Kenya faced with economic risks despite growth

A hawker going about his business in Nairobi. The BBI report has proposed to exempt young business owners from paying taxes for 7 years PHOTO: COURTESY.

Kenya is among 11 African countries that have experienced a 5.4% growth in economy according to a recent report by the World Bank.

Other countries are Burkina-Faso, Cote d’Ivoire, Ethiopia, Ghana, guinea, Guinea-Bissau, Mali, Rwanda, Senegal and Tanzania.

“Growth of the high-performing countries in the region (established and improved countries) was supported by higher aggregate demand (private consumption and public investment), higher commodity exports, and improved agricultural output.” Read the report

From 2015 to date Kenya has seen a huge share of investors among them USA, UK and notably China which continues to invest in big projects like road construction.

An economist, Julius Itero says Kenya should invest in technology just like her debtors the Chinese so that she does not depend on outside aid but stakeholders within.

“It is about creating jobs and consumption, with Chinese if you give them a task it is them who will take 80% of the work, we are not benefiting so it is best if we reverse and give them the 20%, we have resources. China has invested in education and technology we should do the same,” Julius said in an interview with Baraka FM.

Although Kenya is expected to still have robust economic activities it is faced with external and internal risks.

“Slower than projected growth in the euro area and China, which have strong trade and investment links with Sub-Saharan Africa, would adversely affect the region. A substantial slowdown in China could affect not only commodity prices and export demand, but also FDI flows.” Stated the report.

According to the World Bank report the inability of entrepreneurs to come up with new ideas is an internal risk.

“The allocation of talent in productive or rent-seeking activities has implications for the country’s output and productivity growth. Talented people in productive activities (entrepreneurs) tend to improve current production techniques,” read the report.

The report which comes annually was directed by Albert G. Zeufack, the chief economist for the Africa Region of the World Bank.