Kenya may be growing but ‘You can’t eat GDP’

NAIROBI: The timing was perfect. Two months before Kenya’s August 8 vote, President Uhuru Kenyatta inaugurated the nation’s biggest infrastructure project: a railway connecting the capital Nairobi and the port of Mombasa.

With pomp and ceremony Kenyatta touted the railway as proof of his campaign promises on the economy, yet at the same time the price of maize flour, a Kenyan staple, was rising fast, stoking anger, especially among the poorest.

Rising food prices constitute a crisis on the eve of a high-stakes election in which Kenyatta, and his economic record, go head to head with longtime opposition leader Raila Odinga.

“On the one hand, there’s the symbol of Kenya which continues developing – even though it means an increased debt – and remains the most dynamic economy in East Africa,” said Francis Mwangi, an analyst at Standard Investment Bank.

“On the other hand, there’s the Kenya which hardly benefits from the effects of economic growth.” Kenyatta has put the economy at the heart of his campaign.

Thanks largely to increasing household consumption and public investment Kenya has seen growth of more than five per cent a year since his election in 2013.

But analysts say there is more – and less – to Kenya’s economy than meets the eye.

The country’s debt is rising, corruption is endemic and economic growth has not benefited the country’s poor, they say.

As in many other African countries, agriculture is the dominant activity, but Kenya’s economy is atypical in other ways.

It has relatively few natural resources, but the country’s stability, economic dynamism and well-developed service industry stand out. — AFP