Thursday, June 17, 2021

Kenya to be fastest growing SSA economy in 2021 – World Bank

Kenya’s economy is expected to rebound relatively quickly in 2021, lifting real Gross Domestic Product (GDP) by 6.9 per cent, the highest in Sub Saharan Africa, the World Bank has reaffirmed. 

The growth, according to the global lender, will be boosted by the resumption of activities in the education sector, giving warmth to beneficial sectors like transport, manufacturing and agriculture whose growth was equally muted by the effects of Covid-19. 

Rwanda’s economy is expected to rebound to 5.7 per cent this year from negative 0.2 per cent , becoming the second-fastest growing economy in SSA followed by Tanzania and Ivory Coast with are expected to rebound to 5.5 per cent.

The two economies, however, defied the virus to record positive growths in 2020. Tanzania did not impose strict Covid-19 measures, allowing local business activities to run as other countries shutdown. 

The positive growth projection is good news to the country that sunk to negative growth in June for the first time in 20 years, with companies closing, millions rendered jobless after a near-global shutdown to tame the spread of the virus that has since claimed over 1500 lives since mid-March.

Kenya’s economy contracted by 0.4 per cent in the first half of 2020, compared with an expansion of 5.4 per cent a year earlier.

This saw the unemployment rate increase sharply, doubling to 10.4 per cent in the second quarter.

About 1.72 million workers lost jobs in three months to June when Kenya imposed a coronavirus-induced lockdown that led to layoffs and pay cuts.

Data from the Kenya National Bureau of Statistics (KNBS) shows the number of people in employment fell to 15.87 million between April and the end of June compared to 17.59 million in the previous quarter.

On Monday, the global lender said the global economy will expand four per cent this year, assuming an initial Covid-19 vaccine rollout becomes widespread throughout the year.

”A recovery, however, will likely be subdued, unless policymakers move decisively to tame the pandemic and implement investment-enhancing reforms,” World Bank said in its January 2021 Global Economic Prospects.

The lender said that although the global economy is growing again after a 4.3 per cent contraction in 2020, the pandemic has caused a heavy toll of deaths and illness, plunged millions into poverty and may depress economic activity and incomes for a prolonged period.

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