Publishing its latest Kenya Economic update, the bank said that, although challenges remain, growth in the east African country is expected to rise from 5.4% in 2014 to between 6% and 7% over the next three years.

But in order to anchor and sustain growth, the government needs to boost productively in the manufacturing sector to increase its competitiveness and create jobs, the report added.

‘Kenya is emerging as one of Africa’s key growth centres with sound economic policies in place for future improvement. To sustain momentum, Kenya needs to continue investing in infrastructure [mainly in energy and railways] and jobs, improve its business climate, and boost it exports,’ Diarietou Gaye, the World Bank’s country director for Kenya said.

A challenge highlighted by the bank was the slowdown in tourism following concerns about security. This has hit economic activity hard, especially in the country’s coastal region.

Demand for external exports is also sluggish and declining production for export was widening the current account deficit.

‘Kenya needs to increase the competitiveness of the manufacturing sector so that it can grow, export, and create much-needed jobs,’ said Maria Paulina Mogollon, the World Bank Group’s private sector development specialist and a co-author of the report.

To sustain growth, the Kenyan government must address the risks associated with fiscal expansion and rebuild policy buffers in the short to medium term to address fiscal sustainability. Devolution and local control of business levies could also help boost productivity, the report said.