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Discussion Starter · #1 ·
The World Bank forecast on Thursday that Kenya's economy will grow by between 5.3-6.0 percent annually over the next two years and raised its projection for 2010 by almost a full percentage point to 4.9 percent.
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A strong performance in the agriculture sector is one of the reasons for Kenya's economic growth

A strong performance in the agriculture and manufacturing sectors, higher public investment in infrastructure and rising confidence since the adoption of a new constitution will underpin the economic rebound, the World Bank said in its biannual report.

"(Kenya's economy) could also be at a tipping point in the sense that it may have reached a critical threshold beyond which it may enter a period of sustained growth," the World Bank said in its Kenya Economic Update.

"Economic growth in 2011 could be 5.3 percent and might even reach 6 percent, approaching levels of growth last seen in 2004-07," the report said of east Africa's economic powerhouse.

However, the likelihood of shocks from political instability and drought conditions forecast for early 2011 may dampen the exuberant outlook in east Africa's biggest economy, it said.

Telecoms growth driver
Kenya will hold elections in 2012 after its last vote in 2007 disintegrated into violence that killed 1,300 people.

Its economic growth plummeted to 1.7 percent in 2008 due to a combination of that post-election chaos, the global financial crisis, drought and a food crisis.

It has been recovering since and the government sees expansion of at least 4.5 percent this year. In the past two months some officials have said it could exceed 5 percent.

The World Bank said the farm sector, which accounts for almost a quarter of Kenya's economy, is projected to grow at 7.6 percent in 2010 on the back of good rains, which has in turn spurred higher activity in the manufacturing sector.

However, the real driver of exponential growth has been the mobile phone sector, the World Bank said. Handsets are not only tools for making calls and accessing the Internet, but have through innovation evolved to be saving accounts as well.

Without the investment in information communication technology, Kenya's economy would have expanded by only 2.8 percent over 2000-2009, compared with the actual 3.7 percent, the Bank said.

By mid-2010, there were 21 million active mobile phone users in Kenya and the World Bank projects 15 million will be using money transfer services offered by all four operators in the country by the end of this year.

The sector has grown by an average 20 percent annually since 2000, outshining all other sectors.

"Mobile money has the potential to become a game changer for the economy," the document said.

Reuters
 

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Discussion Starter · #5 ·
This is more realistic than the 10% being talked about by the Kenyan Finance ministers. Its a shame because before the election I though Kenya would have maybe been able to achieve at least 8% growth by now. What I always liked about Kenyas growth was that it was relatively broad-based.

The fact that the agricultural sector has done so well just because of good rains also shows that irrigation needs to be expanded massively.
 

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for a while now i have been saying that kenya's economy is growing faster and better than most people think.

understably most people are still focusing of the chaos in 2008 but for some of us close observers know that kenya has almost overcome those chaos. there are only big two tests remaining for kenya to overcome, implementing the new constitution and a peaceful 2012 elections.one thing for sure is that this is not the kenya from 2yrs ago. kenya as a country has learned alot from the 2008 chaos and substantially matured


after 2012 tourism will keep growing, alot of rural roads-hospitals-schools(driven by the new devolved govt), lamu port project and energy projects will be build. corruption will decrease substantially(thank God for the new constitution), agriculture will improve(because of the newly created counties and land laws) East Africa ICT resides in kenya nuff said, the real estate sector has been and will keep booming for a while. the blue chip companies in kenya are all expected to steadily keep growing thanks to the EAC. atleast kenyans are optimistic about the future which is really good for the country. alot of hard work for kenyans to do but atleast we are heading in the right direction. long may it continue.

if kenya can successfully implement the new constitution and have peaceful 2012 kenya will grow to heights only reseved for a few countries in africa. i cannot stress enough just how important it is for kenya to get those two things right or else the whole country will be plunged back to the dark ages with the chances of recovery being very minimal. the future of this country right now depends on those two things especially implementing the new constitution. it is imperative kenya gets thats right because it is the new foundation of kenya and if we screw up that then the whole house of kenya will be screwed up. we screwed up the first constituion from the mid '60s to mid '70s till today kenya is still suffering but recovering from that. we got it wrong once we simply cant affort to get it wrong twice

The good thing about kenya is that kenya's economic growth is usually broad based not just one sector of the economy. my only worry is that kenya relies WAAAAY too much on the rain patterns. it beats me why untill just recently kenya has never bothered to seriously invest in irrigation. if today a drought came to kenya(God please do not let this happen again) the economy would at best grow at a rate of 4% or less because not only agriculture but also energy and to some degree tourism depend on the rain patterns. that is three of the biggest drivers of kenya's economy.

i also hope that ETHIOPIA TZ and UG keep booming because IMO i always think that kenya would be better off with those countries booming as much as those countries are better off when kenya is booming. can you imagine the economic juggernaut that will be created when we start seeing trucks, railwaylines, planes, powerlines and pipelines criss crossing kenya-ethiopia-TZ-UG trading locally manufactured goods, raw materials and services??? that best part is that athough very very far but those nations are moving towards that reality
 

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This is more realistic than the 10% being talked about by the Kenyan Finance ministers. Its a shame because before the election I though Kenya would have maybe been able to achieve at least 8% growth by now. What I always liked about Kenyas growth was that it was relatively broad-based.

The fact that the agricultural sector has done so well just because of good rains also shows that irrigation needs to be expanded massively.
When did they ever say that growth was 10%?
 

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Discussion Starter · #8 ·
When did they ever say that growth was 10%?
they said it last month.

both Kenyan and Nigerian finance ministers predicted 10% growth for their respective countries within 2 years time. I wouldnt be surprised if Kenya hit 10% growth but not till at least 5 years time. There is still major infrastructural problems that need to be resolved, particularly pertaining to electricity supply and distribution. When will the Lamu port be ready?
 

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http://www.standardmedia.co.ke/InsidePage.php?id=2000020061&cid=14

Kenya economy to grow at 5pc, Uhuru tells World BankPublished on 11/10/2010
By James Anyanzwa

The Government has raised this year’s growth forecast from 4.5 per cent to 5 per cent.[/COLOR]Deputy prime minister and Minister for Finance, Uhuru Kenyatta, told an IMF and World Bank meeting in Washington DC that confidence had now been restored in Kenya after a peaceful referendum vote for the new constitutional dispensation.

Uhuru said he expects Kenyan growth to reach 5 per cent this year, from an earlier forecast of 4.5 per cent, owing to a strong performance in the first two quarters, with promising signs in tourism, agriculture and manufacturing sectors, driven by the private sector

"We are strongly and firmly on the path that growth must be private sector led," said Uhuru.

He said the current recruitment of contract teachers is not only meant to create employment, but also to have a multiply effect on growth levels through increased consumption.

"This will ensure a steady return to the kind of pre-crisis levels of growth," he said.

Uhuru said although Kenya is not yet out of the woods, it is heading in the right direction.

He said the country is faced with challenges on food security, but these will be addressed with a number of stimulus programmes that have been instituted to deal with the social sector of the economy.

The economy expanded by 5.4 per cent in the second quarter of this year, compared to a growth of 0.9 per cent in the same period last year, mainly driven by agriculture, construction, manufacturing and financial sectors. The four sectors accounted for approximately 60 per cent of the GDP growth.

The performance was realised in an environment of relatively low interest rates, low inflation, increased production of cheaper electricity, and better prospects in agriculture sector. Consequently, the half-year GDP estimate stood at 5.2 per cent compared to the same period last year.
 
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