TAG: Kenya
The year 2017 was a challenging one for Kenya’s economy, which reported a GDP growth rate of 4.9% – its lowest since 2013 – according to the Kenya National Bureau of Statistics. Dropping from 5.9% in 2016, the slowdown of GDP growth can be attributed to a number of factors, including protracted elections, severe droughts, as well as a deterioration of credit growth in the private sector.
While numerous factors have contributed to Kenya’s declining GDP expansion rate, one of the main reasons is the slowdown in private sector credit growth as a result of the interest rate cap introduced in 2016. In the inaugural OBG Business Barometer: Kenya CEO Survey, 89% of CEOs say that the newly imposed interest
rate cap has made it more difficult or much more difficult to access credit. Despite this, overall sentiment about Kenya’s economic outlook remains positive, with 75% of respondents saying that it is likely or very likely that their company will make a significant investment within the next 12 months.
As the largest economy in the EAC, Kenya is a major player in both the region and sub-Saharan Africa as a whole. Over the past few decades, its market has transformed from being largely agrarian into one of the most diversified and innovative on the continent. It was sub-Saharan Africa’s fifth-largest economy in 2015, ranked 11th in inbound foreign direct investment and is one of the few countries in Africa that is not primarily dependent on extractive revenues.