Kenya is a state in the great lakes region of east Africa; it is bordered by Somalia, Tanzania, Uganda, south Sudan and Ethiopia to the north. It has a population of 43.18 million people. Kenya’s economy is market-based, with few state owned enterprises and maintains a liberal trading system. Its GDP is at $40.70 billion and has a GDP growth of 4.6% as per 2012, with an inflation rate of 9.4%. Kenya is seen to have a well-developed social and physical infrastructure. Kenya is classified as a middle income country capable of servicing its debts, by the World Bank.
According to World Bank and IMF projections the economy is expected to grow at 5.8-6% this year. A significant improvement from the 4.6% GDP growth rate recorded in 2012. According to the Kenya economic update, in the next two years; lower interest rates and high investment will support Kenya’s economic growth. Growth potential is seen in agriculture and manufacturing, while services and ICT are weakening.
Kenya’s vision 2030 is “a national long term development blue-print to create a globally competitive and prosperous nation with a high quality of life by 2030”. It aims to transform Kenya into a middle income country, providing a high quality of life in a safe and clean environment. This vision is anchored on three pillars; economic development, social development and political governance.
Kenya’s economy grew rapidly after independence, through public investment, agricultural production – grew by 4.7% annually - and private foreign industrial investment. The gross domestic product grew at an annual average of 6.6 % in a decade (1963-1973). However there was a decline in its economic performance from 1974, the country’s inward policies combined in the rise of oil prices resulted in a n uncompetitive manufacture sector.
Between 1991 and 1993 Kenya had its worst economic performance yet, agricultural production shrunk and its GDP stagnated. In august 1993 inflation reached a record 100%, and the government budget deficit was over 10% of the GDP. As a result of all these, donors suspended program aid in 1991. Kenya’s parastatals largely inhibited development due to a general lack of expertise and corruption
KENYA AND THE WORLD BANK:
With the assistance of the World Bank Kenya began major economic reforms and liberalization in 1993. The new minister of finance – Musalia Mudavadi – and a new governor of the central bank – Micah Cheserem – began a series of economic measures, supported by the World Bank and the IMF. As a result the government; privatized a large number of privately owned companies, reduced the number of civil servants, eliminated price controls, eliminated import licensing and removed foreign exchange controls. By the end of this Kenya’s real GDP growth averaged at 4%.
Kenya is ranked the third largest borrower of World Bank loans in Africa over the past five years, with Nigeria being first and Ethiopia second. It has received a...