World Bank2014-07-182014-07-182008-07https://hdl.handle.net/10986/18927This report focuses on what needs to be done in the next five years to realize a significantly higher growth potential and sustain high growth in Kenya. The challenge before Kenya and the new government is to take the economy to the next phase of development. The report attempts to do this in two ways. First, it applies the insights from the recent empirical work and experience in other high growth countries to Kenya to propose a growth strategy. The strategy, so developed, will validate and likely help sharpen the broad thrust and direction of the ongoing reform efforts. Second, it drills down selectively into certain aspects of the growth strategy to generate a set of specific policy and institutional reforms. The net result is a reform agenda consisting of detailed policy actions that are expected to add up to a well-articulated growth strategy. Apart from influencing government action, the report is also expected to influence thinking about growth in policy circles outside the government. In its analysis, the report draws upon the state-of-the-art thinking on the issues of growth, which is going through considerable rethinking among economists and practitioners. Among several departures from the conventional view, the new thinking shies away from providing prepackaged answers to an economy's problems and emphasizes country-specific analysis instead. Similarly, the focus has shifted from identifying correlates of growth at a macroeconomic level (as in growth regressions), to identifying constraints to growth at a microeconomic level. This report reflects this shift in thinking and draws mainly upon analysis specific to Kenya (such as growth diagnostics and investment climate assessment) to arrive at conclusions relevant to policy choices. This report reinforces the findings of the Vision 2030 document in several areas, adds value in many others, and modifies some. Most significantly, this report agrees with the Vision that tourism, manufacturing, and service sectors based on Information and Communication Technology (ICT) are likely engines for growth. However, this report is much less emphatic than Vision 2030 about the sectors (identified winners and flagship projects) on which government should focus for delivering the aspired growth. The emphasis of the report is instead on generic economy-wide reforms aimed at reducing business costs and improving productivity.en-USCC BY 3.0 IGOACCESS TO CREDITACCOUNTINGAGRICULTURAL OUTPUTAGRICULTUREARREARSAVERAGE GROWTHAVERAGE INTERESTAVERAGE INTEREST RATEBAILOUTSBANK BRANCHESBANKING SECTORBANKING SYSTEMBANKSBENCHMARKBENCHMARKINGBIDBONDSBORROWINGSBUSINESS CLIMATEBUSINESS COMMUNITYBUSINESS ENVIRONMENTBUSINESS PLANSBUSINESS RISKCALCULATIONSCAPITAL EXPENDITURECAPITAL FORMATIONCAPITAL MARKETSCAPITAL STOCKCAPITAL SUBSIDIESCOLLATERALCOLLATERAL REQUIREMENTSCOMPARATIVE ADVANTAGECOMPETITIVE