The Kenyan economy is said to have grown by 4.8 per cent in 2022, well above the sub-Saharan Africa region average growth of 4.0 per cent and the global average of 3.5 per cent.
This revelation was made by Dr. Susan Koech, Deputy Governor of the Central Bank of Kenya, during the NCBA Bank Economic Forum on the 2024 Macroeconomic Outlook held at the Serena Hotel.
Despite the global uncertainties, Kenya's growth has remained robust and is expected to stay above global and sub-Saharan Africa averages in 2023 and 2024, showcasing the economy's resilience and diversified nature.
"The economy grew by 4.8 per cent in 2022, well above the sub-Saharan Africa region's average growth of 4.0 per cent and the global average of 3.5 per cent," Koech stated.
Dr. Koech stated that the economy's impressive performance is attributed to various factors, and the Central Bank of Kenya (CBK) anticipates further growth in the coming years.
According to Dr. Koech, the economy expanded by 4.8 per cent in 2022, surpassing the sub-Saharan Africa region's average growth rate of 4.0 per cent and the global average of 3.5 per cent.
She further stated that the CBK has projected that the Kenyan economy will continue to flourish, with a growth rate of 5.5 per cent expected in 2023 and nearing 6.0 per cent in 2024.
These optimistic forecasts are underpinned by several key factors:
Rebound in Agriculture Sector: The CBK expects a significant rebound in the agriculture sector, which, along with the resilience of the services sector, is anticipated to bolster economic growth in the coming years.
Government Measures: Government initiatives aimed at stimulating growth in priority sectors, including agriculture and manufacturing, are expected to make a positive impact on the economy.
The strength and resilience of the Kenyan economy can be attributed to various factors:
Diversification: The economy has diversified away from its traditional reliance on agriculture, which now accounts for about 22 per cent of the annual GDP.
The services sector and Micro, Small, and Medium Enterprises (MSMEs) have played an increasingly prominent role in the economy, demonstrating the presence of a dynamic private sector.
This diversification has enabled the Kenyan economy to weather multiple shocks, particularly in recent years.
Export Diversification: Kenyan exports are diversified in terms of both products and destinations.
About 40 per cent of Kenyan exports are directed towards Africa, highlighting the importance of the African market.
The implementation of the Africa Continental Free Trade Area (AfCFTA) is expected to further boost intra-African trade and create increased demand for Kenyan products.
Dr. Koech also emphasized the significance of policy measures being undertaken by both the Central Bank and the National Treasury.
These measures are aimed at providing a solid foundation for macroeconomic stability and long-term growth.
"he policy measures currently being pursued by both the Central Bank and the National Treasury aim to continue providing a strong foundation for macroeconomic stability and long-term growth," she stated.
Coordination between monetary and fiscal policies continues to support stability in the economy and financial markets.
The monetary policy focuses on achieving and maintaining price stability, while the government is committed to fiscal consolidation to stabilize public debt.
This commitment will lower the domestic financing needs of the government, enabling expanded lending to the private sector by the banking sector.
Kenya's economic outlook for 2023 and 2024 appears promising, underlining the nation's ability to navigate global uncertainties and maintain a strong growth trajectory.