Nairobi, June 26, 2014 - Kenya's economy is expected to grow by 4.7 percent in 2014 and has the potential to achieve a higher growth rate of 5.0 percent in the next two years, says a new World Bank report published today.
The growth will be powered by aggregate demand, fueled by strong consumption and investment, according to the Kenya Economic Update for June 2014.
“Macroeconomic stability and credible policies have underpinned Kenya’s growth in the past and the economy remains fairly resilient” says Diarietou Gaye, World Bank Country Director for Kenya. “Increasing investments in infrastructure and human capital will strengthen prospects for higher growth and regional competitiveness.”
Under its new Country Partnership Strategy for Kenya (CPS), the World Bank Group will provide $4 billion over the next four years to enable Kenya to improve its potential for growth, create more jobs for the youth, build vital infrastructure, and devolve power to regional communities in order to end extreme poverty and share prosperity among all Kenyans.
The KEU, the tenth in a series issued bi-annually by the Bank, urges the government to address the emerging pressure on Gross Domestic Product (GDP) growth especially from drought, insecurity, fiscal expansion and implementation of devolution. Dealing with these challenges will be important for the economy to remain resilient, strengthening medium term prospects for better growth and shared prosperity.
"Kenya continues to achieve a broad based growth, with all sectors making a contribution to the GDP,” says John Randa, the Bank’s Senior Economist for Kenya and lead author of the report.
A key focus of the report is on achieving efficiency gains that will improve access and equity in the health sector. It says devolution has an opportunity to provide better healthcare to support Kenya's progression towards middle income status.
"Reforms have improved Kenya's healthcare system and the challenge now is to build on the devolved system of delivering health services to realize, the government's goal of universal health coverage," says G N V Ramana, the Bank’s Lead Health Specialist for Kenya.
The report highlights the health challenges facing Kenyans, including high maternal mortality, stunting among children and the burden of non-communicable diseases, and underlines the need to fast track strategies and evidence-based interventions for improving health outcomes, complemented with improvements in women's education, access to water and sanitation, roads and transport.
The Kenya Economic Update is produced by the Bank in partnership with Economic Round Table members, including the National Treasury, the Ministry of Devolution and Planning, the Ministry of Health, the Central Bank of Kenya, the Kenya National Bureau of Statistics, the Kenya Revenue Authority, the National Economic and Social Council, the Kenya Institute for Public Policy Research and Analysis, and the International Monetary Fund.