Kenya’s Economy to grow 5.3% in 2021 – NCBA’s Projection

NCBA bank has projected Kenya’s Gross Domestic Product 2021 at 5.3%. This is tied to the country’s revive of socio-economic activities.

The bank released its 2021 Economic Outlook earlier this week and the Outlook shows increased activities in key economic drivers. It records an increased 32% in education, 7.3% in construction, 7.7% in ICT, 6% in health and 4% in agriculture. The increase in these sectors’ activities has helped ease the Covid-19 restrictions.

There has also been a noticeable growth although slow in other sectors such as 0.7% in transport and storage, 1.6% in manufacturing, and 2.5% in wholesale, and retail.  

John Gachora, NCBA Bank MD, the growth prospects for the three sectors differ depending on the pandemic’s impact in each, their ability to adapt and policy support. ”Covid-19 vaccination will undoubtedly remain the main economic policy for sustained recovery, complemented by interventions from government and the Central Bank.” Gachora said. 

The economic outlook report further mentions that Covid-19 vaccination is crucial in attaining a strong, sustainable, and inclusive growth. Thus, the availability of the vaccine could help boost the economy’s confidence as the year progresses.

The report however notes that the government might not be able to achieve a good percentage of vaccination coverage. Although the government has allocated 14.3 billion towards vaccination, the report shows that the government might only cover 7.5% of the population this year and this is with the assumption that vaccine production and distribution increases in the second half. Meanwhile, the country will be subjected to periodic lockdowns, which may be clustered.

The lender forecasts growth to range from 7.6% in a more optimistic scenario to 3.2 percent in the worst-case scenario. This underlines the pandemic’s ongoing uncertainty and emphasizes the need for government flexibility and support.

The NCBA’s forecast is pessimistic when compared to the CBK’s and the International Monetary Fund’s (IMF)’s, which predict 5.9% and 6.3 percent growth, respectively.