According to the East African Nation of Kenya’s National Treasury has projected that the country’s economy will expand by 6.4 percent in 2021. This is coming after the nation hit a low growth rate of 0.6 percent in 2020 according to estimates by the government.
The National Treasury stated that the economic recovery expected this year (2021), will be spear headed by the Economic Stimulus Program, improved trade volumes especially as countries all over the world get back on their feet from the effects of the pandemic, ongoing public investments in infrastructural projects, the stable macroeconomic environment, and the post-Covid-19 Economic Recovery Strategy.
The draft 2021 budget policy statement revealed that Kenya has implemented measures which will “stimulate economic growth, promote job creation, reduce poverty, protect the vulnerable groups and businesses.”
The country’s Growth Domestic Product (GDP) growth is however projected to drop down to 5.5 percent as a result of uncertainties centered around the elections scheduled for that year.
The Kenyan government anticipates that revenue collection will increase by 9 percent to 1.829 Trillion Kenyan Shillings by the end of the fiscal year that is 2020 to 2021. This is significantly higher than the 1.675 Trillion which was collected at the end of the fiscal year for 2019 to 2020.
The total revenue collected for the first half of the fiscal year that is 2020/2021 (up to 31st of December 2020) was 800.1 Billion Kenyan Shillings. This was lower than the government’s projection of 907.7 Billion Kenyan Shillings.
The budget policy statement which was issued by the National Treasury read, “Revenues are expected to progressively improve in the second half of the fiscal year following the gradual reopening of the economy and the increased demand for imports as well as improved domestic sales. Revenue performance is also expected to get a boost from the reversal of tax reliefs, introduced in April 2020, effective January 2021.”
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