IMF Set To Visit Kenya To Asses Treasury

By Juma / Published October 18, 2016 | 7:31 am



kenyan-2015-2016-budget

The International Monetary Fund (IMF) will be visiting Kenya later this month to assess whether the Treasury is complying with commitments made under the 150 billion-shilling precautionary financing facility arranged in March this year.

One of the conditions for the government from the IMF was to narrow its budget deficit to below 6.5 percent of GDP in the current fiscal year and to 5.0 percent in 2017/2018 fiscal year.

However, Kenya projects its funding gap widening to 9.3 percent of GDP in the year to June 2017 from 7.9 percent in 2015/2016 fiscal year.

The Treasury intends to spend 2.3 trillion during this fiscal year, 11.2 percent more than it did last year. The Treasury plans to borrow 229.6 billion shillings locally and another 401.7 billion shillings externally to plug in the shortfall.

Given the increased expenditure on infrastructure projects and the need to regain power in upcoming elections, chances of the government cutting back spending are slim. According to Cytonn Investments Report the differences between the government and the IMF on budget cuts may make it more difficult for Kenya to access the facility if need be and also might be difficult for Kenya to access funds from the global markets, and if they do it will be at very high rates like it happened in Ghana where they borrowed at 9.25 percent.

The IMF this week in its review on the economic outlook for sub-Saharan Africa, has projected the growth rate in the region to weaken after a year of solid growth. IMF forecasts the growth among the 45 countries that make up this region to drop to its lowest level in more than two decades with a drop of over 50 percent to 1.4 percent this year from 3.5 percent in 2015.

The decline in growth is attributed to;

  • Declining oil prices which has affected key commodity exporting economies, such as Nigeria,
  • Terrorism and humanitarian crimes,
  • Critical drought particularly in Lesotho, Malawi and Zambia.

These elements have contributed to a slowdown in flow of foreign direct investments into the region as well as creating uncertainties among investors who have flown to safety.

Among the worst hit economies are; Nigeria, Cameroon, Angola and Chad. However, some economies in the sub-Saharan Africa region have continued to experience strong growth, such as Ethiopia, Senegal, Tanzania and Cote d’Ivoire. This forecast by IMF comes at a time when the World Bank also predicts a drop in growth in Sub Saharan Africa to 1.6 percent in 2016 from 3.5 percent in 2015. Of key note is that despite the challenges experienced by commodity dependent countries in the SSA region, the East Africa economies continue to record strong GDP growth with Kenya recording 6.2 percent growth in Q2’2016 and we project Kenya’s GDP growth for 2016 to come in at 6.0 percent.

 




About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

View other posts by Juma


More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2022
  • January 2022 (293)
  • February 2022 (329)
  • March 2022 (360)
  • April 2022 (294)
  • May 2022 (271)
  • June 2022 (232)
  • July 2022 (278)
  • August 2022 (253)
  • September 2022 (246)
  • October 2022 (196)
  • November 2022 (230)
  • December 2022 (59)
  • 2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (259)
  • May 2021 (285)
  • June 2021 (273)
  • July 2021 (277)
  • August 2021 (232)
  • September 2021 (271)
  • October 2021 (305)
  • November 2021 (364)
  • December 2021 (249)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (333)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (251)
  • February 2019 (215)
  • March 2019 (283)
  • April 2019 (254)
  • May 2019 (269)
  • June 2019 (249)
  • July 2019 (335)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (318)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (275)
  • April 2018 (223)
  • May 2018 (235)
  • June 2018 (176)
  • July 2018 (256)
  • August 2018 (247)
  • September 2018 (255)
  • October 2018 (282)
  • November 2018 (282)
  • December 2018 (184)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (189)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (164)
  • February 2016 (165)
  • March 2016 (189)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (247)
  • September 2016 (233)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (164)
  • April 2015 (107)
  • May 2015 (116)
  • June 2015 (119)
  • July 2015 (145)
  • August 2015 (157)
  • September 2015 (186)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (205)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950