Zachary Ochuodho @zachuodho
Kenya has been urged to seal revenue leakages, lower yield on government securities, narrow the increasing gap between revenue collection and spending to realise the “Big Four” agenda.
The agenda includes provision of affordable housing, rolling-out universal health coverage, increasing share of manufacturing in the economy and improving food security within five years.
Allen Dennis, World Bank senior economist and lead author of the Kenya Economic Update (KEU), said for the “Big Four” to be realised there is the need for support from both the public and especially the private sector.
“Policy reforms can play an important catalytic role in incentivising private sector resources to advance the “Big Four,” he said. He said subdued credit to the private sector, especially for the households and small enterprises and negative spillovers from the global economy are a threat to realising the agenda.
Speaking yesterday during the launch of the 17th edition of KEU, Dennis said Kenya’s gross domestic product (GDP) growth is projected to recover to 5.5 per cent in 2018 up from an estimated 4.8 per cent last year.
Dennis said lowering of yields on government securities will incentivise longer-term lending, for instance, mortgages, standardisation of mortgage contracts and reviewing stamp duties for first-time buyers.
He said the government should roll out policy initiatives that will spur credit growth to the private sector to reduce the deficit to safeguard macroeconomic stability and support the recovery of the economy.
“There is need for the government to cut its recurrent spending to rein in fiscal deficit. This is critical given the increasing share of recurrent expenditure in revenues — both at national and county level,” said Dennis.
He said statistics indicate that at the national government the recurrent expenditure increased from 86.2 per cent in first half of 2016/17 to 98.5 per cent in first half of 2017/18.