Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

Kenyan economy to buoy the Sub Sahara

NAIROBI, Kenya, Sep 15 – Kenya is among Sub-Saharan Africa countries that are expected to make the largest contribution to the region’s economic growth in 2010 and 2011.

Economists from Standard Bank Group believe that the country’s economic prospects are favourable, buoyed by a stable macroeconomic environment, growth in the tourism sector and the heavy spending on infrastructure.

“Kenya’s prognosis is favourable for a variety of reasons. There are vibrant activities in infrastructure; good incomes are abetting consumer spending and of course inflation has been low which in itself a victory is because it alludes to higher real incomes,” stated the Group’s Chief Economist Goolam Ballim.

The economist argued that these developments not only support good performance in the short term, but also create grounds for faster and more sustainable growth in the future.

At a projected annual growth of five percent, Kenya like its neighbours in the region such as Sudan and Ethiopia are expected to remain the strongest growing economies in the region.

The economy is back on a growth trajectory and the government is optimistic that it will register a 5.2 percent growth in 2010 up from the projected four to 4.5 percent that has been forecasted.

But while the country is also riding on the wave of a new Constitution, Mr Ballim cautioned that this should be backed by good policies in order for the country to achieve optimal results.

“Clearly the developments surrounding the referendum are favourable but there needs to be perpetual, constructive political evolution in the market. The government needs to bring effect to good politics in the form of good policies and especially structural and micro economic reforms to ensure enduringly good growth,” he added.

The global economic environment which remains precarious and where a twin recession is expected, is not lost to the economist who was quick to point out that Kenya would be able to leverage on its trade with the emerging economies such as China, India and Brazil as well as its regional neighbours.

Advertisement. Scroll to continue reading.

This is especially the case with Europe which has traditionally been its largest trading partner but whose economy is fragile but does not pose a major threat to her growth.

“The idea that the recovery in that very wide region is patchy does present challenges to the Kenyan economy. It is comforting though that in the recent past you have good growth rates from select economies,” he pointed out.

The forecasted la Nina however poses a risk to the Gross Domestic Product given the fact that agriculture is still a backbone to the economy both in terms of food security and a threat to a spike in inflationary pressures.

“Rightly, the weather phenomenon does present itself as a fairly significant tail-risk to the Kenyan economy that can, through no fault of policy makers or businesses, serve as an impediment to faster economic performance in the near to medium term,” Mr Ballim pointed out.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...