For yet a third year I have kept my tradition of starting the New Year with a visit to Sub-Saharan Africa—a region that truly offers great promise! As the world economy has remained focused on the crisis of the advanced economies, Africa has quietly forged ahead with strong growth led by a vibrant private sector and surging foreign investment. Over the past decade Sub-Saharan Africa has posted growth averaging 5.6 percent a year.
The countries of East Africa have done especially well. So what better place to begin my travels this year than in Kenya, which has emerged as one of the region’s “frontier economies”—countries whose recent performance is propelling them toward middle-income status.
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International Monetary Fund Managing Director Christine Lagarde walks with some children after she visited the Nest Home, an orphanage and halfway house for children January 7, 2014 in Nairobi, Kenya. Lagarde is on a two country visit to Africa. IMF Photograph/Stephen Jaffe[/caption]
Kenya is a remarkable economic story. It is now one of the top five destinations for foreign direct investment in Africa and boasts a dynamic business community led by a service sector that is helping the country to develop into a regional hub. Kenya’s successful development of mobile communications has spurred the rapid expansion of online banking. It has the highest share of the population with access to financial services—more than 70 percent—in all of Sub-Saharan Africa.This dynamism is evident in the bustling streets of Nairobi. I was struck by the vitality and entrepreneurial spirit of the people in the markets. This is a country on the move.
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International Monetary Fund Managing Director Christine Lagarde speaks in the chamber to Parliamentarians January 7, 2014 in Nairobi, Kenya. Lagarde is on a two country visit to Africa. IMF Photograph/Stephen Jaffe[/caption]
Meeting with Kenya’s leaders, including President Uhuru Kenyatta, its business community, parliamentarians, prominent women, and civil society figures, I was also struck by the deep commitment to the policies that can ensure the country’s recent achievements form the foundation for future success.
There is wide recognition that the economic reform process that has already brought low inflation, strengthened buffers, and increased capital flows must continue; and indeed, be further strengthened. This is important to make growth more sustainable—especially in creating opportunities and jobs for Kenya’s young population; and to make growth more inclusive—with the benefits flowing to all Kenyans.
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International Monetary Fund Managing Director Christine Lagarde speaks at the Kenya Private Sector Alliance in "Mindspeak", a forum for young entrepreneurs January 6, 2014 in Nairobi, Kenya. Lagarde is on a two country visit to Africa. IMF Photograph/Stephen Jaffe[/caption]
In my meeting with some of Kenya’s young entrepreneurs in Nairobi, we discussed the keys to building on the country’s momentum and what I called the necessary “Three Cs”.
All of this gives me great hope for Kenya’s future. This is a country that has faced extraordinarily difficult challenges in recent years—the impact of the global crisis, drought in the Horn of Africa, and the terrible attack on the Westgate Mall in September. Throughout these difficulties, the Kenyan people have demonstrated great fortitude and courage. The IMF has stood with Kenya—providing financial backing and policy advice. We will continue to support the Kenyan people as they stand on the threshold of a new future for their country, and for Africa.
