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Political stability key to economic growth

Friday April 26 2019

EDITORIAL
By EDITORIAL
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Kenya’s economy registered a fairly decent growth last year, despite a shaky start arising from the tumultuous elections of 2017. The Economic Survey released Thursday presents a rather positive outlook for the year, with a Gross Domestic Product (GDP) growth of 6.3 per cent, a noticeable shoot from 4.9 per cent the previous year.

Agriculture remains the economy’s mainstay and together with transport and manufacturing, were drivers of the growth. Tourism, which has recorded mixed results across the years, was equally on the growth trajectory, raking in Sh157 billion in revenues compared to the previous Sh120 billion.

Cessation of political hostilities after the handshake between President Kenyatta and Opposition Leader Raila Odinga in March last year led to stability and created a conducive environment for business and growth. Which is a critical lesson — the county has the capacity to propel itself to greatness, but only in an environment of tranquillity. Conversely, it behoves politicians to cease from fomenting chaos as they are normally wont.

Although 2018 was fairly robust, things look pretty bad this year. The survey projects diminished economic returns arising from depressed rains that feed agriculture; a surge in inflation, which is bound to constrict business and consumption, as well as turbulent fuel prices that have the potential of distorting market structures. These projections should create urgency to seek ways to cushion the country against potential economic pitfalls.

Notwithstanding that, an examination of the implication of the economic data on the lives of the citizens, however, presents a different scenario. For example, the statistics show expansion of employment, from 2.7 million in 2017 to 2.8 million in 2018. Yet, unemployment continues to bite, posing a serious threat to the economy itself.

Whereas the survey reports employment bulge — that some 840,000 jobs were created during the year under the review, careful interrogation of the facts reveals the bulk of these — more than 80 per cent — were in the informal sector, which should not be a subject for optimism because this is a fluid sector and accounting for those it employs and drilling down to their incomes is problematic.

Thus, the economic figures eloquently articulated in the survey are not reflective of the situation on the ground. Many households continue to face starvation, ill-health and unemployment. Insecurity and lawlessness persist. Access to social services, such as education and health, is not guaranteed. Poverty is manifested all round.

On the whole, the country must look at the future through new lenses. It must transit from traditional revenue sources like agriculture to industrialisation that promises predictable incomes. Political stability and good governance are pivotal in sustaining economic progress.

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