Analysts, business leaders and bureaucrats say 2016 will be significant to the economy despite expressing mixed sentiments.
Government officials talk of a better 2016 largely on planned increased State expenditure on big projects, recovery in tourism and reforms in the public sector while experts on the other hand, dim hope based on trends and numbers today.
Business leaders are optimistic but with reservations based on their last year experience. All in all, however, all agree that 2016 will be a significant year for the economy and business in the country.
Here are excerpts from some of those surveyed by the Nation.
The National Treasury Cabinet Secretary Henry Rotich
“2015 and the past two years or so was a challenging period for us both externally and domestically. Global growth was lacklustre with weak recovery in advanced economies, falling commodity prices, and generally weaker currencies.
On a regional front sub-Saharan Africa, growth suffered on the back of these developments.
Here, we faced additional challenge of insecurity that weakened our tourism sector. But even with these challenges, we managed to grow our economy well above 5 per cent, at the time when many economies in the world and in the region revised their growth rates downwards. For instance SSA average growth was revised downwards to 3.7 per cent in 2015 from just over 4 per cent by the International Monetary Fund (IMF).
Our growth benefited from continued infrastructure spending, strong investor confidence, and delicate balancing of our fiscal and monetary policy management.
Looking ahead in 2016 and near-term, our economy will remain resilient and we should see our economy growing by at least over 6 per cent on the back of favourable weather, recovery in tourism, and continued strong investment as the business environment improves.
Completion or near -completion of several infrastructure projects initiated by the Jubilee administration including the standard gauge railway, should accelerate growth.
We will continue to be prudent in our fiscal programme ahead of the General Election in 2017. In sum, I am sanguine about our growth outlook and that key jubilee programmes will be attained. Our next budget policy statement 2016 to be released shortly will elaborate on the basis of this outlook.
Kenyans should remain optimistic as the underlying economic conditions continue to be solid. Indeed, investor interest in the country remains high as foreigners continue to rank Kenya a critical investment destination.”
Cabinet Secretary, Ministry of Transport and Infrastructure, James Macharia
“I am certainly very optimistic going into 2016, and for good reasons. First, the momentum generated in 2015 when Kenya was favourably placed in the global arena has created multiple thrusts in many sectors of the economy.
With the successful high profile State visits and conferences, the hitherto negative perception on our security has been reversed or mitigated.
Hence, we are now seeing an influx of tourists, top-notch investors, enhanced relations with development partners, return of skilled Kenyans from the diaspora etc.
All these developments will accelerate economic prospects.
Secondly, the key flagship projects, which were launched in 2013/2014 are now taking shape.
These include the ones that were conceptualised during the presidential retreat of January 2014 at the Mt Kenya Safari Club. With regard to my sector, we intend to realise significant milestones on projects with high impact on the economy and wellbeing of Kenyans.
For example, we shall complete the track laying for standard gauge railway by December 2016 and then complete other SGR works by May 2017.
This will have a huge impact on GDP, even before the completion of the project i.e local businesses are expected to contribute up to 40 per cent of all supplies whilst more than 50,000 Kenyans are/will be employed either directly or indirectly by the project.
Further, we shall be investing heavily in other infrastructure projects, including roads, seaports, airports etc.
Thus, collectively, these projects will materially impact our economy.”
Kakamega County Governor Wycliffe Oparanya and also Council of Governors’ Finance Committee chair
“The economy of the country looks bright so long as corruption is fought.
Corruption has given Kenya a bad image and because of that investors who wanted to come to our counties in 2015 recoiled in fear.
War on corruption is an area that the national and county governments should concentrate.
Security has also been a major issue in the arid and semi-arid areas. These two if not well addressed in 2016 will definitely affect our economy.
The fact that we are also approaching the General Election, we might see distortion in expenditure patterns. 2016 is time for the Transition Authority to transfer all functions to the counties and also time for Treasury to address the irregular flow of funds to counties which has made it very difficult to plan.”
