The Central Bank of Kenya (CBK) Governor Dr. Kamau Thugge has explained why Tanzania and Uganda’s economy is growing as opposed to Kenya’s economy.
Thugge was appearing before the Departmental Committee on Finance and National Planning on Tuesday, October 24, for the review of the country’s economic performance.
Moreover, the CBK governor gave reason for the difference in economic growth explaining that Uganda had been attracting more foreign exchange.
Additionally, he noted that Tanzania’s relatively good performance was attributed to tourism receipts.
However, Thugge pointed out that Kenya’s performance was highly dependent on remittances by migrant workers.
“The Chairman Kuria Kimani sought to know what measures Uganda and Tanzania had put in place to register growth in their economy,” stated a report from the committee.
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CBK Governor Addresses Dollar Exchange Rates
At the same time, Thugge addressed the weakening of the shilling against the US dollar stating that most African countries had been affected.
According to him, it was a reflection of the strengthening of the US Dollar around the globe because of policy tightening in major economies.
“The indicative rate published on Monday this week showed the dollar’s buying price at Ksh149.84 with a selling rate of Ksh150.04 units, averaging at Ksh149.94,” noted the committee.
Plans to Support the Shilling
Thuge stated that plans had been put in place to address the weakening of the shilling and grow Kenya’s economy.
His proposals included interbank market reforms, deliberate measures to improve forex inflows and improvements of sentiments around the Eurobond debt concern.
Also, he proposed narrowing the account deficit especially on reduced imports and strong exports.
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“He also observed that strong remittances and diverse tourism in addition to traditional tourism would also help alleviate the challenge,” noted the report.
Latest KPMG Report on Investors Preferring Tanzania to Kenya
According to a new KPMG October 2023 report, Tanzania had surpassed Kenya as the greatest investment destination for investors looking for opportunities in the East African area.
Additionally, despite Kenya having the largest economy in East Africa, the report noted that 15% of senior executives in the region stated that they would invest in Tanzania, while 14% favored Kenya.
KPMG asked business executives with experience in making deals to list countries they were considering an acquisition or investment in Sub-Saharan Africa over the next two years.
Notably, the survey found that fintech, oil and gas, consumer products, and mining will drive most investments in the following two years.
The survey featured both local and foreign investors.
