Kenya's Economic Issues

Past, Current and Future Issues
Martin Brown

munenebrown@yahoo.com

0726573459

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Kenya’s Current Economic Status: Important
Statistics
Challenges: Alert! -Threats Vs. Opportunities
Civil Society Actors: Their Role in Economic
Development

Martin Brown


0726573459

Martin Brown


0726573459

Kenya’s poverty head count stands at
43.37 - cut-off point of US$1.25 (KES.
105) per person-(Global Monitoring
Report, 2013)
 Kenya’s economy is projected to grow at
5% in the year 2013.
 Kenya’s external debt stood at US$
9.526 Billion as per estimations as at 31
December 2012.


Martin Brown


0726573459

Labour Force (2012 est.: 18.89 Million)

Industry &
Services
25%

Agriculture
75%

Martin Brown


0726573459

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With the labor force mentioned in the
previous slide, unemployment in Kenya
stands at about 42%.
Of the total unemployment, youth
unemployment constitutes 70%

Martin Brown


0726573459

Kenya's Imports Vs Exports (in Billions: 31 Dec 2012 est.)

$5.94

$14.39

Imports
Exports

Martin Brown


0726573459

GDP: Composition by Sector
Agriculture

Industry

Services

24%

15%

61%

Martin Brown


0726573459

 Kenya

faces various challenges
and/or threats that could hinder her
economic growth. Opportunities
can also be identified amidst such
challenges.
 Some of these challenges are
unique, others are not.
Martin Brown


0726573459

 Devolved Government:

 The system (if well implemented)

is likely to bring unseen benefits to
the Kenyan economy, with each
county being a big unit of
economic growth.
Martin Brown


0726573459

 Oil Deposits:

 The discovery of oil in some parts

of the country presents an
opportunity (if the deposits are
commercially viable and Kenya
develops a port and pipeline for oil)
for Kenya to balance its growing
trade deficit.
Martin Brown


0726573459

 Peaceful Elections

 The just concluded elections were

relatively calm (unlike in 2007
polls, after which Kenya’s economy fell
by 5.4%age points- from ). The
peaceful transition to the new regime
is an opportunity for Kenya to grow
both her democracy and economy all
at the same time.
Martin Brown


0726573459

 HighYouthful Population

 Kenya’s ‘youth bulge’ is a potential

‘resource base’ that can be tapped
into for economic growth.
Otherwise, it can be a disaster for
the country’s economy.
Martin Brown


0726573459

 Sound Macroeconomic

Fundamentals:
 Renewed investor confidence
 Stable foreign exchange rates
 Low inflation rates (below 5%)

Martin Brown


0726573459

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Some of the challenges fall into the following
categories:
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Devolution and County Governance;
Youth and Women Empowerment;
Food insecurity;
Urbanization;
Health (read Disease);
Climate Change and Disaster Risk Reduction;
Peace and Security;

Martin Brown


0726573459

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Devolution and County Governance: If
enough caution is not taken, devolution could
go awry and poison the entire economy of
Kenya. Good foundation for devolved system
of governance must be given the attention it
deserves for it to work.
Challenges in terms of the human resource
should be addressed even before the other
resource deficiencies are thought of.
Martin Brown


0726573459

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Citizen engagement and public participation
in governance must be enhanced if
devolution is to work in Kenya.
Social accountability systems must be
developed and improved further to increase
the quality of service delivery and stem
inefficiency and corruption especially in the
public
Martin Brown


0726573459

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Despite the gains made towards this
direction, youth and women remain largely
dependent on the male elderly adults in many
socio-economic dimensions. This is a major
impediment to economic development and
must be addressed.
The girl-child empowerment must not be
relaxed, and youth development must be
scaled up for Kenya to realize her Vision 2030.
Martin Brown


0726573459

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Food insecurity is one of the reasons for the
persistence poverty in Kenya.
Over 20% of Kenyans suffer from food poverty
(entire income is not adequate for purchasing
food) [KNBS household budget survey]
Food prices in Kenya are far higher than in
Germany, and the U.S. ; international sugar
prices are also far lower than those in Kenya.
There must be deliberate efforts towards
enhancing food security. E.g. investing more
resources in arable lands through irrigation;
enhancing research and development;
Martin Brown


0726573459

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Kenya’s urban population is estimated at 22% of total
population (2010)
The rate of urbanization: 4.2% annual rate of change
(2010-15 est.)
Poverty is a major threat to the achievement of MDGs.
Urbanization has been a major force behind poverty
reduction and, therefore, progress towards other MDGs.
It helps pull people out of poverty and thus advances
progress towards the other MDGs.
However, urbanization can also lead to burgeoning growth
of slums, pollution, and crime if not managed well, and
thus compromise economic growth and the achievement
of all the other MDGs.
Martin Brown


0726573459

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Diseases such as HIV/AIDS, TB, Diabetes and
Cancer are becoming more menacing to the
population.
2009 estimates rank Kenya 4th in the world
(after S.A, Nigeria & India) in the number of
PLWHAs
These eat into the productivity of the
country’s labour force
They also add extra economic burden to
already constrained population
Martin Brown


0726573459

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Climate change is a major threat to the growth
of Kenya’s economy.
It has resulted to increased frequency and
intensity of hydrometeorological disasters in
Kenya in the last two and a half decades.
Weather-related shocks (mainly floods and
droughts) have acted negatively on the
economy.
Besides the deaths of productive members of
the labour force, much destruction has been
witnessed as a result.
Martin Brown


0726573459

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A conservative estimation KES. 22 Billion have
been lost in terms of damaged infrastructure
during in just floods in the last two years only.
With the ongoing rains in many parts of the
country, this figure is already too OBSOLETE!
Similar (or even worse) scenarios are likely in the
future, and urgent measures are necessary to
climate-proof our infrastructure as well as
reduce the impacts of drought in Kenya.
Martin Brown


0726573459

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Bearing in mind the critical drivers of economy
and factors towards achieving the MDGs, certain
Counties in the country will play a critical role in
the growth (or otherwise) of Kenya’s economy.
These include (in Rift Valley):
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Nakuru
Narok
Kericho
Uasin Gishu
Trans Nzoia
Turkana

Martin Brown


0726573459

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The Civil Society will play a critical factor in
the growth of Kenya’s economy and
democratic space.
With the devolved system, the PBOs will
provide the very much needed voice in
various sectors and on various issues.
Strengthening of the CSOs to effectively play
this role is an essential step towards
safeguarding and developing democracy and
economic growth in Kenya.
Martin Brown


0726573459

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Whereas the CSOs operate almost all sectors
of the economy, attention must be enhanced
in some critical spheres, including:
 Human
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Rights, Leadership, Democracy and
Governance;
Participatory Budgeting & Integrated Financial
Management (in Public-Private partnerships)
Public Participation in the devolved system;
Socio-economic development (empowerment)
Environment and Natural Resource Management

Martin Brown


0726573459

For Kenya to achieve a sustained high
growth for the remainder of this
decade, there are several determinants.
 The single-most important of these
determinants is:
 Kenya’s capacity to mitigate against
socioeconomic and political shocks.


Martin Brown


0726573459

Muchas Gracias!
Martin Brown


0726573459

Kenya's Economic Issues

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