Kenya Association of Manufacturers Chief Executive Phyllis Wakiaga
“We want to see small and medium enterprises playing a more prominent role in the export arena. This is what we commit to in 2016 as we endeavour to drive the recently unveiled Kenya Industrial Transformation Programme.
Kenya Private Sector Alliance CEO Carole Kariuki
“There were some tough times in 2015 but also the business environment really improved when you look at the ranking of the country.
It was, therefore, not all gloom as there were quite some reforms in the business environment.
We hope this continues in 2016 with the implementation of the companies Act, Insolvency Act, Business Regulations Act.
If we keep that moment in terms of reforms and implementation of those acts, we will continue to see a lot of improvement.
Business is also becoming more resilient to the political climate, unless there is political violence, business is quite resilient to the political noise and so it should be fine. It will be a good year for business in terms of growth we just have to keep ensuring that nothing changes in terms of momentum on the reforms and ease of doing business.”
Kenya National Chamber of Commerce and Industries Chairman Kiprono Kittony
“The year closes with seriousness on the part of government on the fight against corruption and it is really the time for the private sector to rise to the challenge and meet the government half way to make it a reality.
It is also about time as a country we had a serious conversation about interest rates.
No economy in the world has ever been built on interest rates that average at 20 per cent. The renaissance of SMEs will also be key in 2016.
A lot has been done in terms of policy interventions; it is time to make SME revival a reality. 2016 is also the time to make devolution work. It is equally the time to ensure the additional wealth created in this country seeps through to the mwananchi.”
Senior World Bank Economist John Randa
“Kenya’s growth fundamentals remain strong. Growth is expected to be a solid 5.7 per cent in 2016 from an estimated growth of 5.4 per cent in 2015.
This strong performance will be driven by infrastructure investment. Risks remain significant emanating from a strong dollar which will put pressure on exchange rates and the central banks response level.
A weak shilling will boost exports while high interest rates to cushion the shilling will be disastrous to economic activity.”
Economist and University of Nairobi lecturer Prof Michael Chege
“The shilling may resume its loss of value against the dollar (and other major global currencies) due to the surge in imports, our inability to increase export earnings, and the sluggish growth in tourism.
Government at national and county level will have to cut spending to reduce the public sector deficit running at an unsustainable 10 per cent. That will be really difficult to do as we go into an election year.”
KCB Group CEO Joshua Oigara
“We are optimistic on the economic outlook for Kenya and the EA region in 2016. The economic fundamentals generally look right and stable for better growth in the next 12 months.
Kenya remains a catalytic economy and a strong frontier for the entire region.
It is exciting that the Central Bank of Kenya is well ahead of the curve in terms of economic management and this should give the country a stronger starting point for an even better outlook.
Looking forward, SMEs, agriculture and manufacturing will continue to give impetus to the economy as drivers of growth in the short-term. Kenya’s stature in the international space is fast growing in terms of trade as well as geopolitical clout as seen in the past year when the country hosted several international game-changing conferences and top global leaders.
The country and the East African region now, more than ever before represent what the possibilities for Africa can be in terms of trade and economic influence. We have been viewed as a cornerstone that enables businesses across the continent and globally. 2016 is the year to sweat these accolades.”
Analyst Aly Khan Satchu
“Notwithstanding the fact that 2016 will place us up close to the run-up to the next elections, I am confident that 2016 will surprise to the upside.
Kenya will grow some ways above the sub-Saharan Africa average and I expect a better fiscal position for the Government of Kenya to create a positive feedback loop of better liquidity in the economy. I also expect the shilling to rally into double digits in short order.”
Sterling Capital Investment director John Kirimi
“Barring an unexpected good fortune the depressed conditions in the economy currently prevailing may continue into 2016. Low commodity prices, high interest rates, below normal performance by companies, and the nearing General Election will all dampen growth prospects.”
Safaricom CEO Bob Collymore
“I am broadly optimistic about the continued growth prospects for the communications sector especially in data and mobile money where we continue to see increased appetite for more sophisticated use of this service.
