Global financial crisis to hurt Kenya

  1. Posted on Tuesday 7 October 2008 - 10:30
    Dolphyne
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    Joseph Appiah-Dolphyne, AfricaNews editor in Accra, Ghana
    The global financial crisis will hit Kenya's economy badly, Prime Minister Raila Odinga said on Monday. He rejected previous assertions that African states would emerge largely unscathed from the chaos. "This will impact very negatively on the Kenyan economy in the short and medium term," he added.
    kenya market
    Emerging markets, which benefited greatly from the boom in commodities demand and surging global expansion in the last three years, have started to tremble in recent days and Odinga said the consequences would be severe in Africa.

    "They say that when America sneezes, Europe catches a cold, Asia develops pneumonia and Africa's tuberculosis gets worse. This is what we are beginning to see," he said.

    Kenyan Central Bank Governor, Njuguna Ndung'u, said last month that East Africa's largest economy was rebounding from a post-election crisis at the start of the year and repeated a revised 2008 growth forecast of between 4.5 and 6.0 percent, Reuters News Agency reported.

    Ndung'u said at the time that the financial crisis had not severely hit emerging markets because exposure was indirect, but Odinga said the gross domestic product (GDP) forecasts would now have to be cut, though he did not give any figures.

    "I think our GDP will be hit very adversely. I will get the forecasts from our central bank when I return home, but it is going to have a very negative impact on our GDP," he added.

    He insisted that his government would issue a debut Eurobond worth about $500 million in the 2008/09 financial year despite the market turmoil and despite a call from the International Monetary Fund to reconsider the timing of such a move.

    "We want to do it in this financial year, but we might not do it in 2008. We might wait until next year," Odinga said.

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