Consolidated Bank – 2016 post budget breakfast brief: Making sense of the figures
On Friday 17 June, 47 key customers from our medium to large corporate account holders convened at Serena hotel for a breakfast presentation on the budget. They were joined by personnel from the bank, including Heads of Departments, Relationship and Branch Managers.
Mr Nikhil Hira, a partner from our auditors Deloitte and Touché, led the seminar; at the macro-level, he focused on the emerging delineation in Africa, with countries in the East African region exhibiting robust growth when compared to the southern neighbours. For example, the IMF focuses Kenya’s GDP to grow 6.1 per cent in 2017, compared with 6.8 for Tanzania, 5.7 for Uganda and 7.0 for Ethiopia.
At the micro-level, the Government continues to invest heavily in infrastructure projects such as the Standard Gauge Railway, which should be operational before the 2017 elections, and the larger LAPSSET initiative with a longer timeframe. These will undoubtedly transform the way business is run in Kenya, along with the investments being made in energy production.
However, as noted by Mr Hira, this increased capital expenditure puts pressure on the Kenya Revenue Authority (KRA) to grow tax collection so as to fund the budget. Consequently, tax revenues have almost doubled from KSH 764 billion in 2012/2013 to KSH 1.37 trillion forecasted in 2016/2017.
Alongside infrastructure and energy, the Government continues boosting funding for Education, Healthcare and allocations to Counties.
This offers business opportunities at both levels of Governments for primary and support industries. For example, as geothermal energy production continues expanding in the Rift Valley region, there will be an immediate need for residential and related services (such as food and transportation) in the area.
Consolidated Bank continues to support our partners operating in these, and indeed all sectors of the economy. We continue developing products and services that ease their operations, living up to our mantra of Being Better with our customers.