Publication: Kenya Economic Update, December 2014, No. 11: Anchoring High Growth
Loading...
Published
2014-12
ISSN
Date
2015-04-28
Author(s)
Editor(s)
Abstract
This is the eleventh edition of the Kenya Economic Update. The special focus of this update examines the structural factors underpinning the poor performance of the manufacturing sector. Drawing on recent firm-level data from the 2010 Industrial Census and the 2013 Enterprise Survey. It investigates the extent to which the sector's lack of dynamism reflects problems in Kenya's business environment, which compares poorly to regional neighbors' on several manufacturing-relevant dimensions. The report has four main messages: First, Kenya begins 2015 in a sound economic position. After growing an estimated 5.4 percent in 2014, its economy is poised to be among the fastest growing in the region, with growth projected at 6.0 percent in 2015, 6.6 percent in 2016, and 7.0 percent in 2017. Second, the external sector remains weak and vulnerable, as import growth continue to outpace export growth and short-term flows finance the current account deficit. The large deficit points to underlying structural weaknesses in Kenya's economy, which need to be addressed. Third, Kenya needs to increase the competitiveness of the manufacturing sector so that it can grow, export, and create much-needed jobs. As a share of GDP, Kenya's manufacturing sector has been stagnant in recent years, and it has lost international market share; lastly, the weak business environmentis a key constraint for the manufacturing sector. Obstacles to doing business affect this sector more than many others because manufacturing needs access to capital for investments, infrastructure to import inputs and export and distribute finished products, affordable and reliable electricity to produce, labor to man operations, and fair and streamlined regulations and trade policies that allow firms to compete.
Link to Data Set
Citation
“World Bank Group. 2014. Kenya Economic Update, December 2014, No. 11: Anchoring High Growth. Kenya economic update;Edition no. 11. © World Bank. http://hdl.handle.net/10986/21803 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Kenya Economic Update, June 2005, No. 12(2015-06-01)Kenya’s economic performance remains solid, underpinned by strong infrastructure spending and consumer demand, which are driving growth. Growth in 2015 is estimated at 5.4 percent, a 0.6 percent downward revision from its estimate in December 2014. The revision reflects the strong headwinds the economy is facing in the foreign exchange market and the monetary policy response to calm those fears.Publication Decision Time : Spend More or Spend Smart? Kenya Public Expenditure Review(Nairobi, 2014-12)Kenya is currently in an expansionary phase of its fiscal policy reflected in a widening primary deficit. The fiscal framework is marked by a significant fiscal expansion over the last three years, 2011/12 to 2013/14. The fiscal stimulus implemented in 2009/10 increased aggregate spending by 2 percent of Gross Domestic Product (GDP). However the envisaged fiscal retrenchment at the end of the program did not materialize and fiscal expansion continued with the general election in 2013. Aggregate expenditure averaged 25 percent and revenue at 18 percent of GDP. The fiscal deficit financed through debt is reflected in the doubling of the primary deficit (commitment basis) now in the range of 3.3 percent of GDP, and the rising stock of public debt from 37 percent to 43 percent of GDP (net of deposits), of which about half 22 percent was external debt in 2013/14. The fiscal developments have seen an increase in the share of debt service in total spending from 13 percent to 15 percent of recurrent spending, equivalent to 2.6 percent of GDP. Kenya s debt service is higher among East Africa Community (EAC) peers, 2 percentage points above Ethiopia and Rwanda, and 1 percentage point higher than Uganda and Tanzania.Publication India Development Update, April 2013(Washington, DC, 2013-04)The economy is likely to expand by 5.0 percent in FY2013. Although the slowing momentum of economic growth may have bottomed out in the third quarter of FY2013, even a substantial pickup in the last quarter of the fiscal year is unlikely to lift the growth rate of real Gross Domestic Product (GDP) at factor cost much beyond 5.0 percent given the weakness observed over the previous three quarters. Inflation and fiscal deficit have declined, but the current account deficit has widened. The Reserve Bank of India (RBI) has had to strike a tough balance between providing some monetary stimulus and restraining further price growth. As inflation, measured by the wholesale price index, has begun to decelerate in recent months, the authorities may gain additional policy room. Continued progress on the reform agenda is key to mitigating downside risks. The authorities' ability to respond to negative external shocks is more limited today than during the 2008-09 global crisis. Additional efforts may be needed to create the fiscal space for India's progress towards universal health coverage. The depreciation of the rupee appears to have lost steam, and the currency strengthened in the second half of the year. With a weaker Balance of Payment (BoP) position, the rupee continued to lose value during FY2013 and hit an all-time low in June, remaining around that level until August. Food inflation remained high while fuel inflation accelerated after deregulation of diesel prices. Expenditure compression in the social sectors and reduction in capital spending allowed for reaching the fiscal targets.Publication Philippines Quarterly Update, December 2011(World Bank, Pasig City, Philippines, 2011-12)After a strong rebound in 2010, Philippine economic growth slowed by more than half to 3.6 percent in the first three quarters of 2011. Slower third quarter (Q3) growth of 3.2 percent was the result of significant contractions in exports and public investment. The contraction in exports largely reflected weaker demand in advanced economies while public investments continued to shrink in part because of measures to improve accountability of public spending. On the production side, industrial and agricultural activities were sluggish, leaving the services sector to buoy growth. To improve growth outcome in the remainder of the year, the government announced a PHP 72 billion (about 0.7 percent of GDP) disbursement acceleration plan to ensure that budgeted items are spent by year end. After a strong rebound in 2010, Philippine economic growth slowed by more than half to 3.6 percent in the first three quarters of 