The Ministry of Small and Medium Enterprises was allocated only US$8.7 million in the 2014 budget though it had applied for US$81.3 million and it says this will make it impossible for it to meet goal number one of the Millennium Development Goals.
Goal number one is the eradication of extreme poverty. The MDGs must be achieved by next year, 2015.
A report by the Parliamentary Portfolio Committee on Small and Medium Enterprises and Cooperative Development said the ministry had been given very low priority yet small enterprises were the drivers of economy.
It said SMEs contributed 60 percent of the country’s gross domestic product according to a study in 2012 and employed 5.8 million people. But the ministry was 4th in terms of lowest priority down from 13 last year.
It was allocated only 0.21 percent of the total 2014 budget down from 0.25 percent in 2013 when the ideal allocation to achieve the eradication of poverty was 1 percent.
The Ministry had applied for an allocation to buy 102 vehicles and 75 motorcycles in the current budget but was allocated only US$60 000.
It also said it wanted to increase its staff from 330 to 400.
The government was not able to allocate money for capital expenditure because salaries for civil servants are taking more than 70 percent of the budget.
Civil servants have been demanding salaries linked to the poverty datum line, which would have stretched the salary budget even further, but the government awarded them salaries that are three-quarters of the PDL.
The salaries are likely to be reviewed mid-year.