Industry

Kenya forecasts economy to grow by 7 pct in 2021

Kenya’s economy is expected to grow by 7.0 percent in 2021 on account of the resumption of international trade, strategic investments in the country’s development priority areas, Ukur Yatani, Cabinet Secretary for the National Treasury said in a statement issued in Nairobi on Wednesday evening.

Ukur Yatani said the economy which grew by 0.6 percent in 2020 due to the triple threats of COVID-19, locust invasion and floods will also be buoyed by stable inflation, interest and forex rates as well as growth in private sector lending and the credit guarantee scheme for small and medium enterprises.

“The agricultural sector’s strong performance, alongside the government’s rapid deployment of the Economic Stimulus Programme coupled with tax reliefs, went a long way in driving the resilient economic performance,” Yatani said in the statement after holding talks with Abebe Selassie, Director of the Africa Department at the International Monetary Fund (IMF).

The World Bank has predicted Kenya’s economy to grow at 6.9 percent in 2021, saying continued support from lenders in terms of public health interventions and support to the private sector are likely to spur Kenya’s strong economic growth.

Yatani said Kenya’s tourism, trade, transport, educational and manufacturing sectors were adversely affected by COVID-19, the locust invasion as well floods in 2020, but the country managed nonetheless to register a growth of 0.6 percent on the back of a strong performance by the agricultural sector as a result of good rainfall.

He said the budget deficit for 2020/21 is at 8.7 percent of Gross Domestic Product (GDP), but will contract to 7.5 percent of GDP in 2021/22 and settle at 3.6 percent of GDP. This, the Kenyan official said, will be on the back of a solid fiscal consolidation effort pegged on raising revenue; reducing waste and inefficiency; and ring-fencing development spending.

Source: Bangladesh Sangbad Sangstha (BSS)