Why Kenya Has Great Economic Potential
The opportunity in Kenya and Africa is greater than anywhere else in the world today. I believe that over the coming decade, many African countries, Kenya included; have the potential to outpace the growth witnessed in Asia in the past decade.
To illuminate this point, we could draw parallels between Africa and Asia. In the 1960s, Asia was widely considered an overpopulated, politically backward, war-ravaged basket case. It is hard to imagine, for instance, that in 1970, China’s per-capita GDP was less than that of most African countries.
Africa is now rapidly regaining ground lost over the decades. This new momentum, charted in detail in The Fastest Billion, Renaissance Capital’s new book on Africa, will completely transform the continent, as has happened in Asia.
Indeed, Kenya’s time has arrived; the country is undergoing the same kind of transition seen in many countries in Asia over the past 30 years. Kenya, like other promising African economies, is in a virtuous cycle of development – a cycle characterised by the emergence and growth of a thriving, increasingly affluent middle-upper class that is more assertive and thus pushes for better policies.
Kenya has a clear opportunity to evolve into a middle-class economy in the next 25 years. In addition to capitalising on the broader economic revolution in Africa, the country benefits from strong agriculture and tourism sectors. It also enjoys the strategic advantages associated with its position as a natural hub in what is one of the world’s most dynamic regions.
Kenya’s path towards democracy under a new constitutional dispensation will give it a strong institutional framework to achieve political, social and economic progress under the country’s Vision 2030 initiative.
However, the range of potential economic and social outcomes is still very wide for Kenya, and this will depend fundamentally on the stability and quality of governance. This, in turn, will determine whether the country realises its potential to become a middle-income country.
That Kenya fell three places to 109 in the World Bank’s latest Ease of Doing Business Index while Rwanda rose five places to 45 tells you how much potential there is – but also how great the challenges are.
Sustaining the momentum will be an essential component of strengthening Kenya’s status as the regional economic hub.
By Stephen Jennings. Mr Jennings is co-founder and CEO of Renaissance Group.
This article was originally published on Business Daily Africa.
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