RECOVERY

NCBA projects Kenya's economy to grow 5.3% in 2021

The government allocated Sh14.3 billion towards vaccination.

In Summary
  • Growth expectations could swing between 7.6 per cent on a more optimistic scenario and 3.2 per cent on a worst-case.
  • The country will be subject to episodes of lockdowns although this may be clustered.
Nelson Gaichuhie, CAS The National Treasury and Planning and John Gachora, the NCBA Group Managing Director during the launch of NCBA 2020 Economic Outlook Report at Radisson Blu Hotel Nairobi
Nelson Gaichuhie, CAS The National Treasury and Planning and John Gachora, the NCBA Group Managing Director during the launch of NCBA 2020 Economic Outlook Report at Radisson Blu Hotel Nairobi
Image: COURTESY

A new projection puts Kenya’s Gross Domestic Product (GDP) 2021 at 5.3 percent on account of rebound of socio-economic activities.

The NCBA 2021 Economic Outlook f released Tuesday shows increased activity in education (32 per cent), construction (7.3 per cent), ICT (7.7 per cent), health (six per cent) and agriculture (four per cent) sectors, which it attributes to the easing of Covid-19 restrictions.

Other areas of growth, though slow  include – transport and storage, manufacturing, wholesale, and retail recording 0.7 per cent, 1.6 per cent, 2.5 per cent respectively.

The report further cites that vaccination remains a major policy imperative in achieving a strong, sustainable, and inclusive growth which, subject to vaccine availability, could enhance confidence later in the year.

NCBA Bank MD John Gachora says prospects for growth vary widely across sectors depending on the degree of exposure to the pandemic, scope for adaptability and policy support. 

''Covid-19 vaccination will undoubtedly remain the main economic policy for sustained recovery, complemented by interventions from government and the Central Bank,'' Gachora said. 

Even then, the report notes that the government may only achieve a vaccination coverage of 7.5 per cent of the population this year, assuming vaccine production and distribution improve significantly in the second half.

In the meantime, the country will be subject to episodes of lockdowns although this may be clustered.

''We are glad that the government allocated Sh14.3 billion towards vaccination. This may enhance coverage and confidence in the latter quarters of the year, subject to vaccine availability,” Gachora said.

The lender expects growth expectations to swing between 7.6 per cent on a more optimistic scenario and 3.2 per cent on a worst-case. 

This reflects the persistent uncertainty presented by the pandemic and underscores the need for flexibility and continued support from the government. 

NCBA's projection is reserved compared to that of CBK and the International Monetary Fund (IMF) who have higher expectations, anticipating 5.9 per cent and 6.3 per cent growth respectively.