Mbadi says government on track to lessen Kenyans’ burden
At the end of 2024, through the tax law amendments, the government systematically set in place measures to ease off the burden on the pay slip, he avers
The government has managed to reduce gross public debt-to-GDP ratio to 66.7 per cent in June 2024 from 71.9 per cent in June 2022 through a combination of tax policy, spending cuts and raising economic vibrancy in some sectors.
National Treasury Cabinet Secretary John Mbadi said public debt has been declining demonstrating a commitment to fiscal responsibility. He said the stock of public debt as at end June 2024 stood at Ksh 10.561 trillion or 66.7 percent of GDP.
Speaking during a media briefing on what the government is doing to ease the burden of Kenyans from many issues affecting them, the CS said easing the debt burden in 2024 made the economy record a growth of 5.0 per cent Q1; 4.6 per cent Q2 and 4.0 per cent in Q3 of 2024 and projected 4.7 per cent in Q4 of 2024.
Mbadi said the real growth has been revised to 4.6 per cent for 2024 and is expected to rebound to 5.3 per cent in 2025 and 2026.
The CS said the increase in the export of goods as well as increased remittances has helped improve the current account deficit to 3.6 per cent of growth in the 12 months to December 2024 from 4.4 per cent of GDP in a similar period of 2023.
Mbadi said remittances increased by 16.7 per cent to US$4,872 million (Ksh 629,218,800,000 ) in the 12 months to November 2024 compared to US$4,175 million (Ksh 539,201,250,000) in a similar period in 2023.
“Remittances increased forex inflows into the country, with some going to investment while others support household consumption of our people,” Mbadi said.
He said the stability in exchange rate to the dollar strengthened significantly to Ksh 129.4 by end January 2025 from Ksh 160.8 by end January 2024. This rate has since stabilised in the Ksh 128-130 range to the dollar.
He said because of the macro-economic factor, the official foreign exchange reserves at US$ 10,090.6 million (5.1 months of import cover) by end December 2024, provide adequate buffers and give market confidence.
He said due to the macro-economic performances, Central Bank’s benchmark lending rates to 10.75 per cent, which will further support lowering of lending rates and support growth of credit to the private sector.
The CS said at the end of 2024, through the tax law amendments, the government systematically set in place measures to ease off the burden on the pay slip.
“This government is there for all Kenyans and continues to expand her implementation of policies meant to promote liquidity,” Mbadi added.
He said failure to settle these bills in a timely manner has significantly affected the financial stability of businesses, particularly Micro, Small, and Medium Enterprises (MSMEs) and Government image.
The CS urged the county and national government to urgently resolve pending bills that are adversely affecting businesses, the economy, and public confidence in Government.
“Delays in PB payment have led to reduced profitability, increased costs of capital, liquidity constraints, and disruptions to operations; therefore addressing pending bills is crucial for releasing liquidity, enhancing economic performance, and restoring confidence, particularly among MSMEs,” he said.
