In-Depth Analysis
Kenya
Following a commendable growth performance of late, the sudden economic and financial stops due to Covid-19 have derailed East Africa’s most sophisticated economy. The fiscal measures enacted to mitigate the socio-economic impact of the virus will exacerbate the country’s precarious fiscal and public debt positions. The outlook remains positive, supported by a diversified economic base, strong manufacturing sector, and a relatively skilled workforce.
Leading indicators point to a relatively strong economic recovery in H1, underpinned by improvements in the construction, education, information & communication, and real estate sectors. That said, a rise in the number of Covid-19 cases is one of the reasons behind our below consensus view of 5% growth this year. The Kenyan political class is preoccupied with the 2022 presidential elections. President Uhuru Kenyatta does not want his opponent Deputy President William Ruto to win, and so has committed to supporting a coalition candidate against him. The political environment is certain to remain unstable over the short to medium term. Succession and ethnicity-based politics continue to be the main political risks in the long term. (Source: Kenya Quarterly Update, published August 2021.)
Macroeconomic Data
(2020)
|
Fiscal Balance (as a % of GDP) |
-8.8 |
|
Consumer Price Index (% change y-o-y, avg) |
5.3 |
|
Current Account Balance (as a % of GDP) |
-4.1 |
|
Real GDP (annual % change) |
-0.4 |
|
GDP per Capita, US$ |
1,850.0 |
|
Import Cover (months) |
5.5 |
|
Population, million |
53.8 |
| Total External Debt (as a % of GDP) |
38.3 |