Resource information
Kenya will need to navigate through
another economic storm in 2011. This will reduce growth to a
projected 4.8 percent, which is still substantially higher
than the average of the last decade. The decade started on a
bullish note for Kenya. In 2010, growth was higher than
expected at 5.6 percent. If growth accelerated to 6 percent,
Kenya could reach Middle Income Country status by 2019.
Kenya is at the threshold of a major demographic transition
and is urbanizing rapidly. Each year, Kenya will continue to
grow by more than one million people, who will live longer,
be better educated, and increasingly live in cities. This
social and economic transformation needs to be managed well
to catalyze its development impact. This report recommends
that in order for Kenya to continue to prosper in 2011 it
will need to maintain macroeconomic stability, and contain
inflation and further increases in debt. This entails
tighter monetary policies and a reduction of the fiscal
deficit. If there is a need for additional expenditures in
response to external shocks, reallocations seem to be the
most appropriate response. Kenya can leverage its auspicious
location and its role as a hub for the larger East African
region by upgrading its infrastructure, creating a good
business environment, and continuing with region
integration. This would also position Kenya globally and
generate additional exports in services and manufacturing.
The report concludes that the best way to start making Kenya
more competitive is to strengthen its coastal hub and to
modernize the port of Mombasa.
