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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Kenya to lower fiscal deficit to three per-
cent of gross domestic product (GDP) 

NAIROBI (Xinhua) -- Kenya plans to lower its fiscal deficit progressively to three percent of gross domestic product (GDP) in the financial year 2021/22, down from 7.2 percent of GDP in last financial year, to ensure public debt sustainability, a senior government official said on Sunday.

National Treasury Cabinet Secretary Henry Rotich told a forum in Nairobi that the government recognizes the importance of managing public debt in a prudent way to ensure the debt burden is shared equally between the current and future generations.

“In order to lower the fiscal deficit, we have been implementing a tax policy and administrative reforms targeted at improving tax compliance and expanding the tax base to boost revenues collection,” Rotich said during the 49th Plenary Session of the African Economic Research Consortium Biannual Research Workshop.

The five-day event is expected to bring together over 200 participants, including researchers, policymakers and non-state actors.

Rotich said that to further ensure public debt sustainability the government has taken significant steps to strengthen government borrowing through lengthening the maturity profile of domestic debt so as to mitigate refinancing risks.

He said the fiscal consolidation efforts have ensured that the public debt remains sustainable.

“While Kenya’s debt has risen in nominal terms, the economy has continued to expand. As a share of GDP, gross public debt remains ways below the public debt sustainability threshold of 70 percent for lower-middle economies,” Rotich said.

“Indeed analyses by various observers, including the International Monetary Fund (IMF) and the World Bank, have reached the same conclusion that Kenya’s debt is within sustainable bounds,” he added.

Rotich said that in order to reduce the dependence on the exchequer to fund development programs, the government will leverage on the partnerships with the private sector under public-private-partnership arrangements.

To further grow tax revenues, he said, the government is working with the Kenya Revenue Authority on a program that focuses on enhancing tax administration and compliance.

“On the expenditure side, we are implementing various expenditure rationalization measures aimed at improving the efficiency of public spending,” Rotich added.

Rotich noted that the debt problem is not limited and unique to African countries but is a global one.

“As a matter of fact, the IMF has indicated that much of Africa’s debt is manageable. Some developed economies, emerging market economies and other developing economies have much higher debt-to-GDP ratios,” he said. .

             

 

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