Facts and figures show economy is resilient

Alarmist newspaper reports published in recent days have suggested that the Kenyan economy is  on the verge of collapse, sliding into a meltdown or just about to tumble off a cliff.

Without any meaningful substantiation, the authors – donning a false aura of authority -  have illustrated a gloomy scenario where the country’s Kenya economy is assumed to have detoriated or at least stagnated.

But nothing could be further from the truth. Official indicators, as well as regional and international comparisons show that the economy is currently on a rather vibrant, and healthy footing.

All recent official reports show that the economy has been on a growth trajectory of more than double the global  and Sub-Saharan Africa annual average of  3-4 per cent. Kenya recorded a GDP growth rate of 6.3 per cent  in 2018-2019 against  the global average of 3.2 per cent in the same period, and this expansion trajectory is projected  to continue in the foreseable future.

The positive results and optimistic outlook is based on sound macroeconomic conditions.

The ongoing accelerated roll out of the Big Four enablers in Transport and Infrastructure, Energy, Affordable Housing, Universal Health Care and Education, among others, continue to remove bottle necks to boost productivity and  sustainable growth.

Labour and other inputs constitute over 60 per cent of costs of the capital intensive investments in infrastructure developments, and this translates into job opportunities for our young people, and business opportunities for suppliers, and,  inevitably, distribution of  incomes throughout the economy.

Sectors that  registered impressive growth in the Medium Term Planning (MTP2 2013-2018) include Agriculture (6.4  per cent in 2018), Transport and Storage at ( 8.0 per cent), manufacturing ( 7.7 per cent), Wholesale  and Retail Trade (7.4 per cent), Real Estate (7.0 per cent), Financial and Insurance (6.0 per cent), Construction ( 4.3 per cent) and Public Adminsitration and Defence ( (3.5 per cent).

The medium term growth prospects are anchored on continued, stable macroeconomic conditions and favourable external environment.

Other assumptions include continued implementation of the Big Four Agenda, continued stable political climate, increased private investments and the global environment.

The country keeps an eye on events in the global arena that have a direct bearing on  the Kenyan economic performance, including the trade wars between the American and Chinese economies.

For instance, reduced trade  in manufactured goods between US and China is bound to impact not just  Kenya but other countries as reduced demand for raw materials in China may trigger a chain reaction across the supply chain.

Experts project that the Kenyan economy will expand by 6.0 per cent in 2019,  and 6.5 per cent by 2020 boosted by consumer confidence and improved business as completion of many ongoing infrastructure projects begin to bear fruits in form of increased and deepening network effect, and the overall synergies and resilience.

All this is anchored on the Big Four agenda, which  prioritizes in MTP 3 (2018-2022) that emphasises scaling up manufacturing contribution to GDP, Affordable Housing, Universal Health Care, Food and Nutrition Security.

It is important to note at this point that the Affordable Housing pillar of the Big Four is already up and running with all legal, institutional and regulatory frameworks already put in place, while implementation roll out is underway at various sites across the country.

The successful implementation of the Big Four will enhance the structural transformation by  turning around entrenched social-economic bottlenecks facing Kenyans while expanding the size of the economic pie by 6.5 per cent by 2022.

These exciting prospects should enable the government scale up investments in social safety net programmes that have benefitted immensely from expanded national fortunes of the last 15 years.

These include free universal basic education, Inua Jamii and universal health care among other social welfare programmes.

It is, however, worth noting that this impressive economic outlook faces various risks among them slow take off of public-private partnership projects, shortfalls in revenue collection and the escalation or prolonging of the US-China trade disputes expected to impact global trade. Uncertainties and disruptions around Brexit are also expected to cause adverse impact on global trade.

In anticipation and in preparedness, the government has put in place mitigating measures including increased revenue collection and administration key among these plugging tax evasion and pilferage gaps as well as the provision of technical assistance to county governments to enhance county revenue collection and service delivery.

Continued formulation  and implementation of policy measures and other incentives to promote growth of manufacturing and export, information and communication, financial and insurance sectors that are major contributors to revenue will also help mitigate against the risks.