Kenya’s economy will remain top in East Africa
03 December 2015, 10:31
Nairobi - Kenya will remain the regional economic powerhouse in East Africa with a Gross Domestic Product growth (GDP) close to 6.5 per cent in the next three years, an international economic report has revealed. The report by The Institute of Chartered Accountants (Africa Q3 2015) points out that Kenya’s performance of retaining a stable economy in the next three years is clearly spelt out in the Africa Q3 2015 report.
The report, which was released in England and Wales (ICAEW), indicates that Kenya’s growth will be supported by domestic demand and the emergence of Kenya’s middle class whose economic viability is growing faster than earlier projected.
The Africa Q3 report further explains that closer regional integration in the East African Community (EAC) will help drive economic expansion among member states with Kenya being the biggest beneficiary. The EAC Member States are Kenya, Tanzania, Uganda, Burundi and Rwanda while Southern Sudan is on the brink of joining.
According to the report, Nairobi is an emerging global leader in the financial services sector especially in mobile money transfer service, M-Pesa, launched by Safaricom in 2007.
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M-pesa has since then gained global recognition with a wide range of users across many countries such as Afghanistan, South Africa, India and in 2014 to Eastern Europe. M-Pesa allows users to deposit, withdraw, transfer money and pay for goods and services under the banner, Lipa na M-Pesa (pay using M-Pesa) which is easily achieved on any mobile phone.
The service has been lauded for giving millions of people access to the formal financial system and for reducing crime in an otherwise largely cash-based society. Mobile money transactions in Kenya are now easier to make and are used across the 47 counties. It is not surprising that more advanced countries found in Asia and Europe have emulated and incorporated the M-Pesa system in their economies.
This mobile money transfer system is an example of Africa’s global connections adapting to digital ways in what has traditionally been a preserve coming from the more developed countries outside Africa.
The report further shows that Africa is turning from being just a recipient of development assistance into a provider of business opportunities for Foreign Direct Investment (FDI). In Kenya, inward FDI from China has been a big part of this trend with investments going mainly into primary resource sectors and infrastructure, the report notes.
Nairobi tops the list as one of Africa’s most attractive destination for FDI. This is in big part motivated by the fast-growing middle class of Kenyan residents who are setting the stage for a digital booming consumer market.
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