On 5^th June 2024, KEPSA participated in the launch of the 29^th Edition of the Kenya Economic Update (KEU) hosted by the World Bank Group in Nairobi. Speakers at the event included Ms. Alma Nurshaikhova – Senior Public Sector Specialist at the World Bank; Mr. Michael Mandu – Director in the State Department for Trade; and Dr. Albert Mwenda - Director General of Budget, Fiscal and Economic Affairs. KEPSA CEO Ms. Carole Kariuki was part of the panel session together with Mr. Anthony Mwangi – CEO of Kenya Association of Manufacturers (KAM); Ms. Florence Benta Were – Ag. Managing Director of KenInvest; Dr. Abraham Rugo – Executive Director of International Budget Partnership Kenya; and Ms. Wanjiru Gikonyo – Governance Advisor in a session that was moderated by Mr. Tom Bundervoet – Lead Economist at the World Bank.  

Themed, ‘Fostering trade for robust growth and dynamic job creation’, the edition covers the recent economic developments and outlook while focusing on the role of trade integration in promoting growth and job creation.  KEU is the World Bank Group’s biannual flagship report that provides an update on the economy. Through special topics, KEU examines selected policy issues and medium-term development challenges in Kenya, which are pertinent to a wide range of players in the economy including policymakers, business leaders, financial market participants and analysts, all who were represented in the launch event.

In her welcoming remarks, Ms. Alma Nurshaikhova – Senior Public Sector Specialist at the World Bank noted that a stronger macroeconomic framework, access to international financial markets and structural reforms are needed to boost trade and economic growth. She said Kenya must also become a driver of growth through trade integration initiatives and attracting foreign direct investment.

Mr. Michael Mandu – Director in the State Department for Trade indicated that for the last two years, Kenya faced drastic challenges such as high inflation which rose to 7.6% in 2022, driven by higher food and energy prices even though subsidies and higher policy rates helped to moderate inflation. Mr. Mandu added that fiscal deficit concerns and increased public debt within the period also added to the challenges. However, he pointed out that despite these challenges, trade integration has continued to drive the economy through opening markets and supporting industrialisation.  

The 29^th KEU report indicates several developments in the economic outlook, including tight monetary policies, restrictive financial conditions and a slowdown of global trade that continue to weaken global growth. The report also estimates that Kenya’s economic growth in 2023 experienced a cyclical rebound and accelerated despite the challenging environment.

The National Treasury and Economic Planning representative, Dr. Albert Mwenda - Director General of Budget, Fiscal and Economic Affairs, outlined strategies for economic recovery and growth in Kenya while highlighting the importance of fiscal discipline and debt management. He emphasised Kenya's resilience and government efforts to support businesses while stressing the need for sustainable growth through effective policies.

According to the report, ongoing fiscal consolidation efforts, tight monetary policy and fading tailwinds from the agriculture rebound are expected to slow GDP growth to 5% in 2024. However, the report also shows that Kenya’s efforts in trade integration could significantly contribute to substantial economic growth and job creation.

In a panel discussion, the KEPSA CEO Ms. Carole Kariuki noted that local integration is critical to ensuring businesses compete effectively within various trade regions. However, she pointed out that businesses, notably in horticulture and other perishable goods, continue to face challenges due to the lack of harmonised trade policies while operating across counties. She said that this has increased operational costs due to duplicative levies and fees. Other key issues that emerged from the discussion included the need to address corruption, and public debt and reduce red tape for the private sector to thrive.