The Kenyan economy is expected to rebound to 6.6 percent in 2021 through the government’s intent to better the microeconomic environment in the ongoing implementation of the Big 4 Agenda.
Kenya is keen on fast-tracking implementation of the agenda to enhance food and nutrition security, achieve Universal Healthcare Coverage (UHC), provide affordable housing and support growth of manufacturing sector for job creation.
The Big 4 have been allocated Ksh.142.9 billion in the next Financial Year 2021/22 Ksh.3.03 trillion national budget.
“The government will maintain macroeconomic stability and enhance security to foster a secure and conducive business environment and security of Kenyans and their properties,” said National Treasury Cabinet Secretary Ukur Yatani.
Total government expenditures are projected at Ksh.3.03 trillion equivalent to 24.5 percent of GDP from Ksh.2.89 trillion equivalent to 25.8 percent of GDP in the current financial year.
To revive the economy, Treasury also aims to scale up development of critical infrastructure in the country such as roads, rail, energy and water which have been allocated Ksh310.7 billion.
- Kenya’s economy projected to grow by 7.6% in 2021
- BBI will stabilise Kenya’s economy
- World Bank projects Kenya’s economy to grow by 6% [Data]
Local firms will be prioritised in the awarding of contracts to promote the local business as well as promote competitiveness.
Further enhance investment in key economic sectors for broad-based sustainable recovery by promoting agricultural transformation, growth in manufacturing, environmental conservation and water supply, stimulating tourism recovery, and sustainable land use and management.
Expansion of access to quality social services in health, education and appropriate social safety nets for the vulnerable population is also a priority according to the CS Yatani.
To achieve this, the government has set aside Ksh.23.1 billion to keep cushioning Kenyans affected by COVID-19 where a portion of it, Ksh.3 billion will go into youth empowerment under “Kazi Mtaani” initiative.
Through the transfer of shareable revenue in the devolved units, CS Yatani has allocated Ksh.409.8 billion to strengthen their systems and capacity in service delivery and implement various policies.
The rebound is also expected in the key economic indicators to include horticulture and tea exports as well as increased inflows of remittances to enhance adequate levels of official foreign exchange reserves.
“Inflation which stood at 5.9 percent in May 2021, is expected to remain within a target range of 5.0 percent with a margin of 2.5 on either side, supported by prudent fiscal and monetary policies. Interest rates will be expected to remain low and stable supporting growth of private sector credit,” said the CS Yatani.
This, Yatani said will create buffers against short-term economic headwinds in the foreign exchange market.
The year 2020 saw Kenya’s economy plummet to 0.6 percent from 5.4 percent in 2019.
The shock was because of the triple tragedy that included locusts invasion, floods that caused loss of lives and livelihoods, displacement of people and destruction of infrastructure and the novel coronavirus pandemic.
To support the projected growth outlook, however, CS Yatani said the government will continue to maintain macroeconomic stability.
Yet, the government’s projection for economic recovery is lower than what the International Monetary Fund (IMF) had forecasted for the country at 7.6 percent.
The multilateral lender says that Kenya’s economy is now picking up speed after the COVID-19 shock, but the pandemic has left deep imprints on the country’s fiscal and debt positions.