By Mong’ina Bricky
Kenya is on course to achieve double-digit economic growth in the near future after laying a strong foundation for macroeconomic stability, National Treasury Principal Secretary Chris Kiptoo has said.
Speaking at Osinani Catholic Church in Kilgoris, Transmara West, Kiptoo expressed optimism about the country’s economic prospects, saying the current five per cent growth rate demonstrated resilience amid global and continental economic challenges.
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He said while many African economies were recording growth rates of between two and three per cent due to global shocks, debt distress and currency volatility, Kenya had managed to maintain a stronger economic performance.
“If you look at the continent, many countries are averaging 2 to 3 percent growth. Kenya is at 5 percent. That is no small achievement. It shows we have laid a foundation for a double-digit growth rate,” Kiptoo said.
The PS attributed the performance to government efforts to stabilise the macroeconomic environment, contain inflation and strengthen the shilling, saying the measures had helped restore investor confidence and attract new investments.
Foreign investment doubles to $3.2 billion
Kiptoo revealed that Foreign Direct Investment (FDI) had doubled over the past four years to reach $3.2 billion, up from approximately $1.5 billion in 2021.
He expressed optimism that the figure could rise to $10 billion by next year, attributing the anticipated growth to a more predictable business environment, settlement of pending bills and the opening up of previously restricted sectors.
“For the last four years, foreign direct investment has doubled to 3.2 billion dollars and we are hoping for 10 billion dollars by next year. This is because we have created a predictable business environment, we are paying pending bills and we are opening up sectors that were previously closed,” he said.
Among the major investments in the pipeline, Kiptoo cited a proposed mega industrial complex in Lamu involving Nigerian billionaire Aliko Dangote.
“We already have Dangote in Lamu, him alone he is bringing 17 billion dollars in the country. When you have that kind of investment in manufacturing, petrochemicals and fertiliser, you are talking about thousands of jobs for our youth and a big boost to our exports,” he said.
He said the proposed investment would complement the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor and strengthen Kenya’s ambition to become a regional manufacturing and logistics hub.
The development is also expected to support industrialisation through investments in manufacturing, petrochemicals and fertiliser production, while creating employment opportunities and expanding the country’s export capacity.
PS cautions against excessive borrowing
Despite his optimism about the economy, Kiptoo warned that government expenditure and the country’s appetite for borrowing needed to be checked, acknowledging that Kenya had accumulated substantial debt over the past decade.
He said although borrowing had played an important role in financing infrastructure development, the Government needed to exercise greater prudence and ensure loans were directed towards projects capable of generating economic returns.
“However, expenditure is too much. We should go slow on borrowing since we have borrowed too much. We cannot continue borrowing to finance recurrent expenditure. Borrowing must be for high-impact development that can pay for itself,” he cautioned.
He said the National Treasury was pursuing fiscal consolidation measures aimed at reducing wasteful expenditure, rationalising state corporations, digitising revenue collection and broadening the tax base without imposing an excessive burden on Kenyans.
Kiptoo ruled out introducing new taxes that would further strain households, saying the Government would instead focus on sealing revenue leakages and ensuring compliance among eligible taxpayers.
“We are not going to introduce new taxes that hurt Kenyans. We are going to seal leakages and ensure everyone who should pay tax pays,” he said.
Growth must create jobs and lower cost of living
The PS assured Kenyans that the Government remained committed to reducing the cost of living while sustaining economic growth, noting that the current five per cent expansion must translate into tangible improvements in people’s livelihoods.
He said the Government was prioritising agriculture, manufacturing, housing and the digital economy because of their potential to create employment, particularly for young people.
“Growth means nothing if it does not create jobs. That is why we are focusing on agriculture, manufacturing, housing and the digital economy, sectors that absorb our youth,” Kiptoo emphasised.
He maintained that strengthening these sectors would be critical to translating macroeconomic stability into broader economic opportunities, improved household incomes and a better standard of living for Kenyans.
