KENYA’S economic prospects for 2024 are brightening, according to insights from a survey conducted by the central bank. Business leaders also express optimism fuelled by several positive indicators, including the strengthened position of the shilling against major global currencies.
The central bank’s survey underscores that optimism is bolstered by the recent easing of inflation, dropping to a notable low of 5.7 percent in March. Additionally, favourable weather conditions are lending support to agricultural activities, further enhancing economic sentiment.
Global economic dynamics also contribute to the positive outlook, with a reduction in global inflation alleviating concerns amidst ongoing geopolitical tensions, such as the Russia-Ukraine conflict. The survey, unveiled in Nairobi, Kenya’s capital on Tuesday, emphasises the mitigating effect of the conducive internal and global macro-economic environment on business confidence.
Of notable significance is the remarkable strengthening of the Kenya shilling, reaching a year-high against the US dollar, standing at 130 compared to the earlier rate of more than 160 in January. Anticipating further appreciation, the central bank projects the shilling to reach the 120 mark, a development expected to enhance Kenya’s economy by reducing import costs, particularly for commodities like oil.
Moreover, Kenya’s current heavy rainfall, following the El Nino rains experienced in December 2023, is poised to stimulate agricultural production. This climatic boon augurs well for the economy, particularly in the agricultural sector.
Initial forecasts from Kenya’s National Treasury and the World Bank, predicting a 5 percent economic growth for 2024, may be surpassed, analysts suggest. The prevailing favourable economic conditions, coupled with the projected strengthening of the shilling and enhanced agricultural output, hint at a potential economic upturn beyond earlier estimations.