Economists have stated that security is a major determinant as to whether the country will achieve higher economic growth rates.
According to Rich Management CEO, Aly Khan Satchu, the consequence of insecurity is being felt very strongly in the economy.
“I think people on the ground, like myself, are getting a little bit more encouraged. There seems to be much more coordination at the government level and so far we have not had any major incidents,” Satchu said.
However, many Kenyans predicted a mixed outlook in the country’s economic growth. Here is what residents of Nairobi had to say.
“The economy looks good, Kenya has been a big economy despite the challenges that we have. I still believe that Kenya can pull out of these challenges and be able to make a success of 2015,” Solomon Otiato, said.
Another citizen Paul Wafula added, “I believe as time goes on, the government is trying to put everything together to make sure this country is secure, so we should give them time and unite.”
Meanwhile, the East African nation has been experiencing a slump in the country’s second highest foreign exchange earner, tourism. According to industry players, Kenya is staring at losing 40 billion Kenyan shillings in the sector.
Last year, the government revised its economic growth forecast for 2014 to between 5 and 5.5 per cent. The Kenyan government had put the country’s growth at 5.8 per cent in 2014 and 6.4 per cent in 2015.
“Last year obviously it [tourism] was on the floor of travel advisories etc. I do not think there is a silver bullet to turn this around in the very short term. I think it will take another 12 months before we see some recovery. Therefore, for me tourism will remain the soft underbelly of the Kenyan economy in 2015,” Satchu said.
In June, the World Bank cut Kenya’s growth forecast by 0.5 per cent to 4.7 per cent expected in 2014. The bank attributed the forecast cut to drought, insecurity, weak budget execution and tighter global credit.