Cabinet Secretary John Mbadi highlights Kenya’s economic resilience amidst challenges, citing improved debt ratios and reduced inflation due to effective policies. The Central Bank has eased monetary policy, leading to lowered interest rates and improved credit availability, particularly for businesses. The government prioritizes resolving pending bills and ensuring economic benefits for all Kenyans, with a strong focus on collaboration for stability and growth.
John Mbadi, the Cabinet Secretary for National Treasury and Economic Planning, emphasized that Kenya’s economy has shown significant resilience amid various challenges, thanks largely to effective government policies and a varied economic structure. In a recent press briefing, he shared that the country’s debt-to-GDP ratio improved from 71.9% in June 2022 to 66.7% in June 2024, achieved through strategic tax adjustments and expenditure reductions.
The CS indicated that the present value of the debt-to-GDP ratio declined from 68.7% in 2023 to 63.0% in 2024 due to favorable exchange rate movements and fiscal discipline. He underscored the stability of macroeconomic indicators, particularly in the external sector. He also noted the Central Bank’s adjustments to monetary policy in response to inflation trends.
Monetary policy changes included a reduction in the Central Bank Rate (CBR) from 13% in August 2024 to 10.75% by February 2025, and a 100 basis point decrease in the Cash Reserve Ratio (CRR) to stimulate private sector credit growth. Correspondingly, interbank rates fell from 13.7% in January 2024 to 11.2% in January 2025, maintaining proximity to the CBR.
Treasury Bill rates also saw significant reductions: the 91-day rate decreased to 9.11% in February 2025 from 16.1%, while the 182-day and 364-day rates fell to 9.85% and below 11%, respectively. The decline in rates reflects the easing of monetary policy, leading to a recovery in credit availability for businesses.
Furthermore, Mbadi pointed out that inflation rates have notably decreased, from 9.6% in October 2022 to 3.3% in January 2025, due to government interventions in food and energy pricing and recent tax reforms. He reiterated the administration’s focus on eliminating the backlog of unpaid bills that adversely affect businesses, particularly Micro, Small, and Medium Enterprises (MSMEs).
The government remains committed to translating economic achievements into tangible benefits for all Kenyans. Dr. Chris Kiptoo, Principal Secretary, affirmed that Kenya’s GDP growth remains robust at around 5%, outperforming the global growth rate of 3% and sub-Saharan Africa’s 3.7%.
Dr. Kiptoo expressed optimism for continued economic performance, contingent on avoiding further shocks, and emphasized the need for Kenyan support in building a stable job-providing economy. James Muhati, another Principal Secretary, noted their responsibility for aligning economic plans with budgetary capabilities and the importance of data quality from the Kenyan National Bureau of Statistics (KNBS).
Overall, the Kenyan government is taking substantial steps to enhance economic resilience through strategic policymaking, adjustments in monetary policy, and proactive measures to ensure stability and growth. The ongoing focus on inflation reduction and support for the private sector highlights the government’s commitment to fostering a favorable economic environment for all citizens. Continued collaboration with stakeholders will contribute to sustained improvements in economic performance.
Original Source: www.kenyanews.go.ke
