Build on the upbeat Kenya growth outlook – Business Daily
Economic growth concept. PHOTO | SHUTTERSTOCK
Having braced for the worst, it is a relief that the Kenyan economy is holding up in an election year as businesses take comfort from the peaceful conclusion of a tight presidential race.
A consensus growth outlook from 14 world-leading banks, consultancies and think tanks show economic activities could expand 5.5 percent this year, a 0.1 percentage-point rise over the month before the August 9 vote.
The projected improvement stands in stark contrast with the previous election years when economic growth slowed down as poll jitters grew.
This was the case in 2013 and 2017, when the economy decelerated to 3.82 percent and 3.80 percent, respectively.
The forecast growth for the year will, however, be softer than 7.5 percent in 2021, largely due to rising inflation, poor weather and weakening shilling in a net import economy.
But even as the global economists are upbeat in their projections, the new administration must hit the ground running to address the ongoing crisis on the soaring cost of living, mounting government debt, growing youth unemployment, below-average rainfall and weak shilling.
Failure to address these and the lingering worries about a lasting political settlement will dampen these prospects and the economy will lose its momentum.
The new government must also diversify the economy by supporting manufacturing, services and ICT sectors to create more jobs, thereby reducing the risk the economy is exposed to, such as climate change, pandemics and other external shocks.
