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Kenya - Economic update : kazi ni kazi - informal should not be normal (English)

This update comes in the wake of three game changing and mutually reinforcing trends. First, monetary policy in the United States (U.S.) will determine the direction of capital flows and currency stability. Second, the persistent decline in commodity prices will determine winners and losers and third, the cooling and rebalancing of the Chinese economy is likely to see a recalibration and change in the direction of trade. Kenya’s growth will depend on the net impact of these global trends on the one hand and the domestic policy response on the other. Growth in 2015 is estimated at 5.6 percent, and is projected to rise to 5.9 percent in 2016 and 6 percent in 2017. The economy has created more jobs in the recent years, but these are low productivity mainly in the informal services sector and are not associated with higher value added. In the next ten years, nine million youth will enter the labor market, a majority will continue to find jobs in the informal sector. To improve productivity of these jobs, policy interventions can be geared towards increasing access to broad skills beyond formal education, creating linkages between formal and informal firms, and helping small scale firms enter local and global value chains. To encourage private sector growth and create better jobs, the business environment must improve. Finally, Kenya can leverage the changes in the global economy to recalibrate its trade as a platform for structural change and provide the impetus for higher levels of growth and creation of productive jobs.

Details

  • Author

    Kiringai,Jane Wangui, Sanchez Puerta,Maria Laura

  • Document Date

    2016/03/01

  • Document Type

    Working Paper (Numbered Series)

  • Report Number

    104289

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Kenya,

  • Region

    Africa,

  • Disclosure Date

    2016/03/30

  • Disclosure Status

    Disclosed

  • Doc Name

    Kenya - Economic update : kazi ni kazi - informal should not be normal

  • Keywords

    Growth and Opportunity Act;danish international development;Cost of Doing Business;Macro Economics & Fiscal Management;customs and trade regulations;Primary and Secondary Education;energy regulatory commission;cost of money transfer;pending bill;monetary policy;local revenue collection;current account deficit;retail electricity price;fiscal consolidation;oil price;global value chain;foreign exchange market;high productivity jobs;higher value added;domestic money market;total electricity generation;access to infrastructure;domestic interest rate;expansionary fiscal policy;source of employment;global economy;Geothermal Power;formal sector;foreign exchange rate;renewable energy source;interest rate payment;investments in energy;cash flow projection;south african rand;total tax revenue;source of revenue;financing budget deficits;water supply infrastructure;maintenance of road;local authority staff;hydro power generation;commodity price boom;domestic policy response;skilled labor force;lack of skill;Private Sector Growth;total factor productivity;foreign exchange inflow;Foreign Exchange Reserve;quality of job;Gender and Education;primary completion rate;age of entry;medium term growth;long-term interest rate;direction of trade;retail electricity tariff;stable interest rate;trained labor force;balance of payment;commercial bank lending;reduction in poverty;value added tax;cost of credit;total wage bill;short-term interest rate;access to finance;global financial market;fiscal deficit;informal sector;export market;fuel cost;Fiscal Expansion;public debt;Job Creation;fiscal adjustment;informal firms;export earning;export earnings;lending rate;global market;mobile money;Labor Market;labor productivity;oil import;household enterprise;external account;job opportunities;construction sector;Fiscal policies;deficit financing;domestic borrowing;traditional market;job opportunity;export performance;regional market;functionally illiterate;global trend;rising cost;fiscal framework;high financing;export growth;installed capacity;reserve margin;employment creation;county health;approved budget;food price;budget execution;productivity growth;foreign borrowing;electricity sector;age category;government budget;net export;preferential access;debt service;syndicated loan;wage worker;male youth;capital flow;increase productivity;manufactured goods;agriculture sector;skill development;external financing;high wage;competition increase;mobile service;insurance service;supply increase;import price;net impact;Exchange Rates;private investment;hydropower generation;real sector;crop production;climatic condition;household survey;collect revenue;infrastructure spending;industrial growth;nonperforming loan;security concern;capital outflow;mobile payments;national grid;wage increase;currency stability;energy mix;hydro plant;peak demand;lending condition;supply side;digital dividend;agricultural machinery;cash basis;fiscal balance;foreign financing;Financial Sector;put pressure;net effect;demand decline;manufactured export;fiscal result;primary balance;manufacturing sector;average consumption;domestic consumer;thermal plant;largest markets;administrative cost;destination market;water resource;retail price;inflation adjustment;domestic debt;capital spending;staff capacity;absorption rate;expenditure increase;nominal wage;investment spending;interest repayment;total debt;import duty;generation capacity;treasury bond;capital gain;excise duty;marginal increase;export sector;fiscal pressure;expenditure source;export promotion;capital stock;textile sectors;manufacturing market;customs union;Industrialized countries;trading partner;industrialized country;import contract;global factor;short-term shocks;skill building;consumer goods;small-scale enterprise;social barrier;Child care;increasing trade;risk profile;downside risk;security threat;industrial sector;private investor;global shocks;kenyan shilling;exporting firms;business management;permanent worker;job security

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Citation

Kiringai,Jane Wangui Sanchez Puerta,Maria Laura

Kenya - Economic update : kazi ni kazi - informal should not be normal (English). Kenya economic update,no. 13 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/888091467988907587/Kenya-Economic-update-kazi-ni-kazi-informal-should-not-be-normal