Kenyan Treasury Secretary Ukur Yatani will present a $33 billion national budget proposal to the Kenyan parliament today. The proposal
Kenyan Treasury Secretary Ukur Yatani will present a $33 billion national budget proposal to the Kenyan parliament today.
The proposal is the largest in Kenyan history, amounting to over $33 billion in total, with significant portions of the budget dedicated to economic stimulus and vaccine purchases. A major point of concern is financing the new budget, as revenue collection from traditional streams are inadequate because of the negative economic effects of the COVID-19 pandemic.
Kenya currently faces a budgetary gap of over $8.3 billion. That gap is likely to be financed through international loans from organizations such as the International Monetary Fund, worsening the country’s $67 billion debt burdens, which rose 16% from 2020. Despite these crucial concerns, expect the budget to be approved by the Kenyan Parliament, due to Nairobi’s desire to promote strong post-pandemic economic recovery to support President Uhuru Kenyatta’s reelection campaign.
In the short-term, expect tax levies on novel economic sectors such as digital services, and excise duty items such as cigarettes and jewelry to bolster revenue collection. In the medium-term, increased consumption and income and business taxes will be required to finance Kenya’s growing debt burden, thereby fueling public backlash against rising prices and national debts.