Kenya to Reduce Budget Deficit to 7.5% of GDP in 2021/22

The Kenya National Treasury projects that the budget deficit will reduce from 8.7% to 7.5% of the GDP in the fiscal year 2021-2022 that is set to begin on 1^st July 2021.

The treasury plans to do this by introducing measures such as reducing wastage and inefficiencies, applying ring-fencing development spending and raising revenue collection. The government agency predicts that through the resumption of international trade, investments in big four agenda projects, stable inflation and foreign exchange rates, and increased lending to the private sector, the economy is expected to expand by 7% in 2021.

According to the National Treasury’s statement, the government is to use Ksh.81.75 billion received from the World Bank to increase electricity connections in the country, promote green energy, strengthen the health and education sectors, and strengthen debt management. The loan is set to be approved by the end of April or early May and is part of the development policy operation loan III.

The treasury promises to ensure and promote transparency in government spending.

By Fatiha Shabir