Kenya is set to record a gross domestic product (GDP) growth of over 5 per cent this year. This is according to a newly released economic projection report. The gross domestic product (GDP) represents the total value of goods and services produced.
The report dubbed 2018 Global, Regional and Local Macro Economic Report was launched was launched by Barclays Africa Chief Economist Jeff Gable.
In 2017, Kenya’s GDP growth fell to 4.4 per cent from 5.6 per cent in 2016. Over the past nine years, the GDP has averaged at a growth rate of 5.5 per cent.
It is estimated that Kenya’s current growth of between 4 and per cent is not enough to fully pass down economic benefits. According to Aly Khan Satchu, the CEO of financial firm, Rich Management, Kenya currently needs a GDP growth of 7.5 per cent or higher.
The new projections by Barclays Africa, though, have come as a relief especially at a time when the country is recovering from an economic downturn that was occasioned by prolonged electioneering in 2017.
The report further pointed out that only 17 countries in Africa will record economic growths that are above 5 per cent this year.
Strikingly, Barclays Africa established a st of risks that may hinder the realization of these growths, including debt sustainability, infrastructure pay-offs, and fiscal re-balancing.
“For example, for every Sh. 3 that the government currently collects, Sh. 1 goes to servicing interest on debt,” Gable noted. This is echoed by Mr. Satchu who observes that the government needs to go slow on debts. “Yes, the government needs to slow down on its debt binge but has a window to slot the Eurobond market with a $2 billion issue and thereby stabilize the Now – and kick the can down the road.”
The report further projected an overall economic growth of 5.5 per cent for the country.