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Tourism, Manufacturing and Agriculture Listed Key Drivers of Economic Growth

  Dec 1, 2017
 

Almost a decade since its inauguration (2008 – 2018),  Director General – Dr. Julius Muia, and Director, Macro and Economic Pillar, Veronica Okoth, shared reflections on Vision 2030’s deliverables, successes, challenges and its set path in forging the country into greater economic strength with Business Journalists across the country during the monthly Business Journalism Public Policy dialogues hosted by Strathmore Business School’s Center for Business Journalism and the Business Advocacy Fund.

Vision 2030’s Director General Dr. Julius Muia expressed confidence in Tourism, Manufacturing and Agriculture as the three most feasible sectors for driving Kenya’s economic growth despite dwindling and stunted economic performance witnessed across the three sectors.

The manufacturing and tourism sectors’ economic performance has deteriorated over the last decade, 2007 – 2017. The manufacturing sector experienced a drop from 20.45% contribution to GDP in 2007 to 15.75% in 2017, whereas tourism experienced a similarly sharp decline from 7.03% in 2007 to 2.39% in 2017. In response to this, Dr. Muia expressed optimism in the performance of the sectors, “we are establishing special economic zones which will be crucial in suitably positioning the manufacturing sector for exports. Vision 2030 has identified three economic zones in the coastal region and one in Kisumu. We have also engaged countries such as Singapore in establishing the special economic zones Act. We are also aware of the potential of Tourism in the growth of our country and we are working towards being one of the top 10 long haul tourist destination offering high-end, diverse and distinctive visitor experience.”

Agriculture contributes 24% of Kenya’s GDP, accounting to 78% of the total number of employment as a nation. The sector also contributes 65% of the country’s total exports. Agriculture has been a great pillar of the country’s growth, despite natural disposition which might have not been in favor of the practice, “although we are an Agricultural economy, only 15% of the country is suitable for Arable farming, which indicates that we have been working against nature. We have the potential to make much more from the sector if only we could realize the full potential of mechanization and leverage on technology,” said Dr. Muia. The Agricultural sector has grown exponentially since 2007 where it contributed to 42% of the country’s GDP to currently contributing 62%.

Other key sectors such as the Blue Economy and Mining are expected to demonstrate a turn-around in their economic performance in the coming years. The petroleum and mining sector contributed 1.42% of the country’s economic growth in 2017, a slight growth as compared to its contribution of 1.39% in 2007. Although the sector has illustrated growth, institutional frameworks have been a great challenge to realizing its potential. “When we were mapping out the key sectors to bank on in realizing a 10% GDP growth p.a, we came to the realization that the Petroleum and Mining sector’s Act had not been revised since 1940! No wonder it was performing poorly. We have worked with the subsequent governments to ensure that the sector is set on its proper growth path. The Mining Act of 2016 is a great testament to this,” explained Dr. Muia.

Despite of Kenya’s turbulent and uncertain political landscape in 2017, the country has demonstrated remarkable stability, as illustrated by a steady 5.1% growth.  Even though this falls short of the country’s economic growth projection of the year, which had been approximated to 5.9%, a stable growth has been experienced across the country’s economic drivers. 

“After independence Kenya adopted a clear market economy. This implies that our economy is not only integrated but also diversified.  Diversification of our economy is one of the critical elements that continue to support the stability of the county’s economic growth.  This has been achieved through the separation of political influence with economic deliverables,” said Dr. Muia.

Kenya is the 5th largest economy in Sub- Saharan Africa, 9th in Africa and she contributes 45% of East Africa’s GDP. The country has also witnessed a reduction in Inflation for the past 5 years, with the country’s macroeconomic indicators remaining fairly stable and with a consistent GDP growth rate.

Kenya’s Vision 2030 is the basis of the country’s development planning, elaborating the role of key players in its implementation: The Government as a creator of an enabling environment and the private sector as the engine of economic growth. “Through the medium term plan goals, we have been able to witness remarkable success in achieving our overarching goal of a globally competitive and prosperous nation with a high quality of life. In 2014, Kenya earned the Lower Middle Income status and we are working towards realizing the country’s goal to attain the Upper Middle Income status by sustaining an economic growth of 10 – 12% p.a for most of the next 20 years,” remarked Veronica.

Vision 2030 currently accounts for 182 flagship projects, with the economic pillar contributing to 36, 76 in the social pillar, 6 in the political pillar 6 and 64 in the Enablers and Macro pillars.



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