2011, bringing year to date growth below the government's revised target of 4.5 to 5.5 percent for 2011. Q3 growth of 3.2 percent was driven by private consumption and inventory build-up, which grew by 7.1 and 147.7 percent respectively. The country's slower expansion places it behind its neighbors with Indonesia, Vietnam, and Singapore growing above 6 percent, Malaysia at 5.8 percent, and Thailand, which was devastated by massive flooding in recent months, at 3.5 percent.Publication Nigeria - Competitiveness and Growth : Country Economic Memorandum, Volume 2. Main Report(Washington, DC, 2007-05)The theme of this report is Nigeria's competitiveness and growth. This report consequently focuses on constraints, opportunities and strategic choices associated with increasing productivity and growth of the Nigerian economy on a sustained basis. Its objective is not to present a "blueprint" for Nigeria's growth but rather to raise issues and provide some options for the consideration of policy makers and other Nigerian stakeholders. The report is structured in four main sections. The first section analyzes Nigeria's growth history, examines the recent growth pick up and assesses its sustainability. The second section analyses how the critical constraints to competitiveness and growth may be addressed. The third section discusses how trade -domestic and external - can be used more effectively to drive growth and poverty reduction. The final chapter provides policy conclusions and suggestions on what could be key elements of a growth agenda for Nigeria. The analysis in this report suggests the following key elements for a growth strategy for Nigeria: 1) Strengthening actions to tackle the most immediate constraints to the competitiveness of the economy presented by infrastructure and the business environment; 2) Using domestic trade more effectively to enhance productivity and competitiveness by strengthening their functioning, and building stronger linkages between the oil and non-oil sectors, and over time strengthening Nigeria's integration into global markets; 3) Ensuring that the poor can participate more fully in growth by placing urgent emphasis on (i) finding ways to give back some of the proceeds of oil windfall directly to Nigerians; (ii) raising agricultural productivity-including through enhanced technology; and (iii) encouraging the transition from informality to the formal sector; and 4) Building the human capital and technological base of the economy over the longer term.
Users also downloaded
Showing related downloaded files
Publication World Bank Annual Report 2024(Washington, DC: World Bank, 2024-10-25)This annual report, which covers the period from July 1, 2023, to June 30, 2024, has been prepared by the Executive Directors of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—collectively known as the World Bank—in accordance with the respective bylaws of the two institutions. Ajay Banga, President of the World Bank Group and Chairman of the Board of Executive Directors, has submitted this report, together with the accompanying administrative budgets and audited financial statements, to the Board of Governors.Publication Kenya Country Climate and Development Report(Washington, DC: World Bank, 2023-11-16)The Kenya Country Climate and Development Report (CCDR) aims to identify the impact of climate change on Kenya’s economy. Through robust and rigorous analyses that cover climate impact modeling across multiple scenarios and the overall economy, sectoral issues, investment needs and potential sources of financing, the CCDR aims to identify high impact intervention areas that would support climate positive development. Action against climate change is imperative to avoid setting back Kenya’s aspiration of being an upper-middle-income country and reducing poverty in the next decade. In a business-as-usual scenario, inaction under different climate futures could dampen real GDP by 1.25 to 2.4 percent by 2030 and 3.61 to 7.25 percent by 2050 compared to the baseline. Climate impacts Kenya’s human, natural and physical capital and the impacts vary by region. By 2050, no climate action could also result in 1.1 million additional poor compared to the baseline under the pessimistic climate scenario, with communities in the arid and semi-arid areas being most hard-hit. Kenya can also be a key player in the global climate solutions arena if it maintains a low-carbon growth path. Kenya stands out among African and lower-middle-income countries due to its well-diversified and primarily low-carbon energy mix, with about 90 percent of electricity generation coming from renewable resources. Kenya could also generate carbon offsets through large-scale landscape restoration. The CCDR identifies five key action areas that could enable Kenya to meet its growth aspirations in an inclusive and climate-resilient manner. The three multisectoral action areas are: managing water, land, and forest for climate-resilient agriculture and rural economies; delivering people-centered resilience with climate-informed basic services and urbanization; and strengthening Kenya’s competitiveness in international markets through shifts in energy, transport, and digital systems. It is necessary to complement these the three action areas with two crosscutting actions areas - improving integration and coordination of climate action in policy, planning, and investment decision-making across the economy, and developing and operationalizing policy measures for mobilizing climate finance from private and public sector. Implementing these action areas should account for regional differences to climate risk exposure.Publication Digital-in-Health(Washington, DC: World Bank, 2023-08-18)Technology and data are integral to daily life. As health systems face increasing demands to deliver new, more, better, and seamless services affordable to all people, data and technology are essential. With the potential and perils of innovations like artificial intelligence the future of health care is expected to be technology-embedded and data-linked. This shift involves expanding the focus from digitization of health data to integrating digital and health as one: Digital-in-Health. The World Bank’s report, Digital-in-Health: Unlocking the Value for Everyone, calls for a new digital-in-health approach where digital technology and data are infused into every aspect of health systems management and health service delivery for better health outcomes. The report proposes ten recommendations across three priority areas for governments to invest in: prioritize, connect and scale.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.