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- 1. Running on one Engine Kenyas uneven economic performance
with a special focus on the port of Mombasa Press BriefingWorld
Bank Economic Team Norfolk HotelPresentation by Dr. Wolfgang
Fengler Nairobi, June 3, 2010
- 2. Main messages Kenya is recovering - slowly but surely. For
2010, the World Bank isrevising its growth forecast upwards to 4.0
percent. For 2011, we project4.9 percent, if no shocks occur.
However, Kenya is running on one engine. Over the last decadegrowth
has been imbalanced, predominantly driven by domesticconsumption
fuelled by imports. Exports have been weak and non-tradablesectors,
such as services and construction have performed strongly. The
Infrastructure deficit constrains exports and the port ofMombasa is
still under-performing. Despite some improvements, portreforms have
not kept up with the momentum in other African countries. Itstill
takes 20 days to bring a container from Mombasa to Nairobi. This
islonger than to ship the same container from Singapore to
Mombasa.
- 3. Recent Economic Developments and Outlook for 2010
- 4. Kenyas economy is recovering slowly but surely
- 5. but lags behind growth in East Africa
- 6. Services have been the drivers of growth in 2009,
agriculture contracted again
- 7. and Kenyas ICT revolution continues:20 mn phone connections;
4 mn internet connections
- 8. Macroeconomic management has been strong:Inflation and
interest rates declined sharply since 2008
- 9. Fiscal deficits have been lowFor FY 2009/2010, the deficit
only reached 4.9% by April 2010
- 10. and the fiscal stimulus will not be fullyimplemented: 57%
disbursement after nine months
- 11. Kenya Running on one Engine
- 12. Kenyas share in world trade has been declining sharply
since 1970
- 13. The pattern of consumption-led growth and weak exports has
been building up for a decade
- 14. Consumption has led Kenya out of the crisis in 2009 - net
exports remain negative
- 15. The current account deficit remains large and is financed
by a strong capital account
- 16. ...which is driven by short term flows
- 17. Over the last decade, non-tradable sectors have performed
best Ave. Percent
- 18. Manufacturing has been overtaken by transport &
communication and wholesale & retail trade
- 19. The Port of Mombasa
- 20. Singapore ships 50 times more goods than Mombasa
- 21. 94 percent of Mombasa goods go to Kenya and Uganda
- 22. At the port, dwell time has been reduced, however, ...
20,000 11.33 12 10.67 18,000 10 16,000 9.13volum e of goods (000D
WT ) 14,000 8 12,000 10,000 6 5.93 8,000 4 6,000 4,000 2 2,000 0 0
4th Qtr 2007 2nd Qtr 08 4th Qtr 08 2nd Qtr 09 CFS DW TIME
- 23. .. it still takes 20 days to bring a container from Mombasa
to Nairobi 3.7 days18.3 days
- 24. and Kenya is lagging behind in the implementation of
reforms
- 25. Key reform issues Easy wins Improve management. The Mombasa
port can besubstantially upgraded, even with the current
infrastructure, includingthrough (i) full and effective 24hr port
operations; (ii) the implementation of a stateof the art IT system
(Port Community-Based System); (iii) the concessioning ofberths
11-14 through a competitive and transparent process; (iv)
theestablishment of a landlord port. Infrastructure upgrading Focus
on transport connections. Transfer ofgoods through Mombasa and
other parts of Kenya has become a majorhindrance to the economy.
Key improvements include the (i) Mombasa by-passalong with the link
road from the port; (ii) upgrading of rail capacity; (iii) building
ofnew container terminal by 2015
- 26. Thank You http://www.worldbank.org/keFor more information
on this report and the World Banks Economic program in Kenya,
please contact Wolfgang Fengler (wfengler@worldbank.org), Jane
Kiringai (jkiringai@worldbank.org) or Andrew Roberts
(aroberts@worldbank.org)