Kenya could attain its highest economic growth since 1977 in the current financial year ending June 30, driven by the recovery from Covid-19 setbacks.

Launching the Fourth Medium Term Plan (2023-2027), National Treasury Cabinet Secretary Ukur Yatani said the projection is pegged on impressive growth rates recorded in the second and third quarters.

”Life is getting back to normal. Looking at our Q2 and Q3 growth, the country is likely to post one of the highest growth in history this financial year,” Yatani said.

The country’s GDP has been growing quarter to quarter from two per cent in Q1, Q2, 11.9 per cent and 9.9 per cent in Q3.

The Central Bank of Kenya (CBK) projects the growth to slow to 8.4 per cent in Q4, with the overall economic growth for the year hitting an average of eight per cent.

The growth is attributed to the rebound in all sectors of the economy, led by the hospitality sector that had dropped 70 per cent due to tough Covid-19 preventive measures by governments.

Other sectors that were crippled by the Covid-19 pandemic but are now on their feet include service, manufacturing and education.

Last week, the apex bank disputed low growth numbers given to the agricultural sector by the Kenya National Bureau of Statistics (KNBS), terming them faulty.

The statistician’s figures show the sector recorded negative growth of 0.1 per cent, 0.7 per cent and 1.8 per cent respectively, with estimates showing a further contraction of 1.3 percent in the last quarter of the year.

”A positive review of the performance of the agriculture sector would boost this overall performance, given the large share of the sector in contributing to overall GDP,” CBK said.

The sector accounts for 23 per cent of Kenya’s GDP, making it the single largest contributor ahead of transport and storage at 10.8 percent and real estate at 9.3 per cent.

Kenya’s economic growth has been varying since independence, hitting an all-time high of 22.17 per cent in 1971 after sinking to an all-time low of negative 12.61 per cent the previous year.

This highest drop in economic growth is attributed to the great economic recession of 1969-1970.

The last recorded GDP growth of above nine per cent in 1977 and a growth rate of 8.4 per cent in 2010, the highest in the current century.

Although the government is expecting a high growth rate for the year ending June 30, it has lower prospects for the upcoming fiscal year which will coincide with the August 9 general election.

Both KNBS and CBK are have projected a growth of six per cent in 2022.

”This is, however, expected to rise to 9.2 per cent by 2027 on the implementation of the Medium Term Plan 4,” Yatani said.

Over the new medium plan period, the government will seek to improve economic fundamentals that will include strengthened -robust domestic demand, diversification of economic base, improving domestic saving and increased investments.

It will also work towards a sustainable fiscal position, managing inflation and promotion of a sound financial system in order to ensure economic resilience.

This will see real GDP growth rise from seven per cent in 2023 to 9.2 per cent in 2027 while investment to GDP growth is expected to grow from 25.4 per cent to 28.5 per cent by the end of the medium plan.

The government is also targeting to lift domestic savings to GDP from 21.2 per cent in 2023 to 24.5 per cent in 2027.

Exports to GDP to rise to 19.5 per cent from 12.5 per cent while imports to GDP will grow to 25 per cent from 21.9 per cent at the start of the medium plan.

Kenya also targets to cut public debt to GDP to 65 per cent in 2027 from 70.2 per cent in 2023.