Exploring trends set to shape the future in Kenya: Finance
Oct 31, 2021 | by Horizon Kenya
A Pandemic Amidst An Imminent Debt Crunch
PART A: UNDERLYING TRENDS
Owing to unproductive spending and a growing dependence on commercial loans, Kenya is facing a potential debt crisis.
Kenya’s debt has been rising since 2013 and growing interest costs are placing downward pressure on government spending.
Kenya’s rising debt level has been caused by – among other things – unproductive spending.
Over the long-term, certain factors may help avert a debt crisis, such as the attraction of private sector investment, the discovery of oil and demands from youth for fiscal accountability.
PART B: IMPACT OF COVID-19 ON FINANCE IN KENYA
COVID-19 has placed further strain on Kenya’s challenging financial situation.
PART C: CONCLUSION
What might a deeper deficit mean for economic transformation?
Narrowing fiscal space may put political pressure on reform efforts already underway.
Kenya will need investment to boost private sector growth, alleviate fiscal pressure, and put the country on a path to transformative growth.
Channeling appropriate finance requires a clear vision and prioritising strategic projects in the right sectors.