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Kenya economic update : anchoring high growth - can manufacturing contribute more (English)

This is the eleventh edition of the Kenya Economic Update. The special focus of this update examines the structural factors underpinning the poor performance of the manufacturing sector. Drawing on recent firm-level data from the 2010 Industrial Census and the 2013 Enterprise Survey. It investigates the extent to which the sector's lack of dynamism reflects problems in Kenya's business environment, which compares poorly to regional neighbors' on several manufacturing-relevant dimensions. The report has four main messages: First, Kenya begins 2015 in a sound economic position. After growing an estimated 5.4 percent in 2014, its economy is poised to be among the fastest growing in the region, with growth projected at 6.0 percent in 2015, 6.6 percent in 2016, and 7.0 percent in 2017. Second, the external sector remains weak and vulnerable, as import growth continue to outpace export growth and short-term flows finance the current account deficit. The large deficit points to underlying structural weaknesses in Kenya's economy, which need to be addressed. Third, Kenya needs to increase the competitiveness of the manufacturing sector so that it can grow, export, and create much-needed jobs. As a share of GDP, Kenya's manufacturing sector has been stagnant in recent years, and it has lost international market share; lastly, the weak business environmentis a key constraint for the manufacturing sector. Obstacles to doing business affect this sector more than many others because manufacturing needs access to capital for investments, infrastructure to import inputs and export and distribute finished products, affordable and reliable electricity to produce, labor to man operations, and fair and streamlined regulations and trade policies that allow firms to compete.

Details

  • Document Date

    2014/12/01

  • Document Type

    Working Paper (Numbered Series)

  • Report Number

    94697

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Kenya,

  • Region

    Africa,

  • Disclosure Date

    2015/03/24

  • Disclosure Status

    Disclosed

  • Doc Name

    Kenya economic update : anchoring high growth - can manufacturing contribute more?

  • Keywords

    manufacturing sector;current account deficit;Cost of Doing Business;Macro Economics & Fiscal Management;high quality of life;types of tax revenues;access to finance;source of energy;oil price;business environment;generation of electricity;wages and salary;access to capital;domestic financial market;public debt;private sector credit;stable exchange rate;information and communication;public investment spending;net public debt;international oil price;lack of competition;high growth rate;price of oil;tax administration measure;hydroelectric power generation;share of export;total debt service;value added tax;errors and omission;gross national income;gross public debt;middle income economy;share of import;high oil price;price of crude;keeping inflation low;total government spending;expansionary fiscal policy;international crude oil;real exchange rate;technology extension services;current account balance;balance of payment;fiscal deficit;monetary policy;export growth;comparator country;Exchange Rates;Real estate;geothermal generation;retail trade;national account;macroeconomic indicator;put pressure;foreign investor;long-term capital;productivity differences;financial intermediation;external demand;base year;import growth;electricity price;fiscal space;mobile money;aggregate demand;Fiscal policies;agricultural production;external account;budget execution;market distortion;security environment;gross output;higher growth;real income;consumption pattern;financial service;merchandise export;average change;macroeconomic environment;relative price;production structure;domestic demand;security situation;productivity policy;infrastructural investment;capital good;business service;manufacturing export;labor productivity;government revenue;firm productivity;industry sector;finished product;domestic electricity;Trade Policies;good performance;adverse shock;virtuous cycle;Trade Policy;external shock;global market;Macroeconomic Policy;price decline;security concern;population census;property transaction;resource mobilization;enterprise survey;Labor Market;capital outflow;Land Registry;Business Registration;industry services;informal sector;food price;debt burden;external balance;export earning;livestock census;external position;coffee production;residential building;infrastructure provision;relative change;government expenditure;firm-level analysis;living standard;mobile payments;capital gain;average inflation;rental income;manufactured goods;macroeconomic consequence;traditional dwellings;civil works;hydropower generation;public borrowing;coffee price;industrial production;Business Climate;productive purposes;export sector;capital flow;external indebtedness;traded goods;potential output;fiscal indicator;government's commitment;fiscal discipline;formal manufacturing;increased spending;government capital;foreign exchange;tourism market;positive externality;infrastructure market;emerging economy;international market;professional service;kenyan shilling;forecast horizon;coastal hotel;ministerial expenditure;risk averse;Energy Projects;remittance inflow;coverage ratio;financial account;downside risk;stock market;credit growth;inflationary pressure;monetary aggregate;long-term rate;demographic structure;capital spending;employment creation;productivity job;debt position;livestock output;debt sustainability;private consumption;firm operation;government consumption;exogenous shock;similar way;private investment;firm size;productivity growth;supply side;informal firms;cross-border trade;cargo clearance;insolvency framework;accurate estimate;Job Creation;global financial;international expert;technical standard;statistical knowledge;prices fall;human capital;regulatory environment;increasing exports;import needs;high unemployment;young people;social stability;Fiscal Expansion;tea prices;Fiscal Sustainability;low-skilled job;Emerging economies;private finance;Macroeconomic Stability;pay taxes;construction permit;business growth;fiscal position

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Citation

Kenya economic update : anchoring high growth - can manufacturing contribute more (English). Kenya economic update ; Edition no. 11 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/652361468043487766/Kenya-economic-update-anchoring-high-growth-can-manufacturing-contribute-more