Kenya’s economy is expected to grow by 5.9 percent in 2016 driven by improved performance in the agriculture sector and tourism, and increased foreign direct investments said the World Bank on Monday.
The Kenya Economic Update (KEU): Beyond Resilience – Increasing Public Investment Efficiency, says the country’s positive forecast is driven by a vibrant services sector, enhanced construction, currency stability and low inflation, low fuel prices, a surge in remittances and a growing middle class characterized by rising incomes.
Overall, Kenya’s performance has outpaced the regional average for eight consecutive years, and the country remains a bright spot across Sub-Saharan Africa. Kenya experienced strong economic performance in 2015, and has exceeded the average growth for Sub-Saharan Africa countries consistently since 2009, the report notes.
This positive trend was reinforced by the latest World Bank Group’s Ease of Doing Business report where Kenya moved up to the 92nd spot compared to 113 in the previous year. Kenya is now among the top five economies in Sub-Saharan Africa where it is easiest to do business. This improvement in the country’s business climate is largely due to the implementation of reforms to ease the process of doing business.
The World Bank predicted that Kenya’s economy will grow by 6 percent in 2017 – also unchanged from its March update – and 6.1 percent in 2018.
However, the country remains vulnerable to both external and domestic risks ranging from adverse weather that could curtail agricultural growth, uncertainties around the 2017 elections that could unduly dampen investor confidence, to weaker than expected global demand which could subdue the country’s exports.