Kenya's GDP projected to grow by 6.0% in 2024

Kenya's economic outlook for 2024 is looking bright, with the GDP projected to grow by 6.0 per cent. This growth is fueled by key sectors such as services and household consumption, among other factors. To delve deeper into the economic status, progress, and trends to watch out for in the country, CNBC Africa invited Arnold Midung'a, CEO of Blackbow Consult Limited based in Nairobi, Kenya, for an insightful discussion. Midung'a shed light on various aspects impacting Kenya's economy and provided valuable insights into potential strategies to sustain and boost growth. One of the key points discussed during the interview was the government's proactive measures to support economic stability and growth. Midung'a highlighted the government's decision to repurchase the Eurobond earlier in the year as a crucial move. This move helped stabilize the Kenyan shilling, which was facing depreciation against the USD. The unexpected repurchase significantly assisted the economy in the short term, showcasing the government's commitment to financial stability. Additionally, Midung'a suggested that supporting industries like agriculture and horticulture could further enhance the economy by increasing exports and foreign currency inflows. By focusing on key sectors and promoting exports, Kenya can strengthen its economic foundation and sustain growth momentum. Another important aspect discussed was the impact of rising interest rates on access to credit for businesses, especially small and medium-sized enterprises (SMEs). Midung'a pointed out that the Central Bank of Kenya's rate hikes have led to an increase in the cost of credit, making it challenging for businesses to access funding. While the primary goal of raising interest rates was to curb inflation, it inadvertently restricted credit availability, hindering business growth. To address this issue, Midung'a suggested finding a balance that would enable SMEs to access credit easily. By easing credit availability and supporting SMEs, Kenya can stimulate economic activity and align with the projected GDP growth of 4% to 6% for 2024. Furthermore, the discussion touched upon regional business relations, particularly Kenya's ties with Uganda in the oil sector. Midung'a emphasized the long-standing trade partnership between the two countries, with Uganda relying heavily on Kenya for fuel imports. Despite recent tensions over administrative requirements, he expressed confidence in the countries' ability to resolve issues through dialogue and bilateral agreements. The importance of maintaining strong regional business harmony was underscored, emphasizing the need for open communication and collaboration to ensure smooth trade relations. Additionally, the potential impact of the Red Sea oil route conflicts on fuel prices and the East African economy was highlighted. While international interventions are underway to address the situation, continued unrest in the region could lead to fuel price fluctuations and economic challenges in the East African region. In terms of investor confidence and government strategies, Midung'a highlighted Kenya's attractiveness to investors and the successful performance of infrastructure bonds at the stock exchange. The repurchase of the Eurobond and the positive reception of infrastructure bonds reflected investor confidence in Kenya's economic prospects. To further enhance the investor-friendly environment, Midung'a suggested that the government focus on implementing strategies to attract more investments and ensure sufficient reserves to meet external debt obligations. By building a strong investor portfolio and maintaining adequate reserves, Kenya can strengthen its financial position and sustain economic growth in the long run. In conclusion, Kenya's economic outlook for 2024 appears promising, driven by key sectors, proactive government measures, and potential strategies to enhance growth and stability. With a focus on supporting key industries, addressing credit accessibility, fostering regional business relations, and attracting investments, Kenya is poised to capitalize on its economic potential and achieve sustainable growth in the coming years.