World Bank vouches for Kenya’s economy bouncing back

A rebound in the agricultural sector due to the ongoing rains and the stabilizing of the political temperature will accelerate Kenya’s economic growth to 5.5 percent in 2018 and 6.1 percent by 2022, according to the World Bank.

Kenya’s economic growth hit a five year low of 4.8 percent in 2017 due to poor rains, slowdown in credit growth to the private sector and election induced uncertainty.

While giving an economic update on Kenya in a Nairobi hotel Wednesday, a senior economist at the World Bank Allan Dennis said a rebound was expected in the agriculture sector which was going to impact heavily on the achievement of one of the big four agenda that is food security.

“The government has invested enough in the agricultural sector and what it needs to do now is to address the wastages of food products after they are produced by farmers by enhancing market linkages,” said Dennis.

He explained that support from both the private and public sector was important in the achievement of the big four agenda and policy reforms would play a catalytic role in incentivizing the private sector resources.

Ministry of Industrialization Principal Secretary (PS) Ms. Betty Maina said that the government was very keen on manufacturing as it would support the other three of the big four agenda.

“Manufacturing supports other sectors like fighting poverty through job creation, production of cheap building materials for housing, equipment and medication for the universal health care among other,” explained Ms. Maina.

She outlined that the government planned to create 1.2 million jobs in the manufacturing sector by increasing investment in labour intensive products like textile and leather and they have already begun to work on the Kenania leather works in Athi-River.

“The government is also looking at increasing the manufacturing sector contributory percentage to the Gross Domestic Product (GDP) from nine percent to 15 percent by 2022 and that is a very ambitious plan but the focus is really to increase the output in the sector,” said the PS.

Kenya Private Sector Alliance (KEPSA) CEO Ms. Carole Kariuki said that the economy is showing signs of recovery going by the Stanbic management purchasing index which by March this year had grown to 54.4 up from 34.4 points last year which was very exciting news.

“Many investors held back waiting for the elections to be over and now we are seeing even the international investors streaming in so it’s going to be a vibrant year,” said Ms. Kariuki.

On the issue of capping of interest rates she said, “The issue of credit cannot only be narrowed on the issue of interest capping. It is one of the key drivers and we are looking at the revision of it to see how best it can work for the private sector but there are other issues like availability to the Small and Medium Enterprises (SME’s) that needs to be addressed.”

“We pitched to the president the idea of a Biashara bank for small businesses and we are seeing a movement towards that by the funding institutions in government and creating that space,” she explained.

Ms. Kariuki said that the handshake between President Uhuru Kenyatta and Raila Odinga has been good in that the private sector operate in a more stable political environment so just that silence in the political front has allowed the private sector to flourish and they look forward to a quieter political atmosphere in the next coming years.

  

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