Kenya Sees Economic Growth Fall to as Low as 1% This Year
Kenyan Treasury Sees 2020 Economic Contraction of at Least 50%
Kenya’s economic growth could slow to as low as 1% this year as effects of the coronavirus pandemic take a toll on businesses and revenue, according to the National Treasury Secretary Ukur Yatani.
Economic expansion could be “between 1% and 3%,” Yatani said by phone on Tuesday. It “is still uncertain,” he said.
That would be a decline from growth of 5.7% in 2019. The government of the East African nation was, even before the Covid-19 hit, struggling to boost revenue and fund projects in manufacturing, farming, healthcare and housing.
“The drop in demand, disruption of the supply chain and the sharp deterioration of global financial conditions has negatively affected tax revenue,” Yatani said in statement in Nairobi-based Business Daily newspaper.
The International Monetary Fund forecast Kenya’s 2020 economic growth at 1% and 6.1% next year. That compares with the Fund’s expectations that Sub-Saharan Africa’s economy could contract 1.6% this year, and grow 4.1% in 2021.
Kenya expects to tap financial support from the IMF and World Bank by the end of April to boost the government’s efforts of mitigating shocks caused by the virus, Yatani said. The Treasury will also pursue measures to manage it’s debt including slowing down commercial borrowing, he said.
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