The Central Bank of Kenya head office in Nairobi. FILE PHOTO | NMG
Over the last few years, the country’s national accounts have come into sharp focus as Kenyans become more aware about the country’s financial position. This awareness has developed into concern, a situation worsened by the recent economic downturn caused by the Covid-19 pandemic.
It appears that the bigger concern for the government is how to increase its revenues to reduce the mismatch with its expenditures. The sharp decline in government revenues as a result of the negative impact of the pandemic on economic activity and tax cuts, particularly on individual taxpayers means that we should expect a wider fiscal deficit for as long as the current economic conditions persist. That is, unless there is a significant reduction in government expenditure, an unlikely scenario given that the government has to dig deeper into its pockets to manage the developing health and economic crisis.
