NAIROBI, Thur Dec. 08 – World Bank has called on the Kenyan Government to prepare the economy to handle multiple challenges expected in 2012.

Speaking at a Kenya Economic Update meeting in Nairobi, World Bank Country Director Johhanes Zutt said Kenya will be hard pressed next year to deal with many challenges among them elections and economic shocks transmitted from the global economy. “2012 will be a defining moment for Kenya due to national elections, the establishment of a new system of devolved government and deteriorating global economic conditions,” said Zutt.

Zutt urged Kenyans to look at this moment us an opportunity to turn political and economical challenges into a foundation of a better a future, and called for good management of resources the service delivery are not going to suffer. “The Government has managed past economic challenges well, and can do so again. The key challenge for 2012 will be managing the political transition well to avoid the repeat of post election violence in 2008 and to ensure continued growth investment and job creation,” said Zutt.

According to the report which was released by the Kenya economic update 2012, it emerged that the country has been recording low growth in elections years. This year the country recorded a growth rate of 4.3 percent and it is expected to rise to 5 percent in 2012 if Kenya succeeds in managing risks and avoid currency controls that distort economic activity.

It is expected that the growth will be driven by services, tourism and recovery in agriculture. During the meeting it also emerged that there is an urgent need for Kenya to contain pressure by reining in inflation and suppressing growth in debt. “The economy is experiencing turbulence caused by external and internal factors. High food and fuel price, the recent drought in horn of Africa and euro crisis which have weakened Kenya’s external position this year,” said Zutt.

Zutt urged Kenya’s policy makers to create space necessary to deliver on the promise of devolution, while protecting public investment. World Bank’s Kenya lead economist Wolfang Fengler said that Kenya will only succeed economically if it balances its economy with stronger exports. “The problem remains that Kenya is still running on one engine, with high imports but weak exports,” said Fengler.  

The economic up date urges Kenyans to look for more diversified export base beyond tea, tourism and horticulture. Moreover it calls on Kenyan to continue improving its infrastructures so that it can exploit new markets.

At the same time Tourisim Minister Najib Balala said that it will not be easier to sustain the growth which has been experienced for the last four years unless there are more investmeents. “We have to invest more in market so as to be able to sustain the 17% growth which we have seen in tourism,” he said. The minister, who officially opened the forum, said that he is much worried about the next year’s general election, Alshabaab crisis and euro growth.

“There should be determination of looking the key areas in economy seriously, that is security, and infrastructure,” Balala said.






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