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Kenya Economic Update - Beyond resilience : increasing productivity of public investments (English)

Kenya is one of the bright spots in Sub-Saharan Africa. With economic growth rates sustained at above 5 percent, Kenya has outperformed the regional average, for 8 consecutive years. Robust domestic demand emanating from private consumption and government investment are the key drivers of growth, underpinned by a stable macroeconomic environment, lower oil prices, diversification, improved security perceptions, and ongoing structural reforms. Medium term economic prospects for Kenya remain robust. Ongoing public infrastructure investments will continue to play a ‘crowding-in’ role, easing transport and energy costs, and supporting economic expansion in construction andindustry. Private consumption will drive service sector growth, while agricultural sector will remain largely dependent on favorable weather conditions and timely availability of inputs. Though oil prices are expected to pick-up over the forecast horizon, Kenya’s external sector account will remain healthy on account of a steady increase in remittances, a rebound in tourism and a rise in foreign direct Investment (FDI). Nonetheless, there exist downside risks that can dent future growth prospects. Risks to Kenya’s future growth prospects that are not included in our baseline outlook emanate from both external and domestic sources. On the external front, these include weaker than expected growth in the global economy, volatility in global financial markets and a spike in oil prices. On the domestic front, these include delays to fiscal consolidation, adverse weather developments, and potential uncertainties associated with the run-up to 2017 elections that could lead to a wait-and-see attitude by investors, thereby dampening short-term growth prospects.

Details

  • Author

    Kiringai,Jane Wangui, Kristensen,Jens Kromann

  • Document Date

    2016/10/01

  • Report Number

    109575

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Kenya,

  • Region

    Africa,

  • Disclosure Date

    2016/10/30

  • Disclosure Status

    Disclosed

  • Doc Name

    Kenya Economic Update - Beyond resilience : increasing productivity of public investments

  • Keywords

    danish international development;system of public investment;Executive Offices;medium term growth;land acquisition;increase in revenue collections;Land Acquisition and Resettlement;public investment management index;Incremental Capital-Output Ratio;medium term economic prospect;Cost of Doing Business;small and medium enterprise;recurrent budgets;current account deficit;global financial market;source of revenue;cost of land;trade and transportation;oil import bill;cost of credit;international good practice;pace of expansion;land acquisition process;total factor productivity;acquisition of land;unit of output;increase in remittance;foreign direct investment;interest rate hike;public land management;Logistics Performance Index;price of good;increase in debt;transport and energy;interest rate cap;increase in expenditure;risk of distress;number of tourists;corporate cash flow;private sector credit;weak budget execution;pushing up prices;availability of fund;environment for investment;national level expenditure;local revenue collection;Support for Economic Expansion;current account balance;improving budget execution;public infrastructure investment;domestic debt instrument;economic growth rate;contribution of investment;oil price decline;expansionary fiscal policy;information and communication;demand for land;agriculture and service;efficiency of investment;macroeconomic environment;global economy;national transfer;remittance inflow;private consumption;net export;Fiscal Expansion;domestic sources;weather condition;domestic demand;binding constraint;investor confidence;involuntary resettlement;fiscal deficit;global demand;banking sector;manufacturing sector;industrial sector;catalytic impact;currency stability;expected growth;minimum criteria;financial service;domestic electricity;tourism sector;fiscal balance;case file;commodity price;financial account;increase productivity;business environment;downside risk;positive growth;debt level;fiscal consolidation;capital budget;oil share;audit revenue;cost escalation;public debt;legitimate rights;private household;food price;inflation;hospital fees;transmission line;budget amount;maize price;property rate;bus park;core inflation;credit growth;credit expansion;kenyan shilling;park fee;business infrastructure;budgetary allocation;consumer durable;supply-side constraints;budget expenditure;exchange reserve;Exchange Rates;staff capacity;trade balance;Investment Flow;country infrastructure;Fiscal policies;government incentive;incentive program;Tax Administration;enhancing compliance;retail trade;fuel price;infrastructure expenditure;Job Creation;global standard;SME sector;global reform;dispute arising;total development;good faith;heavy rain;fuel levy;grant allocation;government revenue;upper bind;business permit;project costing;external source;foreign participation;financial corporation;fiscal space;increasing share;formal ownership;gross estimate;foreign partner;higher allocations;public wage;project accounting;supply side;middle class;unintended consequence;la nina;climatic condition;agricultural growth;capital outflow;interest policy;rural investment;rural environment;productivity growth;market growth;market land;road weather;statistical table;marginal increase;displaced person;compensation rate;poor livelihood;restoration measure;judicial case;global trade;land cases;legislative act;improving productivity;agricultural production;federal reserve;increased access;electricity cost;Energy Sector;Trade Logistics;ppp terms;adverse weather;productivity gain;stock market;project selection;land preparation;capital stock;forecast horizon;government investment;budget increase;payment assurance;escrow account;infrastructure sector;high inflation;agricultural sector;Demographic Transition;wage employment;net investment;high court;accelerating growth;community group;land parcel;national authority;land administration;short-term portfolio;Macroeconomic Stability;terrorist activity;oil exporter

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Citation

Kiringai,Jane Wangui Kristensen,Jens Kromann

Kenya Economic Update - Beyond resilience : increasing productivity of public investments (English). Kenya economic update,no. 14 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/882161477667623804/Kenya-Economic-Update-Beyond-resilience-increasing-productivity-of-public-investments