Frontier Economy Kenya Progresses with Financial Inclusion

Kenya’s strong growth follows sound economic policies, far-reaching reforms

Major priority is employment for Kenya’s young, rapidly growing population

Financial inclusion hailed as sustainable solution to nation’s poverty problem

Africa has emerged as one of the fastest-growing regions in the world since the global financial crisis, sparking optimism about the continent’s future among governments, investors, and Africans who are experiencing a rising standard of living. This optimism was on display during the Nairobi conference on Kenya’s economic prospects that was jointly sponsored by the Kenyan government and the IMF.

Ready for Take Off: Kenya’s Successes, Prospects and Challenges addressed a wide spectrum of issues that reflect the country’s emergence as a frontier economy in East Africa, including financial sector development, infrastructure, the harnessing of recently discovered natural resources, and the many aspects of inclusive growth. At its heart, the conference offered an in-depth examination of the recent resilient macroeconomic performance of Kenya—and Africa—at a time of global economic uncertainty.

‘Africa’s dynamism’

“Africa is moving forward, and the world is taking note of its dynamism,” said Antoinette Sayeh, Director of the IMF African Department, in remarks opening the conference. “Kenya is one of the countries where Africa’s recent progress is evident and where the opportunities for economic transformation and growth are manifest. Of course, much remains to be done and the gains are by no means automatic. The issue therefore is defining and implementing the policies that will enable Kenya to seize these opportunities.”

International cooperation on economic development was a central theme of the Nairobi event, as underlined by Kenyan President Uhuru Kenyatta in his speech to the conference. “We appreciate the contemporary framework of engagement, which focuses on mutual partnership as opposed to prescription and patronage,” he said. “This is refreshing. It is also pragmatic since it recognizes Kenya's, and Africa’s, innate potential for growth.”

Over the past three years, Kenya has experienced strong growth—forecast at 5.5 percent this year—in response to significant economic reforms and sound macroeconomic policies. Inflation has remained close to the government’s target of 5 percent. The country’s external position has improved substantially despite surging capital imports for oil exploration, and foreign...