Economics

World Bank Urges Kenya to Rethink Fiscal-Consolidation Plan

Lender raises forecast for economic growth in 2020 to 6.1%
Nation should consider curbing expansion in recurrent spending

Kenyan shilling banknotes and coins sit arranged at a market stall in Mombasa, Kenya, on Thursday, Nov. 23, 2017. The country’s Treasury has already cut this year’s growth target to 5 percent from 5.9 percent as the protracted election furor damped investment and a drought curbed farm output.Photographer: Luis Tato/Bloomberg

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By Adelaide Changole

April 11, 2018 at 3:00 AM UTC

Updated on

April 11, 2018 at 12:01 PM UTC

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Kenya may need to recalibrate its fiscal-consolidation plans if it’s to see economic growth rebound from a five-year low reached in 2017, the World Bank said.

The government of East Africa’s biggest economy should slow the rate of expansion of recurrent expenditure, improve spending efficiency, restore the potency of monetary policy and rationalize tax exemptions to ensure its resources are fiscally sustainable, the Washington-based lender said in an economic update Wednesday.