Factors hindering Kenya’s economic growth disclosed
from MARIA MACHARIA in Nairobi, Kenya
NAIROBI, (CAJ News) – AN international markets analyst has projected a number of sociopolitical problems to hamper Kenya’s growth potential in the short term.
Rand Merchant Bank (RMB), the South African-headquartered financial house, cited terrorism, corruption, political tensions and structural challenges as drawbacks.
“The outlook is not without risks as deep-seated corruption, growing security concerns in major city centres, political factions within the ruling party and domestic infrastructure constraints could undermine Kenya’s growth potential,” RMB stated in latest Global Markets update on Thursday.
It pointed out that the danger posed by al-Shabaab terror group was aggravated by long-running ethnic rivalries over land and the government’s incoherent strategy to contend with the radicalisation of the youth, which is likely to dampen support for President Uhuru Kenyatta’s administration.
RMB’s sentiments nonetheless came on the back of the country’s gross domestic product expanding 4,9 percent year-on-year in the first quarter of this year, outpacing the growth it recorded in the same period last year (4,7 percent).
Despite raising concern at the sociopolitical challenges, RMB noted all was not gloom, expecting Kenya to flourish over the next two years on the back of solid gains in the mining, Informationa and communications technologies and construction sectors.
The mining sector stands to benefit sizably from the enactment of the Mining Bill if investors perceive there to be a distinct change in the regulatory environment, particularly the administration of mineral rights. Building and construction is well-served by a growing demand for housing and the repairing of roads and bridges under the Kenya Urban Transport Infrastructure Programme.
RMB projected ICT to play a pivotal role.
“As a leader in mobile money and a breeding ground for innovative mobile applications, Kenya is entrenching itself as an ICT hub in Sub-Saharan Africa.
However, the tax framework on ICT imports is blurred, dampening investment, added RMB.
– CAJ News
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