NAIROBI (Xinhua) --
Kenya plans to lower its fiscal deficit
progressively to three percent of gross domestic product (GDP)
in the financial year 2021/22, down from 7.2 percent of GDP in
last financial year, to ensure public debt sustainability, a
senior government official said on Sunday.
Cabinet Secretary Henry Rotich told a forum in Nairobi that the
government recognizes the importance of managing public debt in
a prudent way to ensure the debt burden is shared equally
between the current and future generations.
“In order to lower
the fiscal deficit, we have been implementing a tax policy and
administrative reforms targeted at improving tax compliance and
expanding the tax base to boost revenues collection,” Rotich
said during the 49th Plenary Session of the African
Economic Research Consortium Biannual Research Workshop.
The five-day event
is expected to bring together over 200 participants, including
researchers, policymakers and non-state actors.
Rotich said that to
further ensure public debt sustainability the government has
taken significant steps to strengthen government borrowing
through lengthening the maturity profile of domestic debt so as
to mitigate refinancing risks.
He said the fiscal
consolidation efforts have ensured that the public debt remains
“While Kenya’s debt
has risen in nominal terms, the economy has continued to expand.
As a share of GDP, gross public debt remains ways below the
public debt sustainability threshold of 70 percent for
lower-middle economies,” Rotich said.
“Indeed analyses by
various observers, including the International Monetary Fund (IMF)
and the World Bank, have reached the same conclusion that
Kenya’s debt is within sustainable bounds,” he added.
Rotich said that in
order to reduce the dependence on the exchequer to fund
development programs, the government will leverage on the
partnerships with the private sector under
To further grow tax
revenues, he said, the government is working with the Kenya
Revenue Authority on a program that focuses on enhancing tax
administration and compliance.
“On the expenditure
side, we are implementing various expenditure rationalization
measures aimed at improving the efficiency of public spending,”
Rotich noted that
the debt problem is not limited and unique to African countries
but is a global one.
“As a matter of
fact, the IMF has indicated that much of Africa’s debt is
manageable. Some developed economies, emerging market economies
and other developing economies have much higher debt-to-GDP
ratios,” he said. .