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- Published on Friday, 08 January 2016 05:37
The World Bank expects Kenya’s economic growth to rise marginally to 5.7 per cent this year spurred by government infrastructure projects.
The bank forecasts that the economy will only pick up to 6.1 per cent growth in 2017 and 2018 as the standard gauge railway (SGR) and the Lamu Port come into operation.
Kenya’s economy continues to be fuelled by large infrastructure projects with some key formal private sector areas like manufacturing performing poorly.
“Despite pressure on the shilling, Kenya is expected to grow at a robust pace, supported by large scale infrastructure projects, including the expansion of the railway system, which should help boost domestic trade, and a new port,” the World Bank said in a new report, “Global Economic Prospects”, released Wednesday.
The bank estimates that Kenya’s economy expanded by 5.4 per cent last year which is below the 6 per cent it had predicted in January 2015. It had been expected that low oil prices and mega projects would rev up growth but the government in late 2015 blamed the El-Niño rains and high cost of credit for the slowdown.
The World Bank’s annual estimate of growth in 2015 compares to the 5.5 per cent average growth rate in the first nine months as reported by the Kenya National Bureau of Statistics, which is yet to release the full year numbers.
The Sh427 billion Mombasa-Nairobi SGR is expected to be completed in mid-June offering a faster and cheaper evacuation of cargo from Mombasa.
Construction of the first three berths of the Lamu Port as well as the new container terminal at the Mombasa port which is set to be completed this year are other projects set to spur growth.
Insecurity, however, remains a big challenge to growth with the World Bank noting that attacks by Somalia’s Al Shabaab had hurt tourism in 2015 leading to a high current account deficit.
Source: Business Daily Newspaper.
