THE
World Bank has rated Kenya as Africa's best country in terms of
policies and institutional reforms that support growth and reduce
poverty.
This
is a big boost to the country coming just a day after the National
Treasury kicked off the process of borrowing some Sh85 billion from the
international markets through a sovereign bond.
The
latest World Bank ranking also comes as a slap in the face to an annual
'failed-state index' published two days ago by a controversial
Washington groups Fund for Peace and Foreign Policy magazine which
ranked Kenya among the world's 20 most unstable countries.
In
the World Bank's Country Policy and Institutional Assessment (CPIA)
which rates the performance of poor countries, Kenya was ranked top
together with Cape Verde in Sub-Saharan Africa. Kenya’s overall score of
3.9 in 2012 is the highest among 40 countries in Africa, and reflects
an improvement over a score of 3.8 in 2011.
Treasury's
economic secretary Geoffrey Mwau welcomed the favorable ranking saying
it is a reflection of the reforms that the country has been undertaking.
Mwau said key rating agencies such as Fitch and Moody's have rated the
country with a B+ with positive outlook while the International Monetary
Fund has conducted five success reviews of Kenya's economic performance
and had been satisfied.
The
CPIA examines 16 key development indicators covering economic
management, structural reforms, policies for social inclusion and equity
and public sector management and institutions.
Countries are rated on a scale of 1 (low) to 6 (high) for each
indicator. The overall CPIA score reflects the average of the 16
indicators.
The
key gains for Kenya included strong monetary response in 2012 which
enabled it to reduce inflation to 9.6 per cent, from 14 per cent in
2011, and also to stabilise the exchange rate.
"Moreover, the government has maintained fiscal discipline even in the
face of recent economic shocks and budgetary pressures including
spending on elections and security operations in Somalia. As a result,
public debt as a share of Gross Domestic Product has declined to below
45 per cent," the World Bank noted.
Kenya
is however lagging behind in the areas of business regulatory reforms
and governance which are essential for private-sector led growth and job
creation.
Since 2008, Kenya has gradually declined from a top performer in the
Doing Business indicators, dropping from a global rank of 78 then to 121
in the 2013 rank. The 2013 Doing Business noted that Kenya dropped in
eight out of 10 indicators assessed, including in issuance of
construction permits and enforcing contracts, leading to missed
opportunities for implementing relatively minor improvements in the
business regulatory environment.
The
general outlook for all countries in Sub-Saharan Africa shows an
overall stable environment for growth and poverty reduction despite
divergence in key policy indicators across countries. In the East
African Community, Rwanda and Tanzania are also ranked highly, with CPIA
score of 3.8, while Uganda scores 3.7.
Since 1980, CPIA ratings have been used to determine countries’
allocation of zero-interest financing under the International
Development Association, the World Bank Group’s fund for the world’s
poorest countries.
Source: http://www.the-star.co.ke/news/article-125959/kenya-ranked-top-world-banks-growth-assessment
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