Impacts of Kenyan Fiscal Policy and Tariff Elimination to the Kenyan Economy

抄録

This paper analyses the impacts of tariff elimination policy adjustments on the Kenyan government desires to implement the development agenda of Vision 2030.　This agenda aims to make Kenya a middle income rapidly industrialized economy by the year 2030 and offering its citizens a high quality life.　The 2009 social Accounting Matrix (SAM 2009) and the Kenya CGE model based on Hosoe et al. (2010) and Tokunaga et al. (2017) are used as a basic system with a static single country open economy model and households divided into two regions rural and urban.　Using the Kenya CGE model eight simulations evaluate the impacts of tariff abolition on the key production sectors of the economy.

The results of the study indicate the complete abolition of tariffs in the key production sectors greatly improves the economic welfare and increases household income.　However government revenue is reduced with increased imports in the agricultural sectors.　In conclusion the aforementioned policy of tariff abolition brings great welfare to Kenyan households.

JEL Classification: R13, F17, C68