Kenya Roundup: Economic growth, tax hikes, building collapse, airway debts
Economic growth projections
Kenya's economy is expected to grow 5.5% in 2024 and 2025, according to Finance Minister Njuguna Ndung'u. This announcement was made during the presentation of the country's 2024/25 budget to parliament. The budget was accompanied by the Finance Bill 2024, a separate law outlining revenue-raising proposals which many critics said could cripple sectors including financial and internet services, Monitor reports.
Airways debt
The Kenyan government repaid $135 million of Kenya Airways' debt in the third quarter of the 2023/24 financial year, CH-Aviation reports. The debt, which decreased to $766.4 million, was converted into external public debt, with the National Treasury becoming the primary debtor. Kenya Airways is required to provide a report on its turnaround strategy and financial recovery. The debt repayment is seen as a positive step toward attracting strategic investors and is integral to Kenya's programme with the International Monetary Fund. The debt was initially provided by Citibank and JP Morgan Chase Bank in 2017 and was taken out to finance aircraft purchases.
Sudan-Kenya talks
South Sudan's success in talks with holdout groups in Kenya has been seen as a potential influence for peaceful resolution of the conflict in Sudan. The government is committed to peaceful means through dialogue and believes the talks in Kenya signify a positive gesture for peace in the region. The Sudan Tribune reports that ceasefire talks on humanitarian issues in Sudan will resume after consultations between the parties have been concluded and approved by the principal leaders. Former Kenyan army commander Lazarus Sumbeiywo is mediating the peace talks.
Building collapse
A four-storey building collapsed in Nairobi, trapping five people inside. According to Kenyans.co.ke, two casualties were rescued and given first aid before being taken to the hospital. A multi-agency rescue operation is ongoing, with previous collapses in the area reported.
New tax hikes
Kenya is set to present a record budget with new tax hikes, aiming to fill the government's cash-strapped coffers. The proposed finance bill has drawn sharp criticism for its tax increases, which are expected to hit the financial services, manufacturing, and retail sectors. According to France 24, opposition leader Raila Odinga has described the new taxes as "insensitive as they are callous" and warned of further pain for the poor. Despite concerns about the impact of the tax hikes on the economy, the bill is expected to pass due to the government's large parliamentary majority. Kenya's total public debt is around 70 percent of GDP, with the IMF recently agreeing to provide additional funding.
