Webinar Review: 2021 Economic Outlook and Drivers For SMEs Growth

Hosted by Inuka SME; Reviewed By Patrick Okinda.

In the hypothetical opinion of Dr. Samuel Tiriongo, Kenya Bankers Association Director of Research and Policy who spoke in the webinar; the following are key highlights in Kenya’s 2021 economic outlook.

  • A 0.1% contraction rate of Kenya’s economy by December 2020 which is better than IMF’s projection of 1.0%.
  • The impact of COVID-19 pandemic remains uneven, and recovery non-uniform across countries and sectors.
  • Contactless sectors such as agriculture have remained more resilient than the service sector which remains depressed by lockdowns and cessation of movements.
  • Kenya’s inflation rate has remained low and steady since 2018.
  • The measures taken by government (except on fuel prices) continue to support credit growth despite the uncertainty caused by the pandemic.
  • Overall in 2021, the economy is projected to rebound by 7.6% (IMF projection is much lower at 4.7%) subject to removal of some pandemic containment measures, schools reopening, government policy support, fast paced vaccine rollout to a wide reach and at a waived fee.

The general growth of MSMEs amidst the pandemic is hinged on opportunities for business that will unlock credit, supply of raw materials, demand for goods and services in the local market and sufficiency of operating capital. The risks for MSMEs closure still remain but they can be mitigated through diversification of products and services, innovation, prudent management of resources and changing of business models to accommodate change.

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