Kenyan economy now to grow by 5.5pc

March 1, 2012
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The PM listens to Tourism Minister Najib Balala/REBECCA NDUKU-PMPS
NAIROBI, Kenya, Mar 1 – The Kenyan government has revealed that the country’s economic growth rate is projected to expand by 5.5 percent in 2012 compared to an estimated 4.6 percent last year.

Prime Minister Raila Odinga said the growth would be achieved despite the challenges in the macroeconomic environment that have in turn made it less stable.

“Pressures on domestic prices resulted in a weaker shilling last year and although it has stabilised, it is at a cost of exceedingly high interest rates,” he said.

Speaking at the Kenyatta International Conference Centre where he chaired a Special Round Table meeting on the State of the Economy, the PM highlighted employment and productivity as major areas of concern, urging complete cooperation between all stakeholders and non-state actors to improve Kenya’s competitiveness in the region.

“I know that costs of energy in our country are too high, which hampers our competitiveness,” he admitted.

“We have huge potential in geothermal, which is about one third of the costs of diesel based emergency power so let’s find ways of accelerating its development,” he appealed.

As a way of reducing the high unemployment and poverty rates, he proposed the provision of high quality seeds and fertilisers to farmers at reasonable costs.

“We need to shift to irrigated agriculture. We must enhance value chains in agriculture, including much improved infrastructure to develop solutions based on new private-public partnerships,” he asserted.

The government he said had played its part by cushioning the poor and unemployed with the disbursement of Sh8 billion to provide emergency food needs and other services.

“The government has also reduced taxes on diesel and kerosene, while providing social protection that aims to cushion the poor and most vulnerable groups such as children and the elderly,” he emphasised.

Speaking on trade and investment, the PM disclosed that private investments are inadequate, producing a growth of only 10 percent with too much going into real estate instead of manufacturing.

“The reality is that as a country, our export earnings only cover a measly 40 percent of our foreign exchange needs, so expanding our export base on enhanced competitiveness deserves the utmost attention,” he declared.

He made it clear that regional integration is a reality that must be unequivocally supported as a critical part of the national agenda.

The PM urged forum participants to re-evaluate if their previous measures on Non-Tariff Barriers (NTB) such as inspection, licensing, e-registry, national single window system and the implementation of the East Africa Common market protocol are going far and deep enough.

“We must guard against what I will call ‘NTB Creep’, whereby as we are busy dismantling NTBs upfront, while others are happily bringing some back and introducing new ones through the back door,” he warned.

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