Kenya Economic Update, March 2016 : Kazi ni kazi - Informal Should Not Be Normal
This update comes in the wake of three game changing and mutually reinforcing trends. First, monetary policy in the United States (U.S.) will determine the direction of capital flows and currency stability. Second, the persistent decline in commodi...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Nairobi, Kenya
2016
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/03/26148431/kenya-economic-update-kazi-ni-kazi-informal-not-normal http://hdl.handle.net/10986/24001 |
| Summary: | This update comes in the wake of three
game changing and mutually reinforcing trends. First,
monetary policy in the United States (U.S.) will determine
the direction of capital flows and currency stability.
Second, the persistent decline in commodity prices will
determine winners and losers and third, the cooling and
rebalancing of the Chinese economy is likely to see a
recalibration and change in the direction of trade. Kenya’s
growth will depend on the net impact of these global trends
on the one hand and the domestic policy response on the
other. Growth in 2015 is estimated at 5.6 percent, and is
projected to rise to 5.9 percent in 2016 and 6 percent in
2017. The economy has created more jobs in the recent years,
but these are low productivity mainly in the informal
services sector and are not associated with higher value
added. In the next ten years, nine million youth will enter
the labor market, a majority will continue to find jobs in
the informal sector. To improve productivity of these jobs,
policy interventions can be geared towards increasing access
to broad skills beyond formal education, creating linkages
between formal and informal firms, and helping small scale
firms enter local and global value chains. To encourage
private sector growth and create better jobs, the business
environment must improve. Finally, Kenya can leverage the
changes in the global economy to recalibrate its trade as a
platform for structural change and provide the impetus for
higher levels of growth and creation of productive jobs. |
|---|