Country Report Kenya January 2009

Outlook for 2009-10

• Kenya's broad-based coalition government between the president, Mwai Kibaki, and his main rival, the prime minister, Raila Odinga, is likely to re-main intact, although vulnerable to in-fighting and competition for influence.
• The unity government will focus increasingly on reforms to improve the business climate and investment in infrastructure. However, political feuding may hamper policy implementation, and corruption will remain a challenge.
• After slowing sharply in 2008 to an estimated 2.2%, GDP growth will weaken further in 2009, to 2%, as the global recession bites. Growth is expected to reach 3.3% in 2010 as the global economy improves.
• Inflation is expected to subside from a high 26.2% in 2008 to 10.1% in 2009 and 6.5% in 2010, assuming no new oil- or food-price shocks and the maintenance of political normality.
• The current-account deficit is expected to widen from 5.4% of GDP in 2008 to 5.8% of GDP in 2009, owing to weaker export growth and a sharp fall in tourism receipts, before easing to 3.7% of GDP in 2010.

Monthly review

• Parliament is reconvening earlier than usual this year, owing to a number of key items on the agenda, including the establishment of a Special Tribunal to investigate and prosecute those responsible for post-election violence.
• Parliament has passed a constitutional amendment bill, disbanding the Electoral Commission of Kenya and kick-starting the constitutional review process. Mr Kibaki will return a controversial new media bill to parliament.
• In December the cabinet approved a new privatisation drive and endorsed a new framework for public-private partnerships in a bid to attract private capital and boost infrastructure investment.
• The Kenya Pipeline Company released US$100m worth of fuel to Triton, a small player, without proper authorisation, in a fuel-supply scandal that may leave traders and banks with heavy losses and lead to severe fuel shortages.
• Real GDP growth was weak, at 2.1%, in the third quarter of 2008 owing to contraction in agriculture, manufacturing and tourism.
• The finance minister has initiated an audit of Safaricom's M-PESA money-transfer system, which now has 5m subscribers, amid worries that banks are facing unfair competition.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60
NAICS Code: 52