Kenya's economy to grow at 5.9pct in 2016: World Bank

Kenya's Gross Domestic Product (GDP) is projected to grow at 5.9 percent in 2016, up from 5.6 percent forecast for 2015, the World Bank said on Thursday.

The World Bank's economic report released in Nairobi forecasts the economy to improve further to 6 percent in 2017 due to low oil prices, good agriculture performance, supportive monetary policy, and ongoing infrastructure investments.

"The prevailing global conditions call for a more vigilant policy stance which is supportive of growth," World Bank Country Director for Kenya Diarietou Gaye said during the launch of the Kenya Economic Update (KEU) in Nairobi.

The East African nation experienced strong economic performance in 2015, and has exceeded the average growth for Sub Saharan Africa countries consistently since 2009, the report adds.

However, the report notes that Kenya's economy remains vulnerable to domestic risks that could moderate the growth prospects.

These, the report says, include the possibility that investors could defer investment decisions until after the elections, election related expenditure could result to a cut back in infrastructure spending, and security which remains a threat, not just in Kenya but globally.

The Bank said changes in monetary policy in industrialized countries could trigger volatility in financial markets putting the currency under pressure.

Jane Kiringai, the Bank's Senior Country Economist for Kenya and the lead author of the report, said policy interventions could 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 help increase productivity of jobs in the informal sector.

"Kenya is not short of jobs; it is short of high productivity jobs," said Kiringai, adding that it's imperative to reduce the cost of doing business, which is necessary for a robust private sector to create more and better jobs. Enditem