Unimpressive ‘14 but next year quite promising

Focus on few tasks that take you closer to your business goals daily. PHOTO | FILE 

 

By ODHIAMBO RAMOGI

Overall, 2014 has been a year of break-even; a matter of maintaining the status quo as the country prepares for significant growth after overcoming the numerous hurdles in its path.

To begin with, economic indicators remained at conservative rates, indicative of the approach taken by government’s economists.

The Consumer Price Index, which is a measure of the change in price level of a basket of consumer goods and services purchased by households, stood at 151.85 while inflation was maintained between six per cent and eight per cent throughout the year as at November.

The CBR was maintained at 8.5 per cent throughout the year while the 91-day T bill oscillated between 8.8 and 9.8 per cent.

The shilling was under intense pressure after tea prices were subdued internationally and tourism figures dwindled significantly informed by insecurity in the country.

The year started with the dollar exchanging at 86.41 and the figure stood at 90.56 last week, testament of the challenges faced by the currency. The successful Eurobond helped fortify our foreign exchange reserves but was not enough to stop the downward spiralling.

Faster cargo clearance

The World Bank Ease of Doing Business report placed Kenya at position 136, an improvement from the previous year.

While this figure is still very poor in a competitive global environment, it’s worth noting that a lot has been achieved in the year, which has not been included in the report.

Business name search is now online, Huduma centres have been established and cargo clearance at Mombasa port is much faster now.

The stock market saw the listing of some more SMEs while the bourse self-listed and complete the demutualisation process.

The NSE 20 Share index maintained its stance at 1.76 per cent while the All Share index saw an 18.46 per cent gain, testament of the fact that small counters are giving more price rewards than the big corporations.

Probably the biggest business news in the year was economic rebasing completed in October. The exercise saw Kenya rise to a low middle income country, overtaking many other countries in Africa.

The good news is that we are richer than we thought; the bad news is that the government now has leeway to borrow more money, which is not equivalent to growth.

Politically, the cases involving President Uhuru Kenyatta and his deputy William Ruto at the International Criminal Court were a major problem diplomatically. They made the country look unattractive to investors. The court’s decision to drop Mr Uhuru’s case is welcome news.
 

Further, insecurity in the country significantly affected the economy. A change of guard at the helm of the security apparatus and a new Bill present hope for a better 2015.

In light of the above, it is difficult to see much difference in GDP growth figures in 2014. The growth in the first three quarters average 4.4 per cent. In this regard, I foresee growth of between 4.7 per cent and 4.9 per cent in 2014, in line with the World Bank’s adjusted figures.

The year saw some progress towards realising Vision 2030 goals. It was a conservative year in growth, but significant in setting the right foundation for future growth.