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Running on one Engine Kenya’s uneven economic performance with a special focus on the port of Mombasa

Running on one Engine Kenya’s uneven economic performance with a special focus on the port of Mombasa . World Bank Economic Team Presentation by Dr. Wolfgang Fengler. Press Briefing Norfolk Hotel Nairobi, June 3, 2010.

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Running on one Engine Kenya’s uneven economic performance with a special focus on the port of Mombasa

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  1. Running on one EngineKenya’s uneven economic performance with a special focus on the port of Mombasa World Bank Economic Team Presentation by Dr. Wolfgang Fengler Press Briefing Norfolk Hotel Nairobi, June 3, 2010

  2. Kenya is recovering - slowly but surely. For 2010, the World Bank is revising its growth forecast upwards to 4.0 percent. For 2011, we project 4.9 percent, if no shocks occur. • However, Kenya is running on one engine.Over the last decade growth has been imbalanced, predominantly driven by domestic consumption fuelled by imports. Exports have been weak and non-tradable sectors, such as services and construction have performed strongly. • The Infrastructure deficit constrains exports and the port of Mombasa is still under-performing. Despite some improvements, port reforms have not kept up with the momentum in other African countries. It still takes 20 days to bring a container from Mombasa to Nairobi. This is longer than to ship the same container from Singapore to Mombasa. Main messages

  3. Recent Economic Developments and Outlook for 2010

  4. Kenya’s economy is recovering – slowly but surely…

  5. …but lags behind growth in East Africa

  6. Services have been the drivers of growth in 2009, agriculture contracted again

  7. … and Kenya’s ICT revolution continues: 20 mn phone connections; 4 mn internet connections

  8. Macroeconomic management has been strong: Inflation and interest rates declined sharply since 2008

  9. Fiscal deficits have been lowFor FY 2009/2010, the deficit only reached 4.9% by April 2010…

  10. … and the fiscal stimulus will not be fully implemented: 57% disbursement after nine months

  11. Kenya Running on one Engine

  12. Kenya’s share in world trade has been declining sharply since 1970

  13. The pattern of consumption-led growth and weak exports has been building up for a decade

  14. Consumption has led Kenya out of the crisis in 2009 - net exports remain negative

  15. The current account deficit remains large and is financed by a strong capital account…

  16. ...which is driven by short term flows

  17. Ave. Over the last decade, non-tradable sectors have performed best Percent

  18. Manufacturing has been overtaken by transport & communication and wholesale & retail trade

  19. The Port of Mombasa

  20. Singapore ships 50 times more goods than Mombasa

  21. 94 percent of Mombasa goods go to Kenya and Uganda

  22. At the port, dwell time has been reduced, however, ...

  23. .. it still takes 20 days to bring a container from Mombasa to Nairobi 3.7 days 18.3 days

  24. … and Kenya is lagging behind in the implementation of reforms

  25. Key reform issues

  26. Thank You http://www.worldbank.org/ke For more information on this report and the World Bank’s Economic program in Kenya, please contact Wolfgang Fengler (wfengler@worldbank.org), Jane Kiringai (jkiringai@worldbank.org) or Andrew Roberts (aroberts@worldbank.org)

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