Kenya’s Finance Minister, Ukur Yatani Kanacho, has reported that Kenya’s economy is expected to grow at a lesser rate than previously predicted. According to his statement, the treasury of the nation has adjusted its projection from a 2 percent growth to a 0.6 percent growth. Conversely, a World Bank economic analysis expects Kenya’s economy by 1 to 1.5 percent.
Much like the rest of the world, Kenya’s economy did not remain immune to the destabilizing effects of the COVID-19 pandemic. This is the first time since the 2008 global financial crisis that the East African nation’s second-quarter output has declined. While the nation’s debt to GDP ratio was 62.4 percent in June of 2019, it is now 65.6 percent.
In a meeting to start preparations for the budget allocation for the 2021 financial year, the Finance Minister approximated the expectation of growth to around 6 percent. Economic recovery is already starting to be observed, according to various reports, giving officials hope that the worst is already past.
One of the main factors behind the lower expectations is the hit the government’s budget deficits took due to a decrease in revenue collection. Experts are cautiously optimistic considering that they are better equipped to handle economic pitfalls along with the unusual impact the education sector is expected to have by adding 2.2 percentage points to GDP growth.
In July of 2019, Kenya’s president had replaced the then Minister of Finance, Henry Rotich after he and other officials were accused of inflating the cost of dams that were set to be constructed in the Western region of the country and attempting to defraud the government.