What was an economically tumultuous year for Kenya in 2022, promises to be even more challenging in 2023. This is due to a reduction in the projected growth for Kenya’s economy in 2023 at 5.0% compared to last year, when the World Bank had Kenya’s economic growth at 5.5%.
This drop comes amidst a sharp decline in global growth to 1.7% in 2023, the third weakest pace of growth in nearly three decades, surpassed only by the recessions faced in 2022 as a result of the global pandemic and the global financial crisis of 2009.
Detailed in the World Bank’s January 2023-Global Economic Prospects Report, the Bank disclosed that all of Sub-Saharan Africa would also suffer the effects of economic influences outside of its control. The growth rate in this sub-continent has been projected to perform poorly, at 3.6% in 2023 and 3.9% in 2024.
“Government debt distress would have large adverse spillovers on growth and financial stability in many countries, especially where banks are heavily exposed to sovereign debt (Ghana,Kenya, Sierra Leone),” World Bank reports read in part.
Kenya is hardly the only country in Africa to have such a gloomy economic forecast. Practically every sub-Saharan African country has been projected to perform worse than it did last year economically, including Africa’s richest country, Nigeria, who’s economy the Bank projected would slow to 2.9%. Read the story here.
Nigeria’s economic forecast ties into its poor performance in its oil and gas sector, coupled with other catalysts that have been estimated to cause financial distress for Africa’s largest economy.
Since last year, economists have warned of an impending recession, and advised countries all over the world to brace. The World Bank’s report is consistent with this narrative, as the same economic deterrents that affected the the fiscal year globally are still prevalent today.