The Strategist

World Bank projects 6 to 7% growth for Kenya

03/09/2015 - 21:51

Thanks to the global oil price slump, Kenya is projected to be one of the speediest growing economies of Sub-Saharan Africa by a latest report published by the World Bank.

According to the latest Kenya Economic Update (KEU) by the World Bank, Kenya’s growth is estimated to go up from last year’s 5.4% to 6-7%  over the next three years.

The report noted that external and internal balances in the country are estimated to improve with the dropping oil prices. Public infrastructure investment, specifically in energy and standard gauge railways, is also expected to bolster growth in the medium term.

“Kenya is emerging as one of Africa’s key growth centers with sound economic policies in place for future improvement” said Diarietou Gaye, the World Bank’s Country Director for Kenya. He also noted that the country needs to continue investing in infrastructure and jobs, improve its business climate, and boost it exports.

The country’s fiscal policy has allowed it to finance major infrastructure projects without expecting high domestic financing, according to the report. “Kenya’s accommodative monetary policy stance has supported economic activities without triggering inflation or putting pressure on the exchange rate.” noted John Randa, World Bank Group’s Senior Economist for Kenya and lead author of the report.

Though the oil price slump has provided Kenya with an advantage, low demand for exports and overall declining production has widened the country’s current account deficit, the report notes, while suggesting that the country needs to improve productivity and the business environment.  Other highlighted key steps for the country includes fulfilling the business reform agenda, revamping the port of Mombasa amongst others.

Kenya is one of the promising economies in Sub-Saharan Africa currently with GDP of $55.24 billion in 2013. The country had been foreshadowed by Nigeria and Angola which were the top liquid fuels producer in the region.

World Bank projects 6 to 7% growth for Kenya