Kenyan economy out of the woods

By Jackson Okoth

That the Kenyan economy is projected to have registered a growth rate of over five per cent last year, is an indication that it is on the road to recovery.

"The key challenges we face now as a country are to achieve and sustain high rates of economic growth, broaden participation and extend opportunities to all", said Deputy Prime Minister and Minister for Finance Uhuru Kenyatta.

He made the remarks yesterday at the opening of a three-day sector hearings on proposals for the next medium-term expenditure framework (MTEF) budget, covering the 2011/12-2013/14 period.

These meetings are being held at the Kenyatta International Conference Centre (KICC).

"This occasion gives us an opportunity to formally engage members of the public, development partners, civil society and other stakeholders on the performance of various sectors for the last three years," said Kenyatta, who was represented at the meeting by Treasury PS Joseph Kinyua.

The ensuring MTEF budget, to cover the next three years, is expected to lay the foundation for decentralisation of resources to the counties, as per the new Constitution.

"We are planning to introduce comprehensive public finance management legislation that integrates the entire budgeting and budget management process," said Kenyatta.

Transparency, accountability

The proposed legal framework will also provide for transition in the format that the budget is presented to parliament from the current itemised to programmatic format.

" The law, if implemented as envisaged, will enhance efficiency, transparency and accountability in the management of public resources," said Kenyatta.

Discussion on the next MTEF is taking place when the economy is pulling out of negative and slow growth arising from the 2008/09 economic shocks.

" While the economy is bouncing back, significant challenges remain. For instance, we need to unwind from the economic and fiscal stimulus package to pre-empt any inflationary tendencies," said Dr Geoffrey Mwau, Economic Secretary, Treasury. While Treasury has maintained macroeconomic stability under severe conditions prevailing in the economy, revenue collections remain a challenge.

" We also face increasing pressure to implement the new constitution as well as some items in Agenda 4," said Dr Mwau.

Available figures indicate that Kenya Revenue Authority (KRA) had a collection deficit of Sh12 billion.

"We expect a favourable scenario with the passing of the new Constitution as well as renewed interest from foreign investors," said Dr Mwau.

Kenya’s economy is projected to record a GDP growth of 5.7 per cent this year and 6.5 per cent in the medium term.