Nairobi, KENYA: Central Bank of Kenya CBK has expressed concern that the global economy risks undergoing a recession, if the United Kingdom UK pulls out of the European Union through the Brexit Referendum Polls.
“Brexit could strain the global economy as it would introduce a lot of uncertainty. Economic actors would be more unwilling to make decisions and this would affect investments,” said CBK Governor Dr. Patrick Njoroge.
Dr. Njoroge has said that in the short term, the market would experience turbulence in the financial markets.
“The global economy is weak. And it would not take much to push us into negative territory and keep us there for a period of time.” Added Njoroge.
Dr. Njoroge has given hope to the Kenyan economy explaining that this economy would not be immensely affected by the Brexit.
“Kenya has proven in the past that it is resilient. Although Kenya is part of the world economy it is not as connected to the UK economy as compared to other countries. We are mainly connected to the economies of the African region,” he explained.
“25% of our exports go to our EAC Partners. 40% goes to COMESA. In that sense the direction of our trade is more to the region,” he continued.
He added that if there was a chance that Kenya would be affected then it would be through indirect channels.
“Nevertheless we are in an interconnected world so Kenya could feel some effect. That notwithstanding we are still ready; we have enough foreign exchange reserves of $5.6 billion. We also have enough reserves in case of need in the IMF Precautionary Program, ” he said.