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Economic
Kenya’s economic growth expected to slow down in early months of 2023 due to the continued drought conditions in the country. Nonetheless, on a positive note, Morgan Stanley removed Kenya from its ‘dislike rating’ an indicator the economy is gradually rebounding. Thus, growth expected to accelerate in late 2023 and all through 2024-27, supported by structural reforms.
However, a current-account deficit and a large external debt stock exposes Kenya to balance-of-payments stresses, if access to external financing continues to deteriorate. However, the current account deficit is narrowing. Inflation and Forex expected to peak between February-May period and ease all through the rest of 2023.
The current drought has had significant impacts on agriculture, which is a significant contributor to Kenya’s economy. When there is a shortage of water, crops may not grow properly or they may not grow at all, which can lead to lower crop yields and lower income for farmers. This, in turn, can lead to reduced economic activity and slower economic growth besides has contributed to higher food prices. The devastating effects of drought have a huge negative towards economic growth of the country which is highly reliance on agriculture and livestock husbandry.
It is important for the Government of Kenya to take cognizant and swiftly act to mitigate the effects of drought, such as investing in water storage and distribution infrastructure, promoting drought-resistant crops, and providing support to farmers and communities affected by the drought. By taking these steps, the government can help to reduce the impact of drought on the economy and support sustainable economic growth in the future.
Kenya is indeed a major exporter of black tea, and the tourism industry, including wildlife tourism, is an important contributor to the country’s economy. However, Kenya is still vulnerable to global economic undercurrents and having a diversified economy does not necessarily protect the country from economic shocks.
The global economic slowdown due to the COVID-19 pandemic has had a significant impact on Kenya’s economy, despite its efforts to diversify its economy. The tourism industry, which was already facing challenges due to travel restrictions and a decrease in international travel, was severely impacted by the pandemic. But notably the Kenya’s tourism is gradually coming back to life. Additionally, the disruption of global trade and supply chains due to the pandemic has also had an impact on Kenya’s exports, including its tea exports.
In conclusion, having a diversified economy can provide some level of resilience and can help to mitigate the impact of economic shocks, but it is not a guarantee of immunity from global economic undercurrents. Kenya, like any other country, is still vulnerable to the effects of global economic trends and events, and it is important for policymakers to remain vigilant and take proactive measures to ensure the stability of the economy in the face of these challenges.
Kenya can improve its food security, reduce poverty, and spur economic growth. Agriculture is a critical sector in many developing countries, including Kenya, as it can provide livelihoods for a large portion of the population and contribute to overall economic growth and development. By investing in agriculture and supporting farmers in input subsidies, fertilizers and certified seeds, Kenya can improve its food security, reduce poverty, and drive economic growth.
Security
Terrorism threats are high in Kenya, Somalia, and Tanzania. In Kenya the threat of a terror attack in its cities is high. The Al-Qāeda branch in Somalia, Hãrakat àl-Shâbaab al-Mujāhidīn plans to conduct attacks targeting public places frequented by both foreigners and locals, particularly the wealthy and those who work for Government of Kenya.
A threat of an attack by the Al-Qaeda rival Islamic State’s Terrorists Organization is also not dismissed. Kenya deployed troops in Beni, Eastern DR-Congo where ISCAP terrorists operate. The Kenya QRF under MONUSCO is viewed by ISCAP as Nairobi’s counter offensive against it and could retaliate like observed in Uganda in the recent past. Dozens of Kenyans are members of the terror group in DR-Congo.
The United States through its Embassy in Nairobi flagged high traffic areas frequented by foreigners and tourists in Nairobi and elsewhere in Kenya as target for the terror groups.
Terrorist groups could attack with little or no warning, targeting hotels, embassies, restaurants, malls and markets, schools, police stations, places of worship, and other places frequented by foreigners and tourists. Britain, in its periodic updates on travel advice cautioned its nationals to be extremely vigilant in the areas mentioned in the US advisory.
Locations frequented by US citizens and other Westerners continue to be attractive targets to terrorists planning to conduct attacks. This information highlights the importance of staying informed and aware of the latest security warnings and advisories, particularly when traveling to high-risk areas. Travelers should exercise caution and be vigilant at all times, especially in crowded public places and tourist hotspots.
Banditry attacks have been a growing concern in Kenya in recent years. The acts of robbery or theft especially cattle rustling are carried out by armed individuals or groups, often in rural or isolated areas. These attacks are becoming extremely dangerous and disruptive to the local communities of Samburu, Pokot, Baringo, Turkana and Marsabit leading to loss of property, injury, and in some cases, loss of life.
The Kenyan government need to take firm action, upscale measures to curb the incidence of banditry, including increased patrols and deployment of security forces, but the problem continues to persist. It’s important for communities to work with law enforcement agencies to report any suspicious activities and for individuals to take steps to protect themselves, such as avoiding travel in isolated areas and being vigilant when in rural communities.
Political
The country slipped back to unnecessary divisive political mood with both the ruling party and the opposition engaging in public political rallies. Raila Odinga continues to dispute the results of the 2022 General elections claiming that he won yet the IEBC and the Supreme Court ruled that indeed he lost.
Odinga’s political adventure threatens the current good political weather and will hurt the shillings stability as investor confidence on the country sociopolitical and Economic weather shrinks.
Political experts believe that the eerie similarities between current political rallies and those following the 2017 general elections serve not only to pacify Raila Odinga’s political base but also to distract the Kenya Kwanza government. In an attempt to remain relevant, the opposition Chief has line-up a series of rallies. However, NCIC has continually warned opposition of these rallies which if unchecked could plunge the country in protests and chaos.
Kenya’s President Ruto held bilateral talks with his Eritrean counterpart, Isaias Afwerki who was on a 2-day official visit in Nairobi. Kenya and Eritrea agreed to permanently scrap visa requirements for their citizens in a concerted move aimed to catalyse the two countries economic transformation.
The two countries agreed that there exists huge trade and investment potential between them that calls for structured collaboration. They cited renewable energy, water management, agriculture, transport, security, tourism, sports mining, the blue economy and education.
As at 2020, the trade volume between Kenya and Eritrea stood at Sh73.4 million as compared with Sh257 million in 2015. President William Ruto underscored the opportunity between the two countries in trade is enormous.
This, President Ruto noted, has paved the way for cooperation for regional peace and development. On his part, President Afwerki noted that Eritrea was committed to taking measures that facilitate the deepening of economic, social and cultural relations with Kenya.
