In November 2023, the National Treasury announced that Kenya had appointed Citi and Standard Bank as joint lead managers to assess potential international capital markets funding.
This increased Kenya’s ability to overcome economic challenges through increased concessional borrowing.
World Bank in its Global Economic Prospects report released in June 2024 stated that this would see Kenya’s Gross Domestic Product (GDP) increase to 5.3 per cent in 2025 compared to 5 per cent in 2024.
The report further indicated that Kenya’s government had also placed policies to stabilise the economy and encourage growth.
“Kenya’s projected growth, improving from 5 per cent in 2024 to 5.3 per cent in 2025-26, reflects the country’s strengthened macroeconomic framework and its regained access to international financial markets,” the report remarked in part.
President William Ruto has in the past remarked that his administration would explore concessional borrowing in a move to shore up foreign exchange reserves as well as get money for development expenditure.
Concessional loans are preferable in developing markets since they offer favourable terms compared to prevailing market rates.
While borrowing will play a key part in Kenya’s economic recovery, the World Bank further revealed that the GDP would be boosted by favourable climatic conditions.
After experiencing the worst drought in 40 years, Kenya has received sufficient rainfall in 2023 and 2024.
“Kenya, growth also picked up in 2023, to 5.6 per cent, driven by a stronger-than-expected rebound in the agricultural sector following two years of drought,” the World Bank commented.
Additionally, the World Bank envisions that Kenya will continue growing economically due to the recovery of private sector activity in early 2024 with the momentum expected to hold.
The World Bank report did not consider how Kenya would fare in light of President William Ruto’s decision to reject the Finance Bill on Wednesday, June 25.
The Finance Bill had been expected to raise over Ksh300 billion to ensure that Kenya’s public debt does not cripple the economy.
Malala Dealt Blow in Court News Just In
