Kenya’s economy will expand by 5.7 per cent this year buoyed by a stable political environment, higher infrastructural spending, increased foreign investments and consumption by the growing middle, class rating agency Moody’s has said.
Moody’s projection is slightly lower than the 5.9 per cent estimated by the Treasury.
“We forecast Kenyan GDP growth of 5.7 per cent in 2016 and 5.9 per cent in 2017. This significantly exceeds forecast GDP weighted growth for commodity exporting countries in sub-Saharan Africa of around 3.3 per cent for 2016,” said Moody’s.
The stable political environment has seen foreign investors inject more cash in the economy with Nairobi receiving the highest foreign direct investment (FDI) of any African city in 2015, overtaking South Africa’s Johannesburg. Overall Kenya attracted 12.6 per cent of FDI flows into Africa, second only to South Africa at 17.1 per cent.
Tourism is expected to rebound following improved security and aggressive marketing by the government further supporting economic expansion.
Moody’s singles out political instability around the August 2017 general elections as a major risk the country has to deal with.
Kenya economy has benefited from huge infrastructural projects such as the Chinese funded Standard Gauge Railway and expansion of the road network which are still ongoing.
The rating agency noted Kenya’s diverse economy had sheltered it from the adverse effects being felt by other African states that are heavily reliant on exporting commodity.