ADVANTAGECOMPETITIVE BIDDINGCOMPETITIVENESSCOMPREHENSIVE STRATEGIESCONSUMERCONSUMER CREDITCONTINGENT LIABILITIESCONTRIBUTIONCORPORATE GOVERNANCECOUNTRY RISKCREDIBILITYCREDITWORTHINESSCURRENCY COMPOSITIONDEBT ARREARSDEBT RATIODEBT SITUATIONDEBT SUSTAINABILITYDEPOSITSDEPRECIATIONDEVELOPMENT STRATEGYDIRECT COSTSDIVERSIFICATIONDOMESTIC BORROWINGDOMESTIC DEBTECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC EXPANSIONECONOMIC LIBERALIZATIONECONOMIC MANAGEMENTECONOMIC OUTCOMESECONOMIC OUTLOOKECONOMIC POLICIESECONOMIC SURVEYSENABLING ENVIRONMENTEQUIPMENTEXCHANGE RATEEXCHANGE RATESEXPENDITUREEXPENDITURESEXPORT GROWTHEXPORTSEXTERNAL DEBTEXTERNAL SHOCKSFINANCIAL EXPOSUREFINANCIAL MANAGEMENTFINANCIAL MARKETFINANCIAL MARKETSFINANCIAL RESOURCESFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL SUPPORTFISCAL DEFICITFISCAL DISCIPLINEFISCAL POLICYFISCAL SURPLUSFISCAL SURPLUSESFIXED CAPITALFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFUTURE GROWTHGDPGDP PER CAPITAGLOBAL ECONOMYGNPGOVERNANCE ISSUESGOVERNMENT DEBTGOVERNMENT INDEBTEDNESSGOVERNMENT INVESTMENTGOVERNMENT INVOLVEMENTGOVERNMENT POLICIESGOVERNMENT SECURITIESGROSS FIXED CAPITAL FORMATIONGROWTH POTENTIALGROWTH RATEGROWTH RATESHEALTH SPENDINGHOUSEHOLD EXPENDITURESHUMAN CAPITALHUMAN DEVELOPMENTINCOMEINCOME GROWTHINCOME INEQUALITYINCOME LEVELINCOMESINDEBTEDNESSINFLATIONINFORMATION TECHNOLOGYINTEREST PAYMENTSINTEREST RATEINTEREST RATE SPREADINTEREST RATE SPREADSINTEREST RATESINTEREST RATES ON TREASURY BILLSINTERNATIONAL TRADEINVESTINGINVESTMENT CLIMATEINVESTMENT CLIMATE ASSESSMENTINVESTMENT HORIZONSINVESTMENT PROJECTSINVESTMENT RATEINVESTOR CONFIDENCELABOR FORCELABOR MARKETLEVIESLOCAL CURRENCYLOW-INCOMEMACROECONOMIC CONDITIONSMACROECONOMIC POLICYMACROECONOMIC RISKMACROECONOMIC RISKSMACROECONOMIC STABILITYMARKET ACCESSMARKET ECONOMYMARKET LEADERSMARKET PRICESMARKETINGMICRO-DATAMICROECONOMIC ANALYSISMOBILE PHONESMONETARY CONTROLMONETARY POLICYNATIONAL DEVELOPMENTNATIONAL EXPORTOPPORTUNITY COSTSPENSIONPER CAPITA INCOMEPOLICY CREDIBILITYPOLITICAL RISKPOLITICAL STABILITYPOLITICAL UNCERTAINTYPRIVATE INVESTMENTPRIVATE INVESTORSPRIVATE SAVINGSPRODUCTIVITY GROWTHPROFIT MARGINSPUBLIC EXPENDITURESPUBLIC FINANCESPUBLIC FUNDSPUBLIC GOODSPUBLIC INVESTMENTSPUBLIC SECTOR DEBTPUBLIC SPENDINGPUBLIC-PRIVATE PARTNERSHIPSREAL EXCHANGE RATEREAL EXCHANGE RATESREAL GDPREAL INTERESTREAL INTEREST RATEREAL INTEREST RATESREMITTANCESRESERVERESUMERETURNRETURNSRISK PREMIUMSALESSAVINGSSAVINGS RATESECONDARY SCHOOLSEIGNIORAGESENIORSKILLED WORKERSSMALL BUSINESSESSMALL ENTREPRENEURSSOLVENCYSTAKEHOLDERSSTOCK DATASTOCKSSTRATEGIC INVESTORSSUSTAINABLE DEVELOPMENTT-BILLT-BILL RATET-BILLSTARIFF BARRIERSTAXTAX COLLECTIONTAX RATESTAXATIONTELECOMMUNICATIONSTOTAL COSTSTOTAL DEBTTOTAL FACTOR PRODUCTIVITYTRADE LIBERALIZATIONTRADE POLICYTRADINGTRADING COSTSTRANSACTIONTRANSACTION COSTSTRANSPARENCYTREASURYTRUST FUNDUNEMPLOYMENTURBAN UNEMPLOYMENTVIRTUOUS CYCLEWAGESWTO10.1596/18927