Cabinet Secretary National Treasury Henry Rotich (right) and Abebe Aemro Selassie, the director of the Africa Department Department at IMF, keenly follow proceedings during the launch of the Regional Economic Outlook for Sub-Saharan Africa at Serena Hotel in Nairobi.
Kenya registered strong economic growth in the second quarter of 2016. It is projected that the growth will remain on course and expand by over 6.0 per cent in the last quarter of 2016 and rise to 6.5 per cent in 2017.
National Treasury Cabinet Secretary Henry Rotich said the country’s growth is much higher than the average for the Sub-Saharan African region of 1.4 per cent. “Kenya’s robust economic growth is supported by the ongoing investments in infrastructural development, private sector investments resilient domestic demand, private sector investments, recovery in the tourism sector and growth in exports to the sub region,” Mr Rotich said while launching the Regional Economic Outlook for Sub-Saharan Africa today at Serena Hotel in Nairobi.
He said that the Government is in the process of widening its tax base especially in the informal sector to finance ongoing infrastructural development. Mr Rotich said he will focus on implementing more reforms in tax legislation to enable the Government to seal loopholes and to increase revenue collection.
He added that the country is doing well in revenue collection, which currently stands at 20 per cent of Gross Domestic Product compared to South Africa at 25 per cent. Majority of Sub-Saharan Africa are way behind ranging between 10 and 17 per cent. “In order to reach the level of South Africa which is the country’s benchmark now, it will take a gradual process because new tax legal framework measures take time to enact and implement”, the CS said.
Mr Rotich said developed countries raise revenues equivalent to at least 40 per cent of their GDP. He said that the Government is expanding domestic financing and would go to international markets for another Eurobond at the appropriate time.
“The Government must access concessional loans first before issuing a Eurobond,” he said. The CS said the public debt will continue being sustainable as long as Kenyans continue to be innovative in generateing more resources that lead to more revenues.
Mr Rotich said that the Government is reviewing and harmonizing wages for the next Finance Bill while awaiting the new income tax bill to become operational. He urged Kenyans to live within their means to avoid financial shocks that are being experienced by other countries now.
Those who were present during the launch included Mr Abebe Selassie, Director of African Department, IMF Mission Chief Ben Clements and Morales Armado, IMF Resident Representative to Kenya among other officials.