Kenya will experience a rapid economic growth in the next three years of around 6-7% as compared to 5.4% in 2014, a new report from the World Bank has revealed.
The report which is part of World Bank’s Kenya Economic Update (KEU) is in its 11th edition and attributes the growth to falling oil prices. Other growth contributors are continued investment in infrastructure, mainly in energy and the standard gauge railway.
The World Bank’s Country Director for Kenya Diarietou Gaye observed that Kenya has much potential in improving the economic standards through infrastructural investment and exports. “Kenya is emerging as one of Africa’s key growth centres with sound economic policies in place for future improvement. To sustain the momentum, Kenya needs to continue investing in infrastructure and jobs, improve its business climate, and boost it exports,” says Ms Gaye.
According to the report, the country’s expansive fiscal policy allowed it to finance major infrastructure projects without putting excessive pressure on domestic financing. “Kenya’s accommodative monetary policy stance has supported economic activities without triggering inflation or putting pressure on the exchange rate,” said John Randa, World Bank Group’s Senior Economist for Kenya and lead author of the report.
In order to achieve a productive economy the report suggests that Kenya implements the business reform agenda, completes reforms at the port of Mombasa, improves the efficiency of its massive infrastructural projects, strengthens governance, improves productivity, and continues to maintain macroeconomic stability.
“A strong manufacturing sector will create more employment, especially for young people in Kenya. This will also increase exports and reduce the country’s external vulnerability from a widening account deficit,” states the report.
The KEU is prepared by the World Bank in collaboration with stakeholders from the government especially the members of the Economic Roundtable who include the Ministry of Devolution and Planning, Ministry of Industrialization and Enterprise Development, Central Bank of Kenya, Kenya School of Monetary Studies, Kenya Vision 2030 Secretariat, Kenya Institute for Public Policy Research and Analysis, Kenya National Bureau of Statistics and the International Monetary Fund (IMF).