Kenya’s Economic Growth Beats Expectations But Slows on Drought
The growth rate of the Kenyan economy has exceeded expectations, but drought is slowing its momentum. Despite these challenges, the country’s fiscal consolidation is key to its economic recovery, according to the Associated Press.
Associated Press coverage of climate and environmental issues receives support from several private foundations.
As the world grapples with the impacts of climate change, the Associated Press is stepping up its coverage. A new climate desk will be created to infuse AP’s global news coverage with a more comprehensive approach to the climate crisis. The team will be led by Climate and Environment News Director Peter Prengaman. It will also feature reporters in four countries.
In addition to launching the new climate desk, the AP will expand its environmental reporting in Asia and Europe. The organization plans to hire 20 journalists in those regions. Several private foundations have provided funding to support the expansion of the news organization’s coverage of environmental and climate issues.
The Intergovernmental Panel on Climate Change’s latest report found that Earth’s climate has changed across the entire climate system. Scientists are starting to pinpoint specific details about the impact of global warming. This report calls for strong reductions in greenhouse gas emissions.
Despite the urgency of the climate crisis, many developing nations and emerging economies have resisted international efforts to reduce emissions. However, a loss and damage fund would provide compensation to poorer nations affected by the worst effects of climate change.
Kenya’s economy beats expectations but slows on drought
Kenya’s economy grew a robust 5.8 percent in the first half of 2019. Although its economy has been threatened by a prolonged drought, it has held up well.
In the second quarter of 2019, real GDP growth slowed to 5.2 percent. A key reason for this is that agriculture, which accounts for close to a quarter of the economy, contracted for the fourth consecutive quarter.
The prevailing drought, combined with a global commodity price surge, has aggravated food insecurity in some parts of the country. This is affecting both livestock and crops, leaving millions of people in need of food aid.
In the medium term, the government has planned to boost investment in the agricultural sector and small and medium-sized enterprises. It has also put measures in place to strengthen the governance of state corporations. Meanwhile, the government has increased social expenditure to protect ordinary Kenyans.
Despite the slowdown, the Kenyan economy has remained relatively stable and is predicted to grow by 5.3 percent in 2019. The IMF has projected that the growth rate will continue to pick up in the first half of 2022.
Fiscal consolidation is key to sustaining the recovery
If Kenya is to maintain its economic recovery, fiscal consolidation is necessary. This helps to reduce the country’s debt burden and create conditions for private investment. But a strong recovery requires continued structural reforms and continued support from multilateral creditors.
As a result of the global financial crisis, Kenya was forced to rethink its development and policy strategies. The IMF recommends that the National Treasury sustain its fiscal consolidation efforts. And it encourages a more targeted approach to development spending.
However, recent macroeconomic developments have raised concerns about inflation and the sustainability of public finances. In addition, a deterioration in the situation of war in Ukraine is weighing on global economic recovery. Other downside risks include unsettled global market conditions and a weakened agricultural sector.
The ongoing drought is having a devastating impact on food security. More spending on social programs is needed to alleviate the hardships of affected populations. Moreover, the government needs to improve its financial oversight and regulatory framework.
Africa needs longer timeframes and more financial resources to move towards clean energy
Currently, African nations depend heavily on fossil fuels. However, with new technology and investment, Africa can transition away from a dependency on fossil fuels and move towards clean energy.
The current energy mix in Africa is based on oil, coal, and biomass. While these sources of energy have their advantages, they are not sufficient to meet the continent’s current needs. In order to meet Sustainable Development Goal 7, Africa will need to implement a new energy infrastructure to provide affordable, modern energy to all.
To achieve this goal, Africa will need to mobilize public and private funding. It will also need to implement reforms in the regulatory environment. This includes the need for transparency and accountability.
Until now, Africa has not been able to attract the necessary financing to build energy infrastructure. The problem is compounded by the fact that infrastructure in sub-Saharan Africa is lacking. As a result, individual projects are perceived as risky.
Despite the lack of energy infrastructure, the demand for electricity is increasing. With more efficient technologies, the need for electricity is expected to increase by three percent per year.