Kenya’s GDP projected to grow by 5pc, EY tax Advisors

NAIROBI, Kenya, April 17 – Kenya’s Gross Domestic Product (GDP) is expected to grow by around 5 percent in 2024, according to global tax advisors Ernst & Young (EY).

Speaking during the country’s pre-budget briefing, the company’s Associate Tax Director, Gobert Maina, said that the Kenyan economy remains resilient even as it recovers from the ravages of the Covid-19 pandemic and the worst multi-season drought over the past two years.

He revealed that the Kenyan shilling continues to gain against its American counterpart, majorly driven by the issuance of a new Eurobond that facilitated a buyback of $1.5 billion (Sh198 billion) out of the $2 billion (Sh264 billion).

This, he says, is good for the country as it is likely to ease inflationary pressure and, in turn, lead to a scale-down in the prices of commodities in the country.

“Kenya is a net importer whether in fuel or food products. When the currency is gaining, we enjoy the reduction of food prices. We expect there will be a reduction in the prices of other products,” he said.

Likewise, EY suggested that the strengthening of the local unit is likely to see a decline in the overall public debt in the long term.

The local unit had in February reverted from a historical slide that saw it lose its value by almost 20 percent to gain against the dollar from Sh160 to Sh145.

As of April 17, the shilling traded at Sh132.75 against the greenback.

The World Bank disclosed last week that the Kenyan shilling is the best performing currency in the sub-continent after recording a 16 percent appreciation in mid-February.

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It, however, warned that the Kenya Revenue Authority (KRA) is likely to miss its 2023–2024 target by Sh330 billion owing to inefficiencies in the sector, particularly in the eTims rollout.

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