A report on relative ease with which citizens can achieve financial freedom on the rule of law and tax burden has ranked Kenya poorly in its 2022 index.

The World Economic Freedom Index by US-based think tank Heritage Foundation, Kenya’s 2022 economic freedom score is 52.6, making it the 138th freest in the 2022 Index.

“With score decreases in fiscal health and trade freedom edging out improvements in government integrity and business freedom, Kenya has recorded a 0.9-point overall loss of economic freedom since 2017 and is now lower in the “Mostly Unfree” category,” the US-based think tank said.

Kenya, however, ranked 28th among 47 countries in the sub-Saharan Africa region, and its overall score is below the regional and world averages.

This is a drop from the 54.9 points Kenya scored last year showing a deterioration in performance that started in 2017. Tax burden, government spending and fiscal health are the critical areas under the size of government that contributed to Kenya’s mediocre performance.

Property rights, judicial effectiveness and government integrity were the main issues under rule of law that weigh down Kenya’s economic freedom ranking. “Monetary freedom shows some strength, but the rule of law is generally weak,” said the Institute of Economic Affairs.

Key factors

The key factors that determine the index include business freedom, labour freedom, trade freedom, investment freedom and financial freedom.

A country has to score between 70-79 points in the index to be considered “mostly free” or between 80-100 to join the few “free” nations economically.

States that score 60 to 69 points are considered “moderately free”. Kenya scored 52.6 points. Of the 178 economies ranked in the index, five are considered free, and an additional 92 are at least ‘moderately free. Over 81 economies received scores below 60 and are rated ‘mostly unfree’ or ‘repressed,’” said the foundation.

Among major changes that have happened in the last few years in the financial and fiscal space include increases in taxes across the board.