- It expects Kenya's economy to expand 7.6 per cent up from negative growth last year
- So far, over two million people have been rendered jobless as companies shut, with the unemployment rate doubling to 10.4 per cent
Kenya's economy is expected to expand at the fastest rate compared to her peers in Africa this year even as households struggle to make ends meet.
In its latest World Economic Update, the International Monetary Fund (IMF) says the country's economy is set to hit 7.6 per cent up from a negative growth last year.
The fund expects Kenya’s economic growth to rebound from a contraction of 0.1 per cent last year, helped by schools re-opening and the removal of coronavirus restrictions in July last year.
The new restriction measures imposed by President Uhuru Kenyatta in March will, however, have a negative effect on the economy in the financial year starting July 1, with the growth forecast expected to drop 5.7 per cent.
According to the Sub Saharan Africa projections, Kenya's growth will be the fastest followed by Burkina Faso which is expected to rebound to 7.5 per cent from negative growth of 8.3 per cent last year.
Niger and Mozambique will also have faster growth of 6.9 and 6.6 per cent respectively.
Uganda, Rwanda and Tanzania are expected to grow at 6.3, 5.7 and 2.7 per cent respectively this year.
Overall, the region’s economy is expected to expand at 3.4 per cent, weaker than the six per cent for the rest of the world, amid a continued lack of access to vaccines and limited policy space to support the crisis response and recovery.
IMF first alluded to Kenya's fastest growth projection in a statement justifying the board's decision to grant the country the disputed $2.34 billion facilities.
It said Kenya’s medium-term outlook is positive, but the pandemic’s socio-economic impact will take time to reverse.
The rosy economic projection by IMF comes on the back of a recent report by the Consortium of Research on Governance (CORG) on the economic impact of Covid-19 on families in Kenya that showed that seven out of 10 families are struggling to put food on the table.
According to the report, 59.8 per cent of families skip meals to survive while 5.9 per cent rely on aids and donations. Less than three per cent have adopted other means while only 31.5 per cent can comfortably afford food.
So far, over two million people have been rendered jobless as companies shut, with the unemployment rate doubling to 10.4 per cent from 5.2 per cent in 2019.
Although March's result marked the softest rise in prices since September 2020, overall inflation inched up at 5.9 per cent from February’s 5.8 per cent.
The rise was largely due to higher prices for food and non-alcoholic beverages, as well as for housing, water, electricity, gas and other fuels, and transport.
Experts expect inflation to average 5.8 per cent in 2021, which is up 0.2 percentage points from last month’s forecast. For 2022, the panel sees inflation averaging 5.5 per cent.
Such findings have seen some economic experts and ordinary citizens criticise IMF's projections as extremely ambitious and blind to actual reality on the ground.
''Life is tough. Many people have lost jobs. Almost a half of economic activities are below optimal. Where is IMF getting its figures from? Dan Mureu, a fruit vendor along School Lane in Westlands, Nairobi said.
He added that he now sells 10 plates of fruit in a day at best compared to the pre-Covid-19 era when he could sell up to 60 plates.
Analysts at Citi Research do not share IMF’s highly optimistic outlook on Kenya’s GDP growth. They described the fund's forecast as extremely aggressive and expect Kenya’s economy to expand at 4.9 per cent in 2021.
The GDP per capita basically divides the country's GDP by its total population. Some argue that it’s a useful gauge to determine how prosperous a country feels to each of its citizens.