Kenya’s economy is in trouble mostly due to low tax collections, high interest rates, poor balance of payments and growing inflation. According to the respected Business Daily, the shilling is now the third worst performer in Africa. Inflation is 6.02 per cent. Additionally, there are serious agitation by public workers, including lecturers, doctors and teachers for higher pay. This will eventually grow the public wage bill higher than the current 12 per cent. Yet Kenya cannot afford a wage bill higher than 7 per cent. It is also instructive that the salaries of MPs are among the highest on per capita terms, second only to Nigeria. Kenya is ranked the third most corrupt. There is therefore a compelling need for a paradigm shift in macro-economic management. The Kibaki administration was helped by robust growth in tax collections unlike the Uhuru regime that continues to suffer tax revenue plateau mainly due to lack of tax reforms. As a result, Vision 2030 is now permanently derailed until further notice, with insufficient budgetary allocations to key flagship projects.
Posted on: Tue, 06 Aug 2013 14:58:41 +0000
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