Claims that African countries would be the hardest hit by the global financial crisis seem to have been overstated in view of the recent solid performance of the economies of Kenya, Uganda and Tanzania, based on a study by the Standard Chartered Bank, as reported in The East African. Kenya’s economy faltered because of post-election violence in 2008, but in the past year it has made a healthy recovery.
During the global financial crisis, the Central Bank of Kenya took measures to increase liquidity in the banking system, leading to higher domestic borrowing and a sustainable low-interest-rate environment. Signs of recent economic health in Kenya include an increase of 20 percent in power consumption, improvements well above the inflation rate in tax collections, and increased agricultural productivity.
In 2006 only 26.4 percent of the Kenyan population had access to formal banking; this percentage has risen to 40.5 in 2009. The advent of mobile-phone banking has extended the reach of financial services to a far greater proportion of the country’s population. It is predicted that Kenya will experience economic growth of 4.1 percent for the next two years, rising to 6.5 percent in 2013. Tanzania’s growth rate in 2013 is expected to be slightly higher at 7 percent, while Uganda’s growth rate is expected to be driven by oil to 9 percent.