The African Development Bank (AfDB) in the latest Macroeconomic Performance and Outlook for 2024 report has listed Kenya among African countries expected to record economic growth in 2024.
According to the report, Kenya will post improved economic performance due to higher public investment in major growth sectors such as manufacturing and services.
AfDB's report further points out that Kenya will also benefit from substantial capital input in critical public infrastructure including electricity, transport, and logistics networks. After assessing the specified factors, the continental body projects that Kenya will record 5.4 per cent growth in 2024.
Other African countries expected to record positive growth include; Burundi, Cote d'Ivoire, Djibouti, Ethiopia, Rwanda, Tanzania and Uganda.
The report attributed Kenya's higher growth in Gross Domestic Product (GDP) recorded in 2023 to the strong recovery of the agriculture industry.
Instructively, the 2024 Budget Policy Statement released by the National Treasury shows that the economy is projected to expand by 5.5 per cent in 2024 from 4.8 per cent in 2022.
According to Treasury Cabinet Secretary Njuguna Ndung'u, this growth outlook will be supported by a broad-based private sector growth, continued robust performance of the services sectors, the rebound in agriculture, and the ongoing implementation of policy measures to boost economic activity in the priority sectors.
However, the AfDB report noted that the removal of fuel subsidies in Kenya led to social unrest which was a common theme across several African nations.
"The removal of fuel subsidies in Angola, Ethiopia, Kenya, and Nigeria and the resulting social costs have led to social unrest driven by opposition to government policy," read part of the report.
Another challenge the report revealed may face Kenya and derail progress is the rising debt burden. This, AfDB reckons would affect businesses and increase the prices of household items.
In 2024, Kenya will be among African countries that will be repaying multi-billion loans. Kenya is set to pay back a USD2 billion Eurobond maturing in June.
AFDB projects that Kenya will be repaying about Ksh707.5 billion in loans in 2024.
"African countries are expected to spend around Ksh7.6 trillion (USD74 billion) on debt service, up from Ksh2.4 trillion (USD17 billion) in 2010. Some Ksh5.6 trillion (USD40 billion), or 54 per cent of total debt service, is owed to private creditors," read part of the report.
Additionally, another challenge that the country is grappling with is inflation. Egypt and South Africa are also experiencing the same problem which AfDB points out may lead to an increase in food prices and deteriorating business conditions.
AFDB offered a few recommendations to guarantee continued economic growth including; tackling persistent inflation, addressing tax burdens, and reforming the current global financial aid architecture to make it fit African countries' financing needs.
