CS National Treasury remarks at MTEF hearings
In his key note at the opening of the opening of the public Hearings on the FY 2021/22 and the medium-term Budget proposals at the Kenyatta International Convention Center on 25th November 2020, CS Ukur Yatani addressed the public on various elements of financial planning for the next financial year taking into account the impact of COVID on Governemnt planning and spending. Key Highlights of his speech include:
- Economic growth for 2020 is projected at 0.6 percent in 2020 and 6.4 percent in 2021. Over the medium-term growth will be above 6.0 percent.
- As at end 31st October 2020, the overall fiscal balance amounted to a deficit of Ksh 223.7 billion (2.0% of GDP) against a targeted deficit of Ksh 172.8 billion (1.5% of GDP). As a comparison, the overall deficit in the corresponding period in 2019 was Ksh 133.8 billion.
- Total cumulative revenues as at end of October 2020, including Appropriations-in-Aid (A-i-A), was Ksh 505.3 billion (or 4.5% of GDP) against a target of Ksh 570.7 billion reflecting a shortfall of KES 65.4 billion.
- The shortfalls in government revenues are as a result of suppressed economic activities as a result of the pandemic, as well as the tax reliefs implemented in April 2020 to cushion people and businesses from the adverse effects of the pandemic.
- The Government remains committed to pursuing a fiscal consolidation policy. The policy aims at gradually reducing the fiscal deficit from 8.0 per cent of GDP in FY 2019/20 to 3.5 per cent over the medium term. FISCAL consolidation will be achieved through enhancement in revenue collection, expenditure rationalization in non-priority areas and sustainable public borrowing. The outcome will be a reduction in the fiscal deficit that will ensure debt sustainability. We will also continue with the implementation of the “Big Four” Agenda and initiatives under the Post COVID-19 Economic Recovery Strategy (PCERS). This will reposition the economy on a steady and sustainable growth path.