The macroeconomic performance of Kenya’s economy has remained resilient over time. There was a notable improvement in economic growth, which increased from 5.4 per cent in 2014 to 5.6 per cent in 2015 and 5.8 per cent in 2016, accompanied by the stable macroeconomic environment. In addition, the growth performance was driven by high growth in economic sectors, including tourism (13.3%), mining and quarrying (9.5%), construction (9.2%), electricity supply (9.1%), real estate (8.8%) and transport and storage (8.4%).
To secure and sustain a strong inclusive growth, fundamental areas require further attention. For example, the persistent savings-investment gap requires deliberate effort to boost mobilization of domestic resources. With wage employment generally dominated by informal sector employment, ensuring quality jobs are created is crucial in reaping the youth dividend. Safeguarding fiscal sustainability while also promoting public investment to address infrastructure gaps will secure a growth-enhancing fiscal policy. In addition, access to appropriate and affordable credit by the private sector will contribute significantly in boosting private investments and trade.
With net exports continuing to drag growth of aggregate demand, regional economic integration is important in boosting exports. By promoting economic diversification and value-added production, economic integration would support productivity-induced, employment-generating and poverty-reducing growth as envisaged in Vision 2030. Specifically, economic integration initiatives provide the opportunity for Kenya to expand private investments in support of value addition and diversification of exports and place the economy on a stable and sustainable growth path.