Kenya’s economy is expected to grow at the fastest pace in 2022 which an election year. A consensus outlook from 14 world-leading banks, consultancies and think-tanks suggests the economy— as measured by gross domestic product (GDP) — will likely grow 5.4 percent in 2022.
This will be the first time Kenya’s economy will record an upswing since the onset of the multiparty political system two decades ago. The growth in Kenya’s economy will be supported by increased expenditure, a projection of global economists suggests.
“This year, GDP is seen expanding at a healthy rate due to a sustained rise in household and capital spending. Solid government consumption and a largely accommodative monetary stance will provide an additional boost,analysts at Barcelona-based FocusEconomics, who compiled the outlook data between January 18 and 23, wrote in a report on Kenya last week.
Although the projected growth signals a depression from the GDP recorded in 2021 which is estimated at about eight percent, it will be the fastest in an election year since the last single-party presidential elections in 1988.
The forecast report has flagged reliance on foreign borrowing to fund infrastructure projects as the biggest downside risk to the outlook. Economists at Moody’s Analytics project a growth of 8.6 percent followed by UK’s Capital Economics (6.5 percent), US’s JPMorgan (6.3 percent), Switzerland-based Julius Baer (5.5 percent) and London-headquartered Euromonitor International (5.3 percent).
However, the consensus growth outlook is lower than Central Bank of Kenya’s 5.9 percent, but higher than World Bank Group’s 4.7 percent outlook in January 2022. Kenya’s real GDP — a measure of economic output adjusted to inflation—has a history of slowing down during election years when firms put investment decisions on hold pending a return to normalcy in the political landscape.
“We have seen election before —and actually saw double elections five years ago — and another one five years earlier and et cetera. CBK Governor Patrick Njoroge said last Thursday.
During the last election in 2017, the Kenya’s economy growth slowed to 3.82 percent from 4.21 percent the year before, while in 2013 it decelerated to 3.80 percent from 4.57 percent, according to GDP figures which have been revised following last year’s rebasing of the economy.
The aftermath of the deadly December 2007 presidential sunk growth to 0.23 percent in 2008 from 6.85 percent, while in 2002 it slowed to 0.5 percent from 3.78 percent the year before.
The same trend was witnessed in 1997 when growth dropped to 0.48 from 4.15 percent, and in 1992 when it contracted to negative 0.8 percent from 1.44 percent on the onset of multiparty elections.
