attributes the rebound to a recovery in agriculture, steady pick-up in industrial activity and continued robust performance of the services sector. The pick-up in Kenya’s economy is also reflected in improved household consumption and a developing recovery in private investment.
Since the 2017 announcement of the “Big 4” development agenda, which prioritizes food security, housing, universal health coverage and manufacturing, Kenya has made some progress in instituting policies that crowd-in private sector engagement, particularly within the affordable housing pillar.
The legal and regulatory framework for the Kenya Mortgage Refinance Company (KMRC) has been completed, the Stamp Duty Act providing an exemption for first-time home buyers has been signed into law, and standardized forms to register a change in property ownership have been introduced.
“While progress is being made to advance the “Big 4”, given the ambitious nature of these objectives, it calls for accelerating the pace of structural reforms, particularly in areas that helps crowd in the private sector to advance the “Big 4,” said, SENIOR ECONOMIST AND LEAD AUTHOR OF THE KEU.
The special section of the KEU examines the distributional consequences of government’s spending and taxation measures. The analysis could provide input for designing pro-poor policies and describes the rate at which economic growth translates into poverty reduction.
“Personal income tax in Kenya is progressive with the poorest 40% accounting for 14.3% of market income but less than 1% of direct taxes,” said, SENIOR ECONOMIST AND AUTHOR OF THE SPECIAL SECTION ON FISCAL INCIDENT ANALYSIS. “In contrast, 80% of the tax incidence is borne by the richest 10% of Kenya’s population.”
The special section also examines which benefits of social spending accrues to the poor. For example, cash transfer programs are well-targeted because a large fraction of the benefits is captured by the poor. However, cash transfer schemes in Kenya cover only a small portion of the population and could be expanded further to increase their poverty-reducing effect. However, more robust revenue mobilization would be needed to increase coverage significantly.
Devolution remains the biggest gain from the August 2010 constitution, which ushered in a new political and economic governance system. It is transformative and has promoted greater investments at the grassroots, strengthened accountability and public service delivery at local levels.
While economic activity faltered following the 2008 global economic recession, growth resumed in the last five years reaching 5.7% in 2019 placing Kenya as one of the fastest growing economies in Sub-Saharan Africa. The recent economic expansion has been boosted by a stable macroeconomic environment, positive investor confidence and a resilient services sector.
Looking ahead, medium-term gross domestic product growth (GDP) is expected to rise to 5.9% in 2020 and 6.0% in 2020 underpinned by private consumption, a pick-up in industrial activity and still strong performance in the services sector. Inflation is expected to remain within the government’s target range while the current account deficit is projected to remain manageable.
In addition to aligning fostering economic development through the country’s development agenda to the long-term development plan; Vision 2030, the President in December outlined the “Big Four” development priority areas for his final term as President. The Big Four will prioritize manufacturing, universal healthcare, affordable housing and food security. Social Development.
A lot of bad investors wanted to invest in the country in the past years but the governement refuses.
Kenya has met some Millennium Development Goals (MDGs) targets, including reduced child mortality, near universal primary school enrolment, and narrowed gender gaps in education. Interventions and increased spending on health and education are paying dividends.