Insecurity still a major threat to investment
Insecurity remains a key concern for investment, the Parliamentary Budget Office has said.
The concerns have, however, prompted the government to take measures to deal with the problem. “Though reported terrorist attacks have somewhat declined this year and tourism has greatly improved, both investors and tourists remain wary of security lapses.
The performance of these sectors of the economy may not be optimal,” a statement released by the PBO says. It says security related expenditure is a key item in the 2016-17 Budget for cushioning Kenya from attacks.
However, during the first quarter of 2016, the economy is estimated to have performed impressively, expanding by 5.9 per cent compared to five per cent in the same period last year. This is attributed to a rebound in the tourism sector, which boosted performance in accommodation and food services.
Other sectors also recorded improved growth, except manufacturing. The PBO said the uncertainty about the 2017 elections is worrying and could adversely affect investment, as fear gradually creeps in.
In the East African region, the renewed fighting and civil unrest in neighbouring South Sudan portends significant problems for the Kenyan economy. It says Kenya risks losing revenues.