Kenya in 2020: higher taxes, higher debt, more referendums

 Posted on Thursday, 16 January 2020 07:39

Kenya's President Uhuru Kenyatta waves as he arrives to take part in the national celebration marking Kenya's 56th Jamhuri Day or Independence Day at the Nyayo Stadium in Nairobi, Kenya. December 12, 2019. REUTERS/Njeri Mwangi -

Kenya’s President Uhuru Kenyatta, nearing the end of his second term amid an economic downturn and political shifts, announced a raft of changes in a televised address on 14 January, of which the “primary thrust…was economic.”

The East African nation with a population of 47 million began the 2020s facing a multitude of challenges, many of its own making over the last decade, and others due to regional and international events.

The main challenge is Kenya’s economy which has slowed significantly despite — some might argue because of — massive investments in infrastructure development.

In his address, televised from his official residence in the coastal city of Mombasa, Kenyatta outlined a plan to shift gears, reshuffle his cabinet, get rid of several non-performing Cabinet Secretaries, and address specific economic and political issues.

Seek ye first the economic kingdom

“I want the economy to be more important focus than politics,” Kenyatta said at the beginning of his address. [Read the full speech.]

• Kenyatta confirmed Ukur Yattani, appointed acting finance minister last July after his predecessor was arrested and prosecuted for economic crimes, as the country’s new Cabinet Secretary for Treasury.
• In the seven months since he took over, Yattani has provided what appears to be a more accurate report of the health of Kenya’s economy. He now has the daunting task of steadying the ship and balancing a growing macroeconomic downturn with debt repayments and missed revenue targets.

Kenyatta said the country’s two-tier governments had paid 70% of outstanding bills to suppliers and contractors in the last two months, and that infrastructure bills would be paid in early 2020, in time for an infrastructure bond of Shs 150 billion.

The plan, he said, is to increase the circulation of money in the struggling economy.

Last November, Kenyatta expended significant political capital to push the country’s legislature to remove a 2016 interest rate cap. “The removal of the interest rate cap in November last year will facilitate the availability of more credit to businesses which will, in turn, increase the circulation of money,” he said in his speech.

Source: TheAfricaReport.