I guess we can only dream of what could have been!  It doesnt take much to destroy, but it takes a whole lot to build!


http://africa.reuters.com/country/KE/news/usnBAN236715.html <http://africa.reuters.com/country/KE/news/usnBAN236715.html>

Kenya sees 2008 GDP growth at 4.0-4.5 pct in worst case

Wed 2 Apr 2008, 9:12 GMT
By Helen Nyambura-Mwaura
ADDIS ABABA (Reuters) - Kenya's finance minister has issued his second warning in a week about the country's likely economic growth in 2008, saying it could fall as low as 4.0-4.5 percent though he still hoped for 6 percent.
"From our own projections we expect to grow anywhere between 4.5 and 6 percent. I am very optimistic. I'm actually hoping we can hit 6 percent," Amos Kimunya told Reuters in an interview late on Tuesday.
"In the worst case scenario, we could do 4-4.5 percent in this calendar year."
Last Wednesday he cut his 2008 growth forecast to 6 percent from an earlier projection of 7 percent, after rioting and ethnic clashes following a disputed presidential vote hurt major economic sectors such as tourism, agriculture and transport.
Some analysts have said growth in 2008 would be only half the estimated 6.9 percent in 2007.
Speaking on the sidelines of an African finance and economy ministers' meeting in Ethiopia, Kimunya also said a strong local currency is helping to limit the effects of high global oil prices on the economy.
The Kenya shilling has clawed back losses made during weeks of violence earlier in the year and analysts expect it could appreciate to the 60 shilling level against the dollar in coming weeks. It closed at 62.70/80 on Tuesday.
"Luckily for us, the dollar is weak, the shilling is strengthening so we are able to insulate a bit of that cost," Kimunya said.
He added that an initial public offering in Safaricom, Kenya's leading mobile phone operator and most profitable company, had attracted foreign investor interest.
The government is offloading a 25 percent stake in the firm and Kimunya said he expected Kenyans living abroad to also subscribe to the issue boosting the local unit some more.
"It is difficult to say at this point but either way of 60 is a possibility... As the shilling gets stronger, people will be encouraged to do massive imports, especially things for reconstruction."
Ethnic violence in January and February killed some 1,200 people and displaced 300,000 others, many of them farmers in the Rift Valley Province, the country's bread basket.
Kimunya said the government would not subsidise the cost of commodities such as the staple maize or kerosene, used by many to light up their homes, cut off from major power lines.
Food shortages caused by blocked supply routes during Kenya's crisis sent overall inflation higher to 18.2 percent in January from 12 percent in December, and 19.1 percent in February. Annual inflation rose to 21.8 percent in March.
"When you try subsidising kerosene, you end up not benefiting the target people. The kerosene is used to dilute diesel by unscrupulous people," he said.
"We are looking at ... bringing down the overall cost of farm inputs which will have a knock-on effect on ultimate production."
Kimunya said he expected interest rates would fall. A 15-year bond with a 13 percent coupon rate floated last month was oversubscribed by over 30 percent.
"Our target was to have a combination of so many things to make sure core inflation remains at 5 percent. That means interest rates will obviously be coming down, but not that drastically as to lead to people having negative savings. It is something we have to continuously monitor."
Kimunya said the government would increase spending in the next financial year, adding it would be in line with GDP growth.
"We already had quite a jump last year and we will probably be seeing about the same growth, 5-6 percent, in terms of extra expenditure," he said.
Kimunya said the government would spend more on free secondary school education introduced at the start of the year, resettling families that fled their homes during the crisis and revamping the tourism industry.
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