NCBA PROJECTS KENYAN ECONOMIC GROWTH

Fastest growing Bank projects Kenyan economic growth after COVID-19 disorganisation. PHOTO /CORRESPONDENT

NCBA projects economy to grow by 4.9 percent in 2021

By Douglas Muriithi

NCBA is projecting Kenyan economy to recover upwards of 4.9 percent in

2021 following the tactical reopening of the economy.

In its latest economic outlook, NCBA however warns that recovery will

require bold, innovative and extraordinary actions on the part of

policymakers.

NCBA Bank Group Managing Director, Mr. John Gachora said the economy is

estimated to have contracted in 2020 following a hard and broad-based

hit on output in the second and third quarters due to the pandemic.

“However, looking ahead, there is a reason to be optimistic…the

phased reopening of the economy has seen a return of about 80% of

activity as consumer and labour mobility improves and supply chains are

restored,” said Gachora.

Gachora said the KES 57 billion Post Covid Economic Stimulus has helped

restore activity in some sectors especially construction and minimized

the negative effects on others, with positive GDP spillovers.

“To further repair the damages from the pandemic and avert a prolonged

economic descent, it is essential that the Economic Recovery Strategy

as proposed tactfully addresses the “lives versus livelihoods”

dilemma,” said Gachora.

The lender is recommending for more efficiency in domestic resource

mobilization as well as debt management. Previous public investments

have resulted in a marked surge in public debt estimated at about 70%

of GDP currently.

According to NCBA, Public-Private partnerships will be crucial for

faster, inclusive and sustainable recovery and growth. It further notes

that reducing the barriers to PPPs will unlock immense investments and

in turn support stronger, more sustainable growth.

“This will require bold and accelerated reforms to create an enabling

framework for private sector participation,” NCBA notes.

NCBA noted that the underlying policy framework for PPPs remains weak,

discouraging potential investments. So far, the country has 37 PPP

projects valued at about KShs 500 billion ($5.0Bn) presently. These are

limited to infrastructure in transport and energy.

“The necessary buy in will not only require greater private sector

involvement in the policy development processes but also in the

attendant implementation of related projects,” NCBA concludes.

NCBA Economic Forum was launched in January 2018 with the aim of

bringing together the government and industry stakeholders for candid

conversations meant to spark economic growth.

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