‘Africa is Rising’ a term coined referring to the decades of economic prosperity in Sub-Saharan Africa (SSA), which was embraced with optimism due to increased levels of foreign direct inflows as well as portfolio inflows into the region. However, this optimism is slowly being eroded away in light of the recent economic slowdown in the region brought about mainly by declining commodity prices.
Kenya’s prospects in the face of a fragile regional growth momentum was the theme during IMF’s (International Monetary Fund) Regional Economic Outlook launch. Prince Muraguri, Ronald Wakhu and I (Carol Karoney) – BBS- Financial Economics 4th year students, together with Dr. Caroline Kariuki and Dr. Godfrey Madigu from the Strathmore Institute of Mathematical Sciences shared in dialogue geared towards restarting the economic growth engine in Africa.
Ms. Sheila M’Mbijjewe, CBK Deputy Governor, argued that African countries are viewed as homogenous; which is an injustice to the fundamental differences that give rise to immense opportunities in the region. Therefore, regarding the continent’s potential based on aggregate growth figures is flawed logic. For example, SSA’s GDP growth for 2016 was at 1.4%. However, excluding the region’s two main robust economies -Nigeria and South Africa, significantly changes SSA’s GDP growth to 3.1% giving a whole different story.
Furthermore, the impact of financial inclusion among households, Micro, Small and Medium Enterprises and SACCOs was discussed broadly. Specifically mobile money, which has put Kenya ahead of its comparator countries. The feedback for the presentation on financial inclusion during the Regional Economic Outlook launch was of great interest to the BBS students as we were part of the research team during our eight-week Industrial Based Attachment at the IMF. We acquired our attachment at IMF on a merit basis, through Professor Robert Mudida – Senior Lecturer at Strathmore Business School, as we were the top three students in Macroeconomics and Financial Markets unit.
The most exciting part in all of this is being part of an incredible growth journey for Africa. Despite existing structural weakness, I am still a strong believer in Africa’s potential. It was therefore a vast learning experience, which we were honoured to attain. We were also pleased to participate in a dialogue that will hopefully enable African policy makers reset the environment necessary for reviving the region’s growth momentum.
Article by Carol Karoney