Appearing before the Committee was the Governor of the Central Bank of Kenya, Dr. Kamau Thugge.
The Departmental Committee on Finance and National Planning conducted two pivotal sessions to dissect the intricacies of Kenya’s economic performance.
Dr. Kamau Thugge, the Governor of the Central Bank of Kenya, provided insights into the country’s foreign exchange market developments. The meeting was prompted by the Central Bank of Kenya’s indicative rate, which revealed a weakening Kenyan Shilling against the US Dollar, with a buying price of Ksh149.84 and a selling rate of Ksh150.04, averaging at Kshs. 149.94.
Dr. Thugge illuminated the lawmakers in the global context, highlighting the worldwide strengthening of the US Dollar due to policy tightening in major economies, affecting African currencies, including the Kenyan Shilling.
To bolster the Shilling, the Governor proposed a series of measures, encompassing interbank market reforms, enhanced forex inflows, improved sentiments around the Eurobond and debt issues, and narrowing the current account deficit through reduced imports and robust exports. He also emphasized the significance of strong remittances, diverse tourism, and market diversification.
The lawmakers have expressed grave concerns about the devaluation of the Kenyan Shilling and urged the Central Bank to swiftly devise protective measures. In response to queries, Dr. Thugge compared Kenya’s situation with neighboring East African countries, highlighting Uganda’s foreign exchange strategies and Tanzania’s thriving tourism industry.
Further, Dr. Thugge emphasized the implementation of medium to long-term measures to attract forex inflows, enhance competitiveness, encourage exports, diversify markets, facilitate trade, and curb speculative activities in forex trading.
Kenya Revenue Authority (KRA) presented the revenue collection performance for the 1st Quarter of the Financial Year 2023/2024 to the Committee. The Commissioner General, Mr. Humphrey Wattanga, revealed a positive growth rate of 88.1% in total revenue collection from July to September 2023. Domestic taxes boasted a performance rate of 90.3%, although customs and border control saw a decline to 84.0%, attributed to various challenges.
Mr. Wattanga elaborated on strategies such as tax amnesty, real-time tax collection, full e-Tims implementation, and integration with other Government agencies.
However, he highlighted obstacles like taxing the informal sector, high debt portfolio, pending bills, Treasury undertakings, and undervaluation of import cargo. Committee members inquired about the impact of newly recruited Revenue Field officers, the expansion of the tax base, and the hindrances posed by underfunding.
Committee Chairperson, Hon. Kuria Kimani MP (Molo), stressed the need for a nationwide tax education curriculum in collaboration with relevant Government agencies, aiming to sensitize all Kenyans on tax compliance. These sessions provided a comprehensive examination of Kenya’s economic challenges and opportunities, setting the stage for informed policy decisions and proactive strategies.
