Kenya intends to almost triple annual tax collection to $40.6 billion in five years, its President William Ruto said in an interview at the US-Africa Leaders Summit in Washington.
The president's statement comes as his country spends more than half of its tax revenue on debt payments.
“I am very confident that our debt situation is going to change significantly because we have begun to make the right decisions,” he pointed out.
Meanwhile, Kenyan officials announced plans last month to cut "non-priority expenditures," as well as to reduce borrowing in order to reduce the fiscal deficit.
In addition to the cost of paying off debts, combating the consequences of drought is another serious item of Kenya's budget expenditures. Kenya, along with other countries of East Africa, is currently facing severe water and food shortages due to one of the harshest droughts that the region has suffered in four decades.
In late November, Kenyans who serve in the country's defense forces offered to forgo one day of their pay every month in order to contribute to the drought relief fund. Additionally, the country's government has already called on people from Kenya's "food surplus counties" to contribute a share of their earnings to help the drought-affected areas.
Fiscal policy changes in Kenya come in light of a new financing agreement between the African country and the IMF on November 8. The international lender based in Washington is known for demanding that beneficiaries of its financial aid line up their government finances with neoliberal free-market practices, such as eliminating subsidies and regulations and reducing government's spending.
15 September 2022, 20:56 GMT
In September, Kenya’s government, following the IMF requirement from July 2022, ended fuel subsidies that had protected Kenyans from worldwide price hikes.