Economic-Review-of-Agriculture_2015-6

8.0 TRENDS IN BUDGET ALLOCATION TO MINISTRY
8.1 Contribution of Agriculture to the Economy
The Agriculture Sector contributes directly to the national economy through income generation, employment and
wealth creation, foreign exchange earnings as well as ensuring food security. On average, the sector contributes about
26 percent to the GDP and accounts for 60 percent of total export earnings. It accounts for 65 percent of Kenya’s total
exports and 18 percent and 60 percent of the formal and total employment respectively. It further contributes about
75 percent of industrial raw materials.
8.2 Allocation and Expenditure Analysis for 2012/13 – 2014/15
The total allocation to agriculture increased from Kshs.32.5 billion in 2012/13 to Kshs 45.8 billion in 2013/14 and
decreased to Kshs 36.9 billion in 2014/15 (Table 8.1). The increase in 2013/14 was attributed to a new programme
on irrigation and drainage infrastructure that was allocated Kshs 12 billion while the decrease in 2014/15 was as a
result of devolved functions and a total of 12,590 staff to County Governments. Total absorption rate declined from
84.7 percent in 2012/13 to 82.5 percent in 2013/14. This was occasioned by challenges in procurement and donor
conditionalities, among others.
Table 8.1: Allocation and Expenditure Analysis
Vote Approved Estimates (Million KShs) Actual Expenditure(Million KShs)
2011/12 2012/13 2013/14 2014/15* 2011/12 2012/13 2013/14
Recurrent 13,490 14,404 12,590 10,714 13,042 13,690 11,714
Development 18,692 18,129 33,280 26,267 14,448 13,879 26,081
Total 32,182 32,533 45,870 36,981 27,490 27,569 37,795
*Printed Estimates
Source: 2013 and 2014 ARUD Sector Reports
An analysis of the expenditure trends for the period 2011/12-2013/14, indicate that, in general, Development
expenditure was lower at 77.6 percent compared to Recurrent expenditure at 95 percent. This was attributed to
low absorption by development projects and programmes owing to a number of challenges which include donor
conditionalities and slow procurement processes, among others. In 2013/14, the development expenditure was 78.4
percent compared to 93.3 percent recurrent expenditure.
Figure 8.1:Ministry Funds Absorption Rate
Source: MOALF
Economic Review of Agriculture [ERA] 2015 54