NCBA Projects 4.8% GDP Growth in 2024 for Kenya, Despite Global Headwinds

NCBA Group has forecasted a 4.8% GDP growth for Kenya in 2024, attributing the optimistic outlook to lower inflation and a favorable external environment. This projection aligns with the IMFs anticipated 3.1% global GDP growth for 2024, rising to 3.3% in 2025.

NCBA Group Managing Director John Gachora highlighted Kenya’s recent economic resilience, including decisive measures to address the maturing
June 2024 Eurobond, which helped stabilize sovereign spreads and the currency crisis.

Agriculture and agro-processing are expected to bolster growth, supported by favorable weather conditions boosting
exports and helping curb food inflation. The services sector is projected to maintain steady growth, with most sub-sectors reaching near long-term averages.

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However, NCBA cautioned about challenges that could affect growth, notably Kenya’s rising public debt, with interest payments projected to consume 38% of tax revenue in 2024/25. High pending bills, totaling Sh516 billion nationally and Sh182 billion at the county level, are impacting liquidity and private
sector stability. Elevated tax burdens on businesses also remain a concern, with unpredictable obligations affecting cash flow.

Building on these projections, market analysts suggest that Kenya’s strategic position in the East African trade corridor could further amplify growth prospects. The country’s digital economy is emerging as a significant contributor, with financial technology and mobile money services experiencing remarkable expansion.

Recent data indicates that business confidence is gradually improving, with the services sector projected to grow above 1% consistently through the forecast period. The government’s commitment to infrastructure development and trade
integration could potentially unlock additional growth vectors, although the World Bank cautions that targeted policy reforms are crucial for optimizing trade benefits.

The anticipated interest rate cuts by central banks globally could provide relief to Kenya’s debt servicing burden, while the successful Eurobond management has already demonstrated the country’s improving creditworthiness.

Despite these positive indicators, businesses are adapting to a new normal of moderate but sustainable growth, with GDP expected to average 5.2% during 2024-26. This measured optimism reflects a broader trend of economic resilience in emerging markets, where domestic consumption and strategic policy interventions are helping navigate global uncertainties.