Kenya’s economic potential points to a country capable of self-sustenance

Covid-19 has extensively suppressed world economies over the past one year -Kenya’s included.

Thousands have had to contend with substantial pay cuts as their employers endeavoured to align to the tough times. In a report released last year, the Kenya National Bureau of Statistics (KNBS) noted that almost 4.64 million people had lost their jobs by June 2020 up from 2.94 in March 2020 when the first confirmed case of Covid-19 was reported. As it stands, the situation could be worse.

Despite the suppressed economic progress, the tax revenues collected by the Kenya Revenue Authority (KRA) have maintained an upward trajectory, especially in the past four to five months. In December 2020, for instance, KRA surpassed its revenue collection target for the month by Sh2 billion after posting a collection of Sh166 billion.

In January 2021, the taxman collected Sh142 billion against a target of Sh138 billion. The taxman further posted an impressive performance last April where Sh176.6 billion was registered against a target of Sh170.2 billion.

While it is still a bit early to establish if the annual revenue targets will be met cumulatively, the trend so far heralds a resilient economy with unmatched potential. With no definite end to the prevailing pandemic, experts are still optimistic that the economic outlook will continue to take an upward trajectory.

According to a 2021 publication by the African Development Bank, the economy is projected to grow by five per cent in 2021 and 5.9 per cent in 2022. This is based on the assumption that economic activities will normalise on full reopening of the economy.

Looking at the above statistics, it is clear our country has great potential to mobilise enough domestic resources for self-sustenance. If KRA is already surpassing its revenue collection targets with the partially opened economy, how much more would the government collect with a fully open economy?

The government should continue putting in place strategic measures to fully open the economic and enhance domestic resource mobilisation. Citizens on the other hand should be truthful to their country by paying the rightful share of tax.

That way, it will only be a matter of time before we emancipate ourselves from the webs of foreign debts, which continue to strangle our country, and thus lower the already high ceiling debt.

Faustin Mwinzi, Lecturer at KCA University