Saturday, October 11, 2008

Kenya: Country Ranked As Emerging Economy By IMF

Paul Redfern -The Nation (Nairobi) -10 October 2008

Kenya is now among a select group of countries - including Ghana, Tanzania, Zambia, Mozambique and Uganda - to be rated as emerging markets by the IMF.

The stability of these countries along with Botswana and Nigeria should enable them to weather the current world financial crisis as industrialised countries look to new markets for vitally needed raw materials and food.

Moreover, the Economist magazine, says that the very conservative nature of the African banking system should ensure that Kenya and its neighbours are not likely to fall victim to the credit crisis affecting the West.

"Businessmen and budding entrepreneurs have always moaned about the excessive regulations and conservatism of African banks," the Economist says.

"Controls on foreign exchange often prevent them raising more money by investing in exciting financial instruments in the West.

"Foreign ownership of banks is usually limited (and) this very de-linkage from the Western financial system has turned out to Africa's advantage."

IMF deputy director Benedictine Christensen agrees saying that she could see "no systematic risk in any African country in terms of banking."

The IMF also says that foreign investment in African economies is growing. Last year investment and loans had risen to US $ 53 billion from just US $ 11 billion in 2000 with GDP growth across the continent as a whole running at more than four percent.

While there is still a major problem with wealth distribution in the continent and Kenya is singled out for example here, all the statistics show that rates of growth in most African countries - Zimbabwe is a notable exception - continue to rise year on year.

But issues of employment among the young must be addressed, the Economist says, if African countries are to continue enjoying this period of growth.