By Nicolas Nduati
The World Bank has warned that Kenya’s agriculture and manufacturing sectors have stagnated for the last eight years.
In the report by the World Bank new report by the World Bank on Kenya’s economic memorandum says the two sectors, agriculture and manufacturing have been overtaken by the services sector as the major contributor to economic growth.
According to the report Kenya’s business environment is not favorable for the manufacturing sector owing to high taxation and a decline in growth of the agriculture sector.
For a country that boasts of agriculture being the backbone of her economy and contributing 25% to the national GDP, little has been done by the government to improve fortunes in the sector.
The World Bank, however noted that some sub sectors within Agriculture and manufacturing such as horticulture and food production have prospered.
Agriculture’s contribution to the GDP has reduced from 26.6% in 2006 to 22% in 2014, with the government’s intervention through inhibitive policies to blame.
Though expansion in modern services such as financial intermediation and mobile communication to credit for the tremendous growth in the services sector, it has emerged that Kenya is not a hotbed of innovation with only a quarter of Kenyan firms spending on in-house innovations.
A cultural change has also been witnessed in the country over the time with financial savings in the country being at an all time low hence calling for a reformation in the savings and pension systems
All is not lost for Kenya as the silver lining could be seen in the reducing volatility as a result of peaceful election cycles, though implementation of public policies on poverty reduction is still wanting.