APRM • SECOND COUNTRY REVIEW REPORT OF THE REPUBLIC OF KENYA Figure 4: Consumer price Index (CPI) - Inflation rate (%) for Kenya, Tanzania and Uganda, 2011-2015 20 Inflation rate (%) 15 10 5 0 2011 2012 2013 2014 2015 Year • Uganda Tanzania Kenya The national government’s fiscal deficit is largely manageable, below 6% of GDP, but the increased expenditure responsibilities arising from the ongoing process of devolution of government responsibilities pose fiscal risks. The fast-track implementation of devolution has introduced strains in the government’s cash management, which will need to be managed. Therefore, fiscal discipline is required; Figure 5: Kenya: National government fiscal operations (% of GDP): 2012-2016 30 25 20 15 27.2 25.4 24.8 20.5 19.2 18.8 26.4 20.5 10 5 0 -5 -10 -4.7 -5.2 2011/13 2013/14 Total Revenue -5.7 2014/15 Total Expenditure -5.4 2015/16 Budget Deficit Source: IMF (2014), Country Report No. 14/302 • The roll out of devolution in line with the 2010 Constitution provides an opportunity to positively impact on social welfare across the countries, especially reducing poverty, and also to foster improvements in the delivery of key services. However, the extent | 142 |