Published: Fri, April 21, 2017
Business | By Max Garcia

Kenyan economy among the best but growth slow

Kenyan economy among the best but growth slow

"Growth is projected to rise to 2.6% in 2017 and 3.5% in 2018, largely driven by specific factors in the largest economies, which faced challenging macroeconomic conditions in 2016", the International Monetary Fund said in the latest edition of its World Economic Outlook report.

Among non-resource intensive countries, such as Ethiopia, Senegal, and Tanzania, growth is expected to remain generally solid this year, supported by domestic demand, it said.

World Bank chief economist for Africa Albert Zeufack said on Wednesday that although Public Private Partnerships are yet to take off in sub-Saharan Africa, they have the potential to play a big role in infrastructural development.

"The region's three largest economies - Angola, Nigeria, and South Africa - are projected to post only a modest rebound in growth following a sharp slowdown in 2016", it said.

GDP growth in countries whose economies depend less on extractive commodities should remain robust, underpinned by infrastructure investments, resilient services sector, and the recovery of agriculture production.

Punam Chuhan-Pole, World Bank Lead Economist and the author of the report also said, "With poverty rates still high, regaining the growth momentum is imperative".

The World Bank said sub-Saharan Africa experienced a slowdown in investment growth from almost 8 percent in 2014 to 0.6 percent in 2015, adding that this sluggish investment has coincided with a sharp deceleration in economic growth in Africa.

"The environment of weak economic growth comes at a time when the continent is in dire need of necessary reforms to boost investment and tackle poverty".

"We need to implement reforms that increase the productivity of African workers and create a stable macroeconomic environment".

"XL Africa aims to put a spotlight on the continent's growing digital economy by scouting for and supporting the most innovative tech start-ups", said Klaus Tilmes, Director of the Trade & Competitiveness Global Practice at the World Bank Group.

According to the new Africa's Pulse, a biannual analysis of African economies conducted by the World Bank, if inefficiencies are addressed, public and private investment in infrastructure could be a strategic tool for poverty reduction and economic development.

Tanzania, Kenya, Ivory Coast and Senegal are forecast to lift GDP by between 5-7 percent in 2017.

"This low growth rate was driven mainly by unfavourable external developments, with commodity prices remaining low, and hard domestic conditions", the report said.

Sub-Saharan Africa, according to the Pulse, still lags behind other developing regions in virtually all dimensions of infrastructure performance, although trends varied across key sectors.

On the domestic front, he said, risks to the current recovery stem from an inadequate pace of reforms, rising security threats, and political volatility ahead of elections in some countries.

Regional growth remains insufficient to raise per capita incomes. The region experienced a slowdown in investment growth from almost eight per cent in 2014 to 0.6 per cent in 2015.

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