Kenya is expected to become the largest economy in East Africa by 2025. That means we’re likely to overtake Ethiopia, which has held the top spot for a while.
The IMF says our economy will grow to around $132 billion (about Ksh 17 trillion) next year. That’s up from $121 billion last year.
In addition, Ethiopia’s economy is predicted to shrink to $117 billion, down from $143 billion.
One big reason for Ethiopia’s drop is that their currency, the birr, lost a lot of value after the government decided to let the exchange rate be more flexible.
It lost over 55% of its value against the US dollar. On the other hand, the Kenyan shilling has done really well.
It was actually the best-performing currency in the world at one point!
That helped Kenya raise money by selling a $1.5 billion bond earlier this year. It also boosted our reserves.
It’s like Kenya has been playing its cards right when it comes to handling money and international deals.
We’ve also been helped by our brothers and sisters living abroad. In 2024, Kenyans in the diaspora sent home a record-breaking Ksh 651.7 billion ($4.94 billion).
It is an 18% increase from the previous year!
December alone brought in over Ksh 57 billion. Most of this came from the United States. This contributed more than half of all remittances.
Kenya’s exports reached a record high of $8.25 billion last year. It had big growth in farming and manufacturing.
July 2024 was our best export month with nearly $750 million worth of goods sold abroad.
You might remember the protests over the Finance Bill 2024. Those disagreements hurt our tax revenue. The government had to scrap part of its plan with the IMF.
We walked away from about $850 million in funding and are now negotiating a new deal.
Globally, things are a bit shaky too. Trade tensions around the world have made the IMF lower its growth forecast.
The global economy is now expected to grow by just 2.8%, down from 3.3%. Sub-Saharan Africa’s growth will also slow to 3.8%, the slowest since the pandemic.
Kenya is proving to be strong and resilient. I’m really proud of the progress we’re making!
By Kenyans