Page 20 - KANU MANIFESTO - 2022-2027 FINAL Draft 4.63

KANU MANIFESTO 2022-2027

Public Finance and National Debt Management
AGENDA 1 Our Vision

Kenya’s fiscal deficit widened to 8.2% of GDP in 2019/20 from 7.9% in 2018/19 (GoK, 2020). Revenue
shortfalls hampered budgetary consolidation efforts due to the COVID-19 pandemic. Persistent high
fiscal deficit and increasing public debt level pose a risk to the stability of the Kenyan economy,
which constraints the fiscal space for development expenditure. We envision prudent financial
management, increased revenue collection, efficient government expenditure, and improved socio-
economic well-being indexes for Kenyans.

Our Plan
By June 2021, Kenya’s local debt stood at 3.6 T and foreign debt at 4.0 T, totaling Ksh 7.7 T (Central
Bank of Kenya), 2021. We aim to decrease the uptake of foreign debt, utilize deficit funding through
the Central bank, enhance Kenya’s Fiscal and Monetary policy structures, revise the current tax
structures, and implement an economic culture to improve resource utilization and efficiency.
Our Commitment to Public Finance & National Debt Management

In the next five years, we will:
Establish and operationalize an autonomous Public Debt Management Office within 100 days to
enhance transparency in debt management.
Engage international lenders to negotiate and restructure the public debt portfolio to ensure
that no more than 20% of our internally generated revenues go to debt repayment.
Strengthen fiscal Policy that reduces over-reliance on foreign debt and encourages local
borrowing.
Decrease the uptake of foreign debt by 40% to GDP staggered over five years and encourage the
uptake of local bond issuance.
Strengthen the credit guarantee scheme to enable businesses to borrow with reduced
collateral. This will encourage the creation and development of new SME’s while granting them
access to finance that can allow them to grow.
Strictly enforce a payment policy to government suppliers of goods and services within 30 days
of delivery.
Reduce tax burden for low-income earners, expand individual tax bands, and set minimum
taxable income above KES 30,000.
Reduce VAT from 16% to 11% gradually and expand the tax base. The 16% VAT rate places a
significant burden on businesses and significantly drives up the cost of living for Kenyans.
Utilize deficit funding through the Central bank to raise an additional 20% revenue pegged on
KRA’s quarterly revenue target.
Strengthen the transmission signal of monetary policy to the real economy with financial
markets as a key economic tool for implementing fast changes in the economy.
Establish mobile money as a key avenue for monetary policy and enhance the policy structures
of mobile loan providers, unsecured interest rates, information sharing, data security,
advertising, and defaulters to avoid customer exploitation.

KANU

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