WB projects 4.5pc growth for the economy this year
Lewis Njoka @LewisNjoka
World Bank projects that Kenya’s economy will grow by 4.5 per cent this year saying there is elevated uncertainty over near term economic outlook. The growth will be followed by a 4.7 per cent growth in 2022 and 5.8 per cent growth in 2023.
According to the Bretton Woods institution, the economic growth this year, however, will be uneven with sectors that depend direct human contact, such as retail and tourism continuing to bear the brunt of the pandemic.
Agriculture and manufacturing on the other hand are expected to continue with the current impressive recovery despite manufacturing having been hit hard last year.
“This is a recovery that’s gonna be uneven, that will feel very different depending on which part of the economy one’s job is located in,” said Alex Sienaert, a senior economist at the World Bank Kenya office.
He said the elevated uncertainty is partly due to the unpredictable nature of the Covid-19 pandemic especially with new variants such as Delta emerging. Sienaert spoke yesterday during a virtual event to release the Kenya Economic update.
Speaking during the same event, World Bank Country Director, Keith Hansen, said the economy has staged a partial recovery from a large shock experienced last year.
He said future outlook hinges on how vaccination effort progresses and the overall course of the pandemic, which is largely unpredictable.
“The recovery is partial one thus far and the pandemic clearly is still heavily affecting some sectors as well as the overall economic recovery,” Hansen said.
“We are still in a very fluid situation and this is in large part due to the large gaps in vaccination coverage across countries,” he added.
He called on policy makers to prioritise vaccination, response to new developments in pandemic containment, safeguarding economic developments and furthering medium term priorities such as fiscal consolidation and debt management.
The bank also warned that Kenya has a growing jobs and labour force challenge with productivity growth having slowed and more people going into self employment since 2015.
In the next 10 years, Kenya’s largest youth cohort will attain working age with about a million youths entering the job market every year, a huge challenge for jobs to keep up.
“What is clear, even before thinking how Covid-19 has set back growth is that there was and remains a need to re-accelerate economic transformation in such a way to generate more good jobs,” Hansen said.
He said there was a need to improve on the quality of healthcare, education, and growing opportunities to help drive inclusive growth.
