Kenya Faces Fiscal Risks and KSh 217.6B Capital Outflow as Parliament Debates Aviation Levy - August 2025

Kenya’s net capital outflows quadrupled to KSh 217.6 billion in 2023, with a significant amount moving into offshore financial centers like the Isle of Man, which absorbed nearly a quarter of the transfers. This occurred despite a 28.8% decrease in foreign inflows. Treasury Cabinet Secretary John Mbadi has warned that these escalating fiscal pressures, along with climate vulnerabilities, could undermine the nation's projected economic growth of 5.3 percent. Mbadi noted these risks threaten to derail an otherwise promising recovery. In a related fiscal matter, Parliament is debating the Air Passenger Service Charge (Amendment) Bill, 2025, which would alter how proceeds from the aviation levy are distributed to include the Tourism Fund and the Kenya Meteorological Service Authority.