Big Four Agenda and Stable Politics to Push Kenya’s GDP by 6.5%

A new report by Metropol Cooperation has shown that Kenya’s Gross Domestic Product (GDP) is set to grow by 6.5 percent in the 2019/20 financial year primarily as a result of President Kenyatta’s Big Four projects and stable politics.

The report, which also noted that the economy is benefiting from favorable weather throughout the year identified the government’s major projects which include Food Security and Universal Health Care as some of the drivers of the economy.

Others include affordable housing and manufacturing, which includes construction of 10 dams, irrigation potential of 50,000 hectares and the expected commissioning of Olkaria 5 and 6 by July 2019.

According to Sam Omukoko, Metropol’s Group Managing Director, the growth will greatly be established through fixed assets where Kenya is seen to invest more and attract investors.

“There’s has so far been political stability which is an added advantage to the country’s economy,” said Omukoko.

It has been projected that 2019 will be a busy year for the oil and gas sub-sector despite the initial forecast of a slowdown from 3.7 percent to 3.5 percent. There is a possibility of an increased oversupply deemed to last in the year due to increased shale oil production in the USA.

Metropol notes that the fiscal deficit may remain preeminent owing to demand on the completion in various projects such as the large water projects, roads, and communication under the big four agenda.

The Government’s insatiable appetite for lending will lead to restricted credit flow to the private sector. However, when the mobile platforms continue to expand then the cash flow to the private sector will rise.

Today, 40 percent of Kenyans rely on multiple lenders for cash with Safaricom’s newest entrant, Fuliza, projected to rise above 100 billion shilling in 2019 alone.

“The financial inclusion has risen to 85 percent. This means many Kenyans now access credit leading to increased debt in different lending platformers however the defaulters are currently below 2 percent,” said Omukoko.

The government is now under pressure as it looks to grow the economy by at least 8 percent as hoped by the report once it completes specific projects under the big four driving the economy.

Meanwhile, corruption in Kenya still proves as a dominant challenge affecting the country’s economy while the country’s political stability will attract investors.