Cabinet Report: Kenya's economy strongly recovering

The Cabinet has been briefed on the economic situation in the country following two years of deliberate fiscal management measures.

The meeting, chaired by President William Ruto at State House, Nairobi was told the economy strongly recovering from past global and domestic challenges, achieving robust growth.

Members were informed that inflation, which reflects the increase in prices over time, had declined substantially to 2.7 per cent last month, down from a high of 9.6 per cent in September 2022.

“This is the lowest inflation rate since 2007, during President Mwai Kibaki’s tenure and aligns with the target set in the Kenya Kwanza Manifesto,” a despatch from State House said.

The meeting was told prices of various types of food, particularly maize, beans, and peas, have decreased over the past year.

“A 2 kilogramme packet of maize, which was retailing at Sh176 a year ago is now selling at Sh124.”

The Cabinet was also informed that foreign exchange reserves at the Central Bank are at an all-time high of US$9.5 billion, an increase of US$2.4 billion, equivalent to 4.4 months of export cover.

The meeting was further briefed that the country’s economic growth has remained steady and ranks among the highest globally, at 5.6 per cent in 2023, with an estimated growth of 5 per cent this year and 5.6 per cent next year.

The Cabinet was informed that the shilling has stabilised at Sh129 from Sh162, after appreciating by nearly 20 per cent earlier in the year.

“This appreciation has led to reduced external debt service,” the despatch added.

It said interest rates are beginning to decrease, which will result in lower domestic interest rate costs, creating fiscal space.

On the revenue side, it was noted that the Kenya Revenue Authority’s tax collections have grown by double digits. The tax revenue increased by 11.5 per cent in the year to June 2024.

The food situation in the country, the Cabinet was informed, is stable due to the government’s subsidised fertiliser programme and other support measures extended to farmers.