NAIROBI, Kenya, May 11 – The World Bank says the Kenyan economy needs to maintain an annual growth rate of six percent if the country is to attain middle-income status by 2020.
World Bank Country Director Johannes Zutt says that while the economy has been growing at an average 3.7 percent over the last 10 years, the government needs to create economic stability to ensure growth is not eroded.
Mr Zutt said if Kenya was to remain on the same upward trajectory, then macroeconomic stability would be required to achieve middle-income status, ahead of the 2030 deadline set out in the Vision 2030 blueprint.
"The economy would need to grow by six percent per annum on average from this year through to 2020 to attain a per capita income of $1000 (Sh85,000)," Mr Zutt said, adding that the country was currently on an average of $750 (Sh64,000).
While underscoring that the target was attainable, Mr Zutt was aware there are a number of shocks facing the country that the government would need to address if it was to attain such growth.
He was quick to point out that the economy has on four occasions dropped sharply on election years, a factor the country needed to be wary of.
"Political leaders in Kenya need to remain focused on what is necessary for the economy to grow even when they are in the middle of a campaign to achieve economic and political maturity to support the strong economic growth," he said.
However, a myriad of local and global economic challenges are seeing economists become jittery over growth prospects, with some lowering previous growth projections.
British American Asset Mangers and Standard Bank have both estimated the economy to grow at between 4.3 percent and five percent from earlier estimates of between 5.5 and six percent.
The World Bank is scheduled to release its economic update in three weeks, with Mr Zutt saying it had also revised its earlier projections.
"I do not want to say what I will say in three weeks time bit it is clear that there is a lot of pressure on the economy that also needs to be addressed," he said.
Accelerating inflation, high fuel prices and a weakening shilling have hit the economy, which threaten to disrupt high economic growth.
Mr Zutt was however confident that the economy had the capability to weather the shocks, given its resilience after the combined effects of the post election violence and the global financial crisis.
"The experience we have of how the government and the economy recovered during that trying period implies that the Kenyan government can overcome the challenges," he said.
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