Kenya’s economic prospects look bright as the economic growth has accelerated to 5.7% in the first quarter of the financial year 2018/2019 from 4.9% last year.
According to Treasury Cabinet Secretary Henry Rotich, economic recovery is on course and the government expects the economy to expand by 6% this year and a further 7% over the medium term.
“The economy has enough foreign currency reserve, one of the highest in our history, and is able to cover six months of imports and therefore, the country can survive even as the stand-by arrangement with the International Monetary Fund (IMF) expires,” said Rotich.
He added the Kenya Revenue Authority (KRA) has identified key revenue enhancement initiatives in order to turn around low revenue performance and called upon Kenyans to help the government to raise revenue which will be geared towards improving the country’s well-being.
“Economic growth is very important as it creates an environment where jobs are being created and opportunity for businesses to thrive as well as more avenues for government to collect revenue to expand infrastructure projects,” said CS.
According to Rotich, the government has in the past 10 years been able to tremendously improve roads, railways, airports, seaports infrastructure putting the country above the regional neighbours.
He added that they will continue the process of fiscal consolidation to reduce the deficit in the budget which stands at 7% and reduce the dependency on debts over the medium and long-term.
“In an effort to strengthen our public investment management framework, we have now set up a public investment management unit at the National Treasury which will require the accounting units at the national and county level to adhere to before projects are selected for budgeting and implementation to ensure that projects are selected and implemented in time and within the budget,” he explained.
The CS was speaking on Thursday during the unveiling of the 2019/20 budget planning process at the Kenyatta International Convention Centre (KICC).
National Treasury Principal Secretary Dr Kamau Thugge said that the Big Four Agenda will accelerate economic growth to 7% tin the medium term.
“There has been an increase in the per capita income of Kenyans from the year 2012 when it was Ksh 104, 000 and in the year 2017 it had reached Ksh 166, 000 per year which is 60 percent increase in the past five years,” explained Thugge.
Thugge said that Kenyans should not question why they are being taxed saying that there are various wonderful programmes that the government needs to continue funding including the cash transfer for people over 70 years, cash transfer to orphans and people living with disability, examination fees, free primary education, free day secondary education, budget support for technical and vocational training and funding the Higher Education Loans Board (HELB), among others.
He added that though the precautionary arrangement with the IMF, which cushioned from external shocks has expired, there is no reason to worry since the country did not draw from the funds even during the harsh drought last year and the floods which required the country to import a lot of food.
On the country debt level, Thugge explained that the country is safe since most people look at the increase in debt but don’t look at the capacity of the economy to pay.
“The threshold by the World Bank is 73% to the GDP and Kenya’s debt is at 49% with a focus to bring it down to 44%,” he explained.