From Reuters via Business Report
Kenya’s drive to improve rail, roads and power plants would help spur economic growth to 6.9 percent in 2015 and 7 percent in coming years, its finance minister said on Friday
Henry Rotich of the Treasury also told the Reuters Africa Investment Summit that the government would remain “active” in international capital markets after its oversubscribed Eurobond debut last year.
As well as infrastructure development, Kenya’s economy would benefit from the drop in global oil prices, which would spur the manufacturing sector and lift consumption, he said.
“There is a lot of economic activity and potential growth in almost all sectors is tangible.”
However, he said the outlook still remained susceptible to security concerns. A number of militant attacks in East Africa’s biggest economy over the past two years has dented earnings from the tourism sector.
Hiccups in agriculture could also affect the economy, he said.
“The perceived insecurity risk dampens the tourism sector and depressed rainfall could affect exports and agriculture.”
Kenya’s economic growth, which peaked at 7.1 percent in 2007, fell to an estimated 5.3 percent last year.
Government officials are racing to improve transport networks and build new power plants to boost growth, after decades of underinvestment.
China is financing a new 327 billion shilling (R41.7bn) railway from the port of Mombasa to the Ugandan border to boost links to regional trading partners. Uganda is looking to extend the line to Rwanda.
Improved transport links could also see the country import more, meaning the current account deficit would likely persist even as a weaker oil price cuts the cost of oil imports, the minister said.
The current account deficit is expected to widen to 8 percent of the gross domestic product in the fiscal year to June 2015, from 7.6 percent a year earlier, ratings agency Fitch said in January.
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