By Ebi Kesiena
Kenya’s economic growth is projected to decelerate to five percent in 2024, following a strong performance in 2023, according to a World Bank report released on Wednesday.
The East African nation’s economy has been burdened by substantial public debt, rising inflation, and the introduction of various new taxes and levies by President William Ruto’s financially strapped administration.
In its report, the World Bank noted that Kenya’s real GDP growth accelerated to 5.6 percent in 2023, up from 4.9 percent in 2022, primarily driven by a recovery in the key agricultural sector due to improved weather conditions. Additionally, the tourism sector contributed to the robust economic performance last year.
However, the World Bank highlighted that Kenyan exports have significantly underperformed. The report stated, “The country has not diversified its products in recent years and has lost competitiveness in the markets to which it exported.”
READ ALSO: When Will Famine Be Declared In Sudan?
This report precedes the Kenyan government’s budget presentation to parliament on June 13. The government is proposing a 4.25-trillion-shilling ($32-billion) budget for the fiscal year ending June 30, 2025, an increase from the previous year’s 3.6 trillion shillings.
Kenyan authorities anticipate an average GDP growth rate of 5.2 percent between 2024 and 2026. The country’s total public debt stands at approximately 10 trillion shillings, or about 70 percent of GDP. Nonetheless, Keith Hansen, the World Bank country director for Kenya, praised Nairobi’s decision in February to partially repay a $2-billion Eurobond maturing later this month. Hansen remarked, “This move significantly eased the immediate liquidity constraints for the year, instilling a sense of calm in the markets.”
Despite these measures, the World Bank report emphasized the need for Kenya to address “climate-related vulnerabilities, particularly for agricultural exports.”
Earlier this year, Kenya and other parts of East Africa experienced severe torrential rains, resulting in several hundred deaths and thousands of displacements, which severely disrupted the critical agriculture sector.
