World Bank Revises Kenya’s Economic Growth Forecast Amid Key Sector Challenges
Kenya’s projected economic growth has been downgraded by the World Bank, reflecting a slowdown in the country’s main economic sectors. According to the 30th Edition of the Kenya Economic Update, released on Tuesday, December 10, the country’s Gross Domestic Product (GDP) is now projected to grow by 4.7% in 2024, a significant drop from the 5.6% forecasted in 2023.
Factors Behind the Downgrade
The World Bank attributed the revised growth projection to several challenges, including:
- Economic policies that have tightened Kenya’s macroeconomic framework.
- Severe floods between March and May, which disrupted key sectors.
- Declining business confidence, with private sector sentiment subdued even before the June protests.
The report notes that while the agriculture and services sectors remain resilient, both are showing signs of deceleration, posing further risks to the country’s economic stability.
Urgent Reforms for Economic Stability
While the GDP is expected to rebound in the coming years, the World Bank emphasized the need for key reforms to support long-term growth, including:
- Reducing budget deficits to minimize reliance on domestic and international borrowing.
- Ensuring transparency in public resource allocation and government expenditures.
- Addressing systemic issues like corruption and governance to create a more conducive business environment.
“We remain strongly committed to supporting the people and Government of Kenya to improve the economic environment and create more and better jobs,” stated Qimiao Fan, World Bank Country Director for Kenya, Rwanda, Somalia, and Uganda.
Women’s Empowerment as a Growth Catalyst
The report also highlighted Kenya’s progress in empowering women to contribute to economic transformation, emphasizing their critical role in boosting productivity.
Key recommendations include:
- Financial empowerment programs for women and girls.
- Improving education accessibility, especially in disadvantaged counties.
- Introducing scholarships and cash transfer programs to increase school retention and graduation rates for vulnerable girls.
“Education is a vital safeguard against adverse economic outcomes and a foundation for future empowerment,” the report emphasized.
Outlook and Commitment
Despite current challenges, the World Bank remains optimistic about Kenya’s potential for economic recovery. By addressing structural issues, prioritizing inclusivity, and fostering governance reforms, Kenya can create a sustainable path toward growth and resilience.
