plan, Vision 2030.

National Treasury Cabinet Secretary Henry Rotich, delivering the 2016/2017 budget speech, said the government’s focus is on reviving agriculture, industrial and service sectors through increased allocations and removal of taxes perceived as barriers to growth.

Mr Rotich allocated Ksh4.9 billion ($49 million) to subsidise fertiliser and seeds in order to improve yield and output for farmers and removed the Sugar Development Levy of four per cent and the one per cent ad valorem levy on tea.

The ex-factory price of sugar paid by wholesalers includes government levies such as four per cent Sugar Development Levy and 16 per cent value added tax.

Mr Rotich set aside Ksh2.4 billion ($24 million) for the Coffee Debt Waiver and Price Stabilisation Fund and allocated  Ksh8.4 billion ($84 million) for acquisition of offshore patrol vessels for the fisheries sub-sector, modernisation of the Kenya Meat Commission, revival of the pyrethrum sector, the livestock and crop insurance scheme and mechanisation of agriculture.

The Jubilee government also moved to boost the completion of some of its flagship projects ahead of the next General Election expected in August 2017.

These include the Konza Techno City, which aims to position the country as a sustainable worldclass ICT hub; the Kenya National Electronic Single Window System; digital migration; the Digital Literacy Programme (School Laptop Project) and the one-stop-shop Service centres (popularly known as Huduma Centres), which aim to enhance access to and delivery of government services to all citizens.