Kenya’s economy is likely to increase by 5.6 percent this year from an estimated 4.8 percent last year. Stanbic Bank economists on Thursday projected, citing a largely improved agricultural production and recovery in services sector for the upgrade.
According to Stanbic’s economist for East Africa Jibran Qureishi, the resumption of government expenditure on infrastructure development and continued recovery in the tourism sector will support growth immensely.
“We need to support small-scale farmers and invest heavily in irrigation. We shouldn’t be in a situation where when it doesn’t rain, we are in a reduced agricultural output situation again,” Mr. Qureishi said.
He added that agriculture accounts for nearly a third of gross domestic product (GDP).
The economy is thought to have expanded at the slowest pace last year since 2012 when it grew at 4.6 percent due to a biting drought that hit hard farming activities, prolonged electioneering that delayed investment decisions and a drop in credit growth to the private sector.
One of the focuses that President Uhuru Kenyatta has recently pledged to focus on is food security and focus on state resources in his last term in office, but the implementation strategy is yet clear.
Similar to Stanbic’s growth outlook is Barclays’ which on Tuesday projected a 5.5 percent growth this year and six percent next year, largely on better performance in agriculture, construction and tourism sectors. Treasury Cabinet Secretary Henry Rotich has forecast a growth of six percent this year citing similar reasons.
“We should start seeing, just like the upgrade of the Jomo Kenyatta International Airport has helped in opening up new routes like the New York which will bring in more high-end visitors, projects like SGR generating economic benefits from people using it,” Barclays Africa Group chief economist Jeff Gable said.
Stanbic, however, sees sluggish growth in credit to the private sector and budget cuts amid rising debt repayment obligations as downside risks to its growth outlook for Kenya.