Kenya’s low export levels and increased imports of cheap goods is the major cause of slow economic growth, the 2017 Kenya Economic Report has revealed.
Released today, at a Nairobi hotel by the Kenya Institute of Public Policy and Analysis, the report cited China and India as the major countries exporting cheap products to Kenya.
“With all the investments within, the GDP growth can only go upto 6.7 per cent by 2020,” said KIPPRA executive director Rose Ngugi during her keynote speech.
In 2016, Kenya’s economy expanded by 5.8 per cent supported by prudent fiscal and monetary policies.
Construction, real estate and the rebound of tourism continued to strongly support this growth process.
However, the 10 per cent growth rate target in Vision 2030 is yet to be achieved.
According to the report, accelerated growth in private investments needs to reach investment/GDP ratio of 30 per cent and over 9.0 per cent growth in exports.
On exports, it cited the bulk of it as raw materials and primary products while imports consist of high value capital and finished products which perpetuate trade deficit.
According to the 2017 Economic Survey, total exports declined marginally from Sh581.0 billion in 2015 to Sh 578.1 billion in 2016 while total imports contracted by 9.2 per cent from Sh 1,577.6 billion to Sh 1,431.7 billion, during the year under review.