NAIROBI, Kenya, Jun 5 – Kenya’s economy is projected to grow by 4.2 percent in 2009 according to a recent survey dubbed “African Economic Outlook” conducted by the African Development Bank.
Speaking during the launch of the survey National Planning Minister Wycliffe Oparanya said, while such growth is attainable, Africa needed to consolidate its market to bolster trade in the region.
“We need each other more than the West needs us. We need to encourage corporation like in South America where African countries can look out for the best interests of each other,” the Minister said.
He highlighted the need for sound governance in African countries.
He said peace and political stability were key ingredients if the continent was to achieve economic growth in the face of hard economic times.
Dr Desire Vencatachellum, Lead Research Economist at ADB, said it was high time Kenya as well as all African countries accepted that the economic crisis had hit the continent \’ s shores.
“Initial effects will be felt in trade due to fall in commodity prices as well as reduced demand for products from the developed world,” Dr Desire said.
He placed the economic growth for Africa at 2.8 percent for 2009, less than half of what was predicted (5.7) before the start of the recession.
Dr Peter Ondiege Chief Research Economist at ADB highlighted the need for the government to increase its budgetary allocation, especially to infrastructure development and social services such as health and education with specific attention placed on the unemployed youth.
He said that was the only way to keep youth off mischief that could affect the country’s security , a key ingredient for economic growth.
Despite the projected growth, Kenya’s economy is still vulnerable due to account deficits, high debt levels, increasing fiscal deficits and declining foreign exchange reserves.
The report does, however, have Kenya better placed now than before, because of reorientation of trade towards emerging markets, prudent macroeconomic reforms and debt relief that will see the country weather the current economic slow down.