Ruto’s policy reforms can stimulate early economic growth, quick wins – Business Daily
President William Ruto addresses Kenyans after he took the oath of office at Moi International Sports Centre, Kasarani, on September 13, 2022. PHOTO | JEFF ANGOTE | NMG
The accession of William Ruto to Kenya’s presidency this week presents Kenya with a fresh opportunity to remodel and stimulate socio-economic landscapes of this great nation. In his inaugural speech, the President outlined quite a transformational agenda targeting cleanups and reforms of what has not worked.
His agenda appears mainly focused on policy, institutional, and governance improvements to drive socioeconomic changes. This approach can deliver early economic results without necessarily requiring huge budgets, especially now that the Treasury is low on funds.
Tax reforms appear to be an area that will be targeted for major review by the new government to maximise revenue collection while addressing a number of tax “nuisances” that may be impeding economic growth and by extension limiting potential for increased tax revenues.
Tax collection-friendly methods were mentioned by the President, which means the KRA developing effective PR methods for those unable or unwilling to pay taxes. This is indeed a very tricky terrain considering Kenya’s high incidence of tax evasion and dishonesty.
Over the past few years, the KRA has systematically increased tax revenues, which gives credence to the fact that the country can indeed over time fund its development budgets with own tax revenues with reduced recourse to expensive debts.
The caveat, of course, is that every qualified taxpayer pays, and that every shilling collected is fully accounted for in expenditure by eliminating leakages through inefficiencies and dishonesty. This is why tax reforms should be undertaken simultaneously with a review of financial governance systems.
President Ruto announced a quick rescue plan for agriculture with affordable fertilisers at nearly half prices, a very welcome and timely action considering the coming short rains planting season. The President acknowledged responsibility by counties to revive agriculture with appropriate incremental funding from the national government.
Serious reforms in agriculture commenced in 2020, but momentum is what is now required to achieve sustainable food security, more jobs, and increased capacity for export crops and agro-processing.
The other growth area that the President is targeting for early attention is the SMEs sector, which will prompt creation of a dedicated Ministry of Co-operatives to streamline, among others, access to credit.
As the new government configures long-term funding for development projects, quick wins not requiring heavy funding can be achieved through early policy reforms, many of which were enumerated by the President.
Kenyans can only bestow the new government with goodwill and support while expecting early delivery on their expectations.
George Wachira is a petroleum consultant, [email protected]