KEYNOTE ADDRESS AND LAUNCH OF AFRICAN ECONOMIC OUTLOOK (AEO) 2013 AND AFRICAN DEVELOPMENT REPORT (ADR) 2012 DISSEMINATION SEMINAR BY MS. ANNE WAIGURU, OGW, CABINET SECRETARY, MINISTRY OF DEVOLUTION AND PLANNING, HOTEL INTERCONTINENTAL, NAIROBI – 30TH SEPTEMBER, 2013

Mr. Gabriel Negatu, Regional Director, East Africa Resource Centre, ADB

Country Director, European Union, Kenya,

Distinguished Guests

Ladies and Gentlemen

Let me from the onset say that it is a great honour to preside over this important forum on the launch of the twelfth edition of the African Economic Outlook report. As I launch this report let me recognize that this year marks a major milestone in the development of Pan-Africanism. 50 years back in 1963, the Organization of African Unity (OAU) was born. The launch of this report therefore should help us reflect on the journey thus far and cast forward into the future we aspire towards, as a continent.

Ladies and Gentlemen, Over the past decade, Sub-Saharan Africa has seen a remarkable turnaround in economic performance. After years of stagnation, economic growth has spurted—from annual average GDP growth of less than 2 percent in 1978-1995 to about 5 percent in the past decade. Inflation is half the level of the mid-1990s. Private capital

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flows have risen to over $50 billion, exceeding foreign aid. Exports are growing, as is private sector activity, and thus emerging as a major investment frontier.

This increased dynamism in Sub-Saharan Africa is evident across a broad swath of countries. It has created optimism that Africa’s favorable development performance will be long-lasting and that it could dramatically transform countries in the region. Along the way, the prevailing discourse on Africa’s economic development has shifted from whether the region will develop to how the region is developing as well as positioning Africa as the next investment frontier.

Despite this progress, there are still causes for concern. For one thing, there are large differences in the performance of individual Sub-Saharan African economies. Also worrying is that historically, Africa’s performance has been volatile—with short periods of acceleration followed by long periods of deceleration. The pattern of progress underscores serious shortfalls in some areas, notably in the economic diversification of many countries and in the integration of African economies into the global economy.

African countries also need to correct large infrastructure deficits, dramatically expand the skills base of their labor forces, and improve their ability to absorb technical knowledge in the private sector in order to improve their global standing in the years ahead. The downward risks are further accentuated by the lingering effects of the global financial crisis of 2008, that is indirectly impacting on Africa’s resilience through trade and decline in global demand and the intermittent disruption of financial inflows.

Ladies and Gentlemen,

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Turning to the 2013 Global Economic Outlook with the Special Theme “Structural Transformation and Natural Resources”; It is a recognized fact that Africa is a diverse continent with regard to the individual country natural resource endowments. Management of natural resources is therefore closely intertwined with economic development. This provides unique opportunities for fostering cross-sectoral linkages. We are today faced with a favorable African Economic outlook supported by a relatively broad-based growth, with oil production, mining, agriculture, services and domestic demand as the main drivers, mitigating the adverse effects from global turbulences. It is for this reason that performance and projections for the medium term point to the continent’s continued resilience amidst global headwinds.

However, growth in several countries remains subdued by poor export performances and political and social tensions. We are also faced with growth that is not backed by sufficient poverty reduction, with persisting unemployment, increased income inequalities and in some cases, deteriorating levels of health and education. We must therefore embrace economic transformation capable of creating competitiveness, yielding more gainful jobs and empower more people in the society.

Coming home, Kenya has also witnessed variations in economic outlook. Kenya saw an expansion of the economy of 5.4% in the period 2003-2007. The multiple shocks experienced in the period following, resulted in a slowdown in the economy to 3.9% though still demonstrating resilience. There is a great deal of optimism in economic performance in the current period, with an economic expansion of 4.6% in 2012, and projections of 6.1% in 2013.

To ensure that the economy continues to remain vibrant, as a country, we are moving towards policies that will ensure less vulnerability to exogenous shocks by addressing the structural

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challenges of our economy. Green growth as a concept portends great potential in unlocking new opportunities and new market potential. We will look to avenues that will create sustainable development, that will create jobs for young people, women and marginalized communities; ensure consistency and resilience and stem vulnerability.

Further, as a country, we look to address the infrastructure shortfalls; we need to modernize agriculture to increase productivity. We have included in the second Medium Term Plan the plan to harness our rich natural resource base for longer and sustained inclusive growth. This means making better use of the capabilities that will build a sustainable economy. At the macroeconomic front Kenya will seek to we need to maintain inflation below double digits; maintaining debt at manageable levels and maintaining fiscal discipline.

Ladies and Gentlemen,The exploitation of natural resources for economic and social growth must be linked to other sectors which require sound land management, balanced and effective tax systems and the right mechanisms and incentives to cause an acceleration and diversification of the sources of growth. It is imperative that governments ensure that the benefits of growth are shared equitably to ensure poverty reduction, reduce income inequalities and improve livelihoods. As a country, we will leverage on new technologies and breed innovations.

Finally, Ladies and Gentlemen, I wish to thank, the Africa Development Bank for undertaking a rigorous analytical report, but wish to highlight that for future reports, you should check with our offices to ensure that the data is consistent with what is produced by the National Statistical Office.

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Distinguished Guests, Ladies and Gentlemen, It is now my humble duty to officially launch the African Economic Outlook 2013.

Thank you for your attention.

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