Kenya: Delaying VAT Refunds Is Unjustified

opinion

The Government on Thursday announced a S1.58trillion (USD18billion) budget for Fiscal Year 2014/15 (July-June). The Cabinet Secretary said in his statement: "We forecast our economy to grow by 5.8 per cent and 6.4 per cent in 2014 and 2015 respectively." Given the cratering of two of the four $1b pillars of our economy [tourism and tea the other two being horticulture and floriculture], the 5.8 [er cent GDP call looks a very highball call to me.

My model has GDP at sub 5 per cent. The new insecurity normal has sent confidence indicators to multi-year lows and domestic confidence needs some repairing. Interestingly, the budget typically [well at least for the 5 Years] overestimates revenue collection and we have to build in an undershoot of spending.

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