Kenya

Country Overview

The East African nation of Kenya has a population estimated at 46.1 million, which increases by an estimated one million a year. With support of the World Bank Group (WBG), International Monetary Fund (IMF) and other development partners, Kenya has made significant structural and economic reforms that have contributed to sustained economic growth in the past decade. Development challenges include poverty, inequality, and vulnerability of the economy to internal and external shocks.

Political Context

Devolution is rated the biggest gain from the August 2010 constitution, which ushered in a new political and economic governance system. It is transformative and has strengthened accountability and public service delivery at local levels. The government’s agenda is to deepen implementation of devolution and strengthen governance institutions, while addressing other challenges including land reforms and security to improve economic and social outcomes, accelerate growth and equity in distribution of resources, reduce extreme poverty, and youth employment.

Economy

The World Bank’s most recent Kenya Economic Update (KEU) March 2016 projected a 5.9% growth in 2016, rising to 6% in 2017. The report attributed the positive outlook to low oil prices, good agriculture performance, supportive monetary policy, and ongoing infrastructure investments.

According to the latest Kenya National Bureau of Statistics (KNBS) quarterly report, Kenya’s economy expanded by 6.2% in the second quarter compared to 5.9% in the same period in 2015.

Inflation in 2016 has remained within the government target rate, largely driven by food inflation. Kenya continues to benefit from low fuel prices and good rains, a stable macroeconomic environment, and good monetary policy action, which has ensured inflation remained contained in the first half of 2016.

Social Developments

Kenya has met a few of the Millennium Development Goals (MDGs)targets, including reduced child mortality, near universal primary school enrolment and narrower gender gaps in education. Interventions and increased spending on health and education are paying dividends. Devolved health care and free maternal health care at all public health facilities will improve health care outcomes and develop a more equitable health care system.

Development Challenges

Kenya has the potential to be one of Africa’s great success stories from its growing youthful population, a dynamic private sector, a new constitution, and its pivotal role in East Africa. Addressing challenges of poverty, inequality, governance, low investment and low firm productivity to achieve rapid, sustained growth rates that will transform lives of ordinary citizens, will be a major goal for Kenya. 

The World Bank. (2016). Kenya. In Kenya Overview. Retrieved from http://www.worldbank.org/en/country/kenya/overview