Let’s take advantage of good economic outlook

The Kenya National Bureau of Statistics yesterday released the 2016 Economic Outlook survey findings that portrays an economy on an upward trajectory.

This is encouraging because the global economic outlook has remain remained grim.

The economy grew by 5.6 per cent in 2015 compared to 5.3 per cent in 2014; malaria, which the World Bank estimates surpresses GDP growth by nearly 1.3 per cent was down to 20,691 cases; credit to manufacturing sector stood at Sh290 billion, the highest ever.

Yet despite that, the economy is not out of the woods yet. Because though this growth translated in the creation of 841,600 jobs, most of this (84 per cent) were in the informal sector (building and construction and agriculture) and therefore, the real impact is minimal.

It is the decline in traditional economic engine drivers like tourism, coffee and maize that is worrying. Tourism and maize was down by nearly Sh4 billion each in 2015 largely because of insecurity and poor prices.

Meanwhile, the cost of living is prohibitively high for the lower cadre of the salaried and a modest growth of 0.3 per cent doesn’t mean much to them.

It might be too early to assess the impact of devolution on GDP growth. Unfortunately, most of the money earmarked for development ended up paying salaries and allowances for employees as well as covering other recurrent expenditure while most of the counties are yet to devise better ways of maximising revenue collection.

But evidently, there is room for improvement. We should consolidate the gains made so far and most importantly, take advantage of the drop in international oil prices and adapt austerity measures to limit redtape and wastage in public service. At about $40 per barrel, the price of oil has dipped to levels seen last 13 years ago. Because though the reduced cost of fuel and energy led to a 3.5 per cent growth in the manufacturing sector, the impact has not been big enough to spur economic growth.