The business community will also be keenly watching the political arena for anything that may undermine investor confidence and economic growth in the run-up to the 2017 elections.”
Keroche Breweries CEO Tabitha Karanja
“The economy in 2015 has been tough with people talking about their struggles but we hope for the best in 2016 because there is nothing else we can hope for.
As a company we hope we can grow our market share. We want to expand the capacity of our brewery and we are hoping by the end of 2016 we can hit the 20 per cent market share we have been aiming for.
We also hope the common mwananchi can afford the basic requirements.”
Devki Group chairman and founder Narendra Raval
“2015 saw major leading companies post losses in the balance sheets mainly because of foreign exchange.
2016 being one year before the general election will see investors complete their projects.
They will, however, think twice before starting out new big projects. I see 2016 generally as a good year for business.
It will not be a smooth ride for any business but business people will generally be cautious because of the foreign exchange losses experiences in 2015.
It will be a slow and steady year for the economies in East Africa.”
Founder and CEO of Rendeavour, the majority shareholder in Tatu City, Mr Stephen Jennings
“The outlook in Africa is good in 2016 relative to the West and other parts of the world. I think the opportunities in the Kenya and other parts of Africa are good.
I think the President is committed in modernising Kenya. For people who have a medium term perspective the opportunities are very exciting.
The looming election will not affect committed long term investors as they see through the election cycle and their investment behaviour is not affected by it.”
Nakumatt Holdings, Regional Director, Operations and Strategy, Thiagarajan Ramamurthy
“At Nakumatt Holdings, we are eagerly looking forward to the prospects ahead in 2016 with an estimated 12 per cent growth projection.
We shall be attaining a key milestone as we hope to clock 60 branches across east Africa by end of February setting us on course for a 100 branch network within the next three years.
From an economic perspective, we are optimistic that this might be the year the regional governments formulate a retail sector development policy to guide the growth of the retail and wholesale economic sector.
All indicators, are also clear that 2016 will be a better year, than 2015 in as far as sales projections are concerned.
Internally, we are sparing no effort to deliver a superior customer experience. We’ve also noted a renewed level of customer confidence and support by county governors here in Kenya, which will go a long way in facilitating county level expansion for Nakumatt.”
Savannah Cement MD Mr Ronald Ndegwa
“All indications in the building and construction sector show that 2016 will be a good year for Savannah Cement. We have plans to invest heavily in our production capacity, supply chain and marketing to enable us meet the local and regional demand.”
Kenya Orient Managing Director Mr Muema Muindi
2016 is a pivotal year in insurance business’ evolution and especially entry of banks as agents. They have big data on customers and a wide national branch network. Oil and gas, growing livestock insurance and innovation will surely drive the business forward.”
AAR Managing Director Caroline Munene
“We are positive 2016 will bring improvements on growth and profitability. The regulatory and macro environment is conducive for insurance business.
CIC Group Strategy and Marketing GM, Mr Joseph Kamiri
“We undertook a customers’ study on the Kenyan market and we now understand what each segment needs. We have come up with innovative products that meet these needs. 2016 will be a great year for all Kenyans and especially the insurance industry.”
Brookside Dairy Director of Milk Procurement John Gethi
“We are optimistic that 2016 portends good tidings for the dairy sector as more farmers have embraced commercialised dairy farming with some taking up livestock insurance. More milk needs to be sold to processors so as to boost government revenue and safeguard public health. The dairy sector will, nevertheless, continue to be a key driver in turning the wheels of the economy in 2016.”
Kenya Private Sector Alliance Foundation Chairman Patrick Obath
“Going forward, our members must join hands in improving the environment they operate in by being socially responsible- tax compliant, participate in community development agenda. This will promote sustainable inclusive business in 2016.”
earl Dairy Chief Executive Atul Chatruvedi
“Kenyans have a great appetite for milk products and 2016 can only be better since more and more people now consume processed milk that ensures their health is not only boosted but the milk bought from the shops is wholesome.”