advertisement

Economy

Kenya to continue outperforming regional economies, says WB

Kenya's economy is expected to grow at 6.1 per cent both in 2018 and 2019. PHOTO | FILE
Kenya's economy is expected to grow at 6.1 per cent both in 2018 and 2019. PHOTO | FILE 

Kenya’s economy will continue to outperform Africa’s average in the next three years despite a looming drought and volatile electoral politics, World Bank (WB) says in its latest update.

The country’s growth is set to hit a six per cent this year, way above the sub-Saharan Africa’s 2.9 per cent, the Bank says. That gives Kenya the third fastest growth in eastern Africa, just behind Ethiopia’s 8.9 per cent and Tanzania 7.1 per cent.

The economy is expected to maintain the tempo, growing at 6.1 per cent both in 2018 and 2019.

By comparison, Uganda is projected to grow by 5.6 per cent, Rwanda’s by six per cent and Burundi’s growth is forecast at 2.5 per cent.

“Sub-Saharan African growth is expected to pick up modestly to 2.9 per cent in 2017 as the region continues to adjust to low commodity prices,” said the World Bank in its Global Economic Prospects report for 2017 released on Tuesday.

Kenya is headed for general elections in August. Election years in Kenya tend to dampen investor confidence as political temperatures rise. Past economic surveys show that uncertainty about the electoral outcomes are among the root causes of the economic slowdown.

The UN has also predicted prolonged drought in the early part of this year. The prevailing drought has mostly hit the northern counties of Turkana, Marsabit, Wajir and Mandera, setting up the country for emergency feeding programmes.

This even as the country received below average rainfall during the short rains period of October to December.

Latest statistical estimates from the International Monetary Fund’s (IMF) had predicted that Ethiopia’s economy would overtake Kenya’s buoyed by major investments in its infrastructure.

The Horn of Africa nation has experienced double-digit economic growth, averaging 10.8 per cent since 2005, which has mainly been underpinned by public-sector-led development.

While Kenya has also raised its public investments, including on big infrastructure projects, it remains significantly below that of Ethiopia.

The WB report shows growth in the sub-Saharan Africa is estimated to have slowed to 1.5 per cent in 2016, the weakest pace in over two decades, as commodity-exporting economies adjusted to low prices.

Kenya’s economy is projected to have grown by 5.9 per cent over that period.

advertisement