Kenya risks missing its fiscal consolidation targets in the medium term due to its inability to cut its fixed recurrent budget costs, undermining the country’s ability to invest in job-creating development projects amid depressed revenue growth.
In its recently released Kenya economic update report, the World Bank said widening fiscal deficits, persistent revenue underperformance, rising pending bills, heavy reliance on local borrowing, and growing public debt have all contributed to weakening Kenya’s fiscal position, stalling the positive momentum seen in the initial post-pandemic period when the country cut its budget overrun.
