Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-02-19 00:59:23
The African Development Bank (AfDB) has recently released its Macroeconomic Performance and Outlook for 2024 report, which includes Kenya as one of the African countries expected to experience economic growth in the coming year. The report highlights various factors contributing to Kenya’s improved economic performance, such as increased public investment in key growth sectors like manufacturing and services. Additionally, substantial capital input in critical public infrastructure, including electricity, transport, and logistics networks, is expected to further drive Kenya’s economic growth.
AfDB’s report projects that Kenya will record a 5.4% growth in 2024, based on the assessed factors. Other African countries expected to experience positive growth include Burundi, Cote d’Ivoire, Djibouti, Ethiopia, Rwanda, Tanzania, and Uganda. The report attributes Kenya’s higher growth in Gross Domestic Product (GDP) in 2023 to the strong recovery of the agriculture industry.
The 2024 Budget Policy Statement released by the National Treasury also supports the projection of Kenya’s economic expansion, with anticipated growth of 5.5% in 2024 from 4.8% in 2022. Treasury Cabinet Secretary Njuguna Ndung’u emphasized that this growth outlook would be supported by broad-based private sector growth, continued robust performance of the services sectors, the rebound in agriculture, and the ongoing implementation of policy measures to boost economic activity in priority sectors.
However, the AfDB report raises some challenges that Kenya may face in the future. The removal of fuel subsidies in the country led to social unrest, a common theme across several African nations. Additionally, the rising debt burden is seen as a potential obstacle that could affect businesses and increase the prices of household items. In 2024, Kenya is set to repay a USD 2 billion Eurobond maturing in June, with AfDB projecting total loan repayments of about Ksh707.5 billion.
The report also points out that African countries are expected to spend around Ksh7.6 trillion (USD74 billion) on debt service in 2024, a significant increase from Ksh2.4 trillion (USD17 billion) in 2010. Furthermore, the challenge of inflation, which is also being experienced in Egypt and South Africa, may lead to an increase in food prices and deteriorating business conditions.
To guarantee continued economic growth, AfDB offers several recommendations, including tackling persistent inflation, addressing tax burdens, and reforming the current global financial aid architecture to better fit the financing needs of African countries.
In conclusion, while Kenya is anticipated to experience economic growth in 2024, it is important to address and navigate the potential challenges highlighted in the AfDB report to ensure sustainable and inclusive economic development.
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