Policy Brief No. 01 of 2007 on Options for Sustaining Kenya’s Economic Growth Pattern

Abstract

Achieving sustainable economic growth in Kenya has continued to be elusive. Economic growth has been characterized by episodes of both high growth rates (1960s, 1970s and after 2003 to present) and recession (around 2000 with a negative growth rate). Also, the dual nature of the economy has become more pronounced, with the informal sector growing faster than the formal sector. Looking at sectoral performance, the share of agriculture and manufacturing in value added has declined over time, while private services have gained prominence. A review of the economic policy priorities for achieving economic growth reveals that there has not been a significant shift in sectoral priorities over time. As the economy continues on its recovery path from the recession experienced in 2000, it is important to establish what could have gone wrong with Kenya's past growth efforts, and also determine which sectors have the capacity to contribute significantly to economic growth.