Kenya among few countries that weathered 2015 economic storm

Kenya is among the few Sub-Saharan African countries that weathered the 2015 economic storm to record an impressive growth, according to a new survey.

The International Monetary Fund (IMF) in its latest Regional Economic Outlook Survey for Sub-Saharan Africa, showed that while the continent recorded its lowest growth in 15 years in 2015, Kenya and a host of other African countries shrugged off the turbulence to record impressive growth.

The global lender pegged the continent’s growth in 2015 at 3.5 per cent as it grappled with weak commodity prices, a tight external financing environment and drought. However, Kenya and a few other oil importers recorded growth of over five per cent, according to the Bretton Wood institution.

“In particular, most oil importers are faring much better with growth of five per cent or higher in countries such as Côte d’Ivoire, Kenya, Senegal, and many low-income countries. “These countries continue to benefit from infrastructure investment efforts and strong private consumption,” said IMF senior economist Monique Newiak.

National Treasury said in its Budget Summary for 2016/17 that the country’s gross domestic products (GDP), or the country’s total output, grew by 5.6 per cent in 2015, up from 5.3 per cent in 2014.

This growth was buoyed by increased output in agriculture, construction, finance and insurance, transport and storage, real estate, manufacturing and public administration. Treasury projects the economy to register even better growth and targets  six per cent.

On the other hand, the IMF predicts the continent’s free fall to continue, if nothing is done. The IMF projects slower growth of three per cent in Africa this year. This is a far-cry from the six per cent growth the continent registered a decade ago.

Hope for the continent lies in the region’s improved business environment and its favorable demographics which should bolsters its growth in the medium term. But for the continent to capitalise on these factors, Africa’s policymakers need to reset its policy. For commodity exporting countries, they need to contain fiscal deficits and build a sustainable tax base.