The National Treasury Towers in Nairobi [Photo/businessdailyafrica.com]
Kenya's economy is the top-ranked economy in East Africa. However, the economy faces a number of threats as listed below.
Drought. Drought is the main threat to Kenya's economy. Tea and Coffee are the main exports from Kenya are largely affected by the long-term droughts in some parts of the country. Drought also causes livestock deaths causing low livestock production. The drought has raised food cost forcing low-income families to put more aside for family basic needs. The interest cap that was introduced in September 2016, caps loans at a rate of 4% which is above the Central Bank Rate and interest for savers cannot be less than 70% of the CBR. The move was meant to protect customers, but the IMF has claimed that it reduces access to credit and is drawing back economic growth. General elections. Many investors often choose to wait for elections to be concluded before launching investments. Local and foreign investors press pause buttons on their investments in a country and wait until elections are finished and the stability of the incoming administration has been established.
Corruption. Grafts in the private and public sector are among the major drawbacks in Kenya's economy. A number of scandals have been lately recorded for example the National Youth Service scandal that saw a number of individuals involved prosecuted with no success.
Terrorism and insecurity in Kenya is also a huge threat to Kenya’s important tourism industry which is the main source of economic growth in the country. Terrorism breeds fear in tourists lowering the number of tourists arriving in the Country.