World Bank group offices. [Photo/Acqua]The past three years have been tough for private investors, the World Bank says.
Private sector investment has gone down even as the Government aggressively pumped money to improve roads, railways, ports network and the power sector, said the World Bank in its latest Kenya Economic Update.
This has had the effect of crowding out the private sector, as the Government borrowed at the expense of the private sector.
Share of GDP World Bank Chief Economist Allen Dennis said since 2013 the share of private sector investment as a share of GDP (gross domestic product) has been declining. However, public investment has been on the rise.
“I would like to see the private sector as the goose that lays the golden eggs,” said Allen, noting that it is the private sector that creates durable employment and revenues. “And it is the private sector that really moves this economy,” he added.
Private sector investment as a share of GDP declined from 1.6 per cent in 2014 to a low of -2.8 per cent in 2016, as the private sector grappled with headwinds including access to credit.
This, Allen said, compares badly to a fraction of 2.1 per cent in 2010 when the economy grew at 8.4 per cent.