STATE OF THE ECONOMY.

 PMPS 25/03/2011.

Prime Minister Raila Odinga has challenged the National Social and Economic Council (NESC) to come up with concrete policies that will ensure benefits of economic recovery reach all Kenyans.

The PM said that although the economy has been on the recovery path since 2003 with a break in 2008, the general feeling, which is also evident in the lives of the people, is that the benefits of the recovery and growth have not reached all Kenyans.

He urged the council to pay special attention to the issues of poverty and inequality and provide proposals that will help the government address these most critical challenges.

The PM noted that there was urgent need to address; the widening gap between the rich and the poor and unacceptable inequalities between the regions. ‘’It is highly unacceptable that fifty per cent of Kenyans still live below the poverty line-this is what other leaders and I fear’’, he said.

The Prime Minister said this today in his opening remarks when he chaired the National Economic and Social council meeting at the Kenya school of Monetary Studies. ‘’In this NESC meeting today, I propose that we focus on answering these issues that politicians and every ordinary citizens alike are raising’’, he noted.

He said the general perception in the public domain was that as the prices of essential commodities keep rising rapidly, there was no strong action by government to keep food and petroleum affordable.

Mr Odinga pointed out that a report from the ministry of planning provides optimistic scenario which projects that economic growth would rise to 6.5 this year. On the other hand, he said that on the pessimistic scenario, the report puts the country’s economic growth at 4.2per cent this year and 4.8 per cent in 2012.

‘’I would like you to discuss and advise government what policy actions it should take to keep the economy growing at least around 5.5 per cent this year and to resume next year the path towards our goal of sustaining growth at 10per cent’’said the PM.

He announced that government is taking appropriate measures to cushion Kenyan households and industries from the adverse economic effects occasioned by internal and external shocks.

He said a full implementation of the Constitution would go a long way in sustaining growth but added that politicians will need to pull together and tone down rhetoric to help sustain the economy.

He observed that as much as the country’s economy continues to recover from the consequences of the
post election crisis, the economic outlook is that it’s now subject to some downside risks.

‘’All of us must take a moment to ponder and assess what is happening in the world, to examine the implication for our country and for the world, and to consider what needs to be done to safeguard the well being of our people’’,he said.

He stressed on the need to manage both internal and external shocks so as to keep the economy vibrant for the country to be able to achieve aspirations of vision 2030.

He cited the rising petroleum prices, the need to import large quantities of maize at sharply higher prices this year and the projected fall of the country’s major export as ‘’external shocks’’ that will certainly give rise to downward pressures to the economy.

The meeting was attended by Cabinet Ministers and Permanent Secretaries from key Ministries,Central Bank Governor ,leading Private sector personalities ,council members from Malaysia,Korea,Singapore and Japan.