A person counting Kenyan money.[Photo/Softkenya]
Kenya’s economy is expected to rebound this year after suffering from bruises of political tension and drought in 2017.
In his early economic growth forecast, an ambitious Treasury Cabinet Secretary Henry Rotich put growth at six percent, which he predicted would move up to seven percent in the medium term.
The World Bank estimates that medium-term Gross Domestic Product (GDP) growth should hit 5.8 percent in 2018 and 6.1 percent in 2019, depending on the completion of ongoing infrastructure projects, the resolution of slow credit growth and the strengthening of the global economy and tourism.
Growth is expected to be driven by government priorities as outlined by President Uhuru Kenyatta during his Jamhuri Day speech last year. While placing heavy emphasis on the expansion of the manufacturing sector, the government will particularly focus on the blue economy, agro-processing, leather and textiles as special projects. This concentration will see local manufacturers expand the fishing industry sevenfold while a directive that defense forces procure all leather products locally will create high demand for hides and skins.
The government has moved to ensure the cost of off-peak power to heavy industry is reduced and boosted the war on counterfeit products. The cost of mortgages and construction materials will be reduced to spur the construction sector and boost the ability of Kenyans to own decent homes. Savannah Cement managing director Ronald Ndegwa says the government’s focus on the big four development agenda, particularly in the manufacturing sector, is already giving the sector confidence for accelerated growth.
“Already incentives such as the 50 percent power tariffs slash for night term production are providing us with the necessary impetus to anticipate growth,” he said. Rich Management chief executive Aly Khan Satchu agrees that the year after an election is usually followed by a meaningful rebound and expects GDP to improve.