Kenya central bank chief sees Britain’s exit from the European Union as biggest risk facing economy
28 Apr 2016 12:30 Helen Nyambura-Mwaura
NO economy in the world will be immune to the volatility that would follow a decision by Britain to exit from the European Union, Kenyan central bank Governor Patrick Njoroge said.
East Africa’s biggest economy won’t be spared the “shock waves” that could reverberate around the world should voters in the U.K. decide in a June 23 referendum to withdraw from the economic bloc, Njoroge told reporters in the Kenyan capital, Nairobi, on Thursday.
“All I can tell you is that it will be a disaster,” he said. “We are connected to all external markets. If there is any volatility there, it will affect us. We haven’t taken out insurance on volatility, so markets will punish everybody, because there will be nowhere to hide.”
Barring a so-called Brexit, Njoroge said he was more optimistic about the prospects for Kenya’s $61 billion economy, whose biggest exports to Europe are tea and cut flowers. Kenya’s gross domestic product expanded by 5.6% in 2015 and the pace should pick up to about 6.1% this year, according to Treasury estimates.
Britain Exits the EU: What Does this mean for Kenya?
Britain’s decision to exit the European Union (EU), as announced from the results of Thursday’s landmark “Brexit” referendum has been a hot topic around the world. 33.6 Million Britons flocked to the polling booths on Thursday with the ‘leave’ campaign marginally taking the victory with a 52%-48% vote. There is however a general consensus of uncertainty with what the UK’s (United Kingdom) decision holds for the future, with particular relevance to what it means for Kenya.
Britain is a key ally, as well as Kenya’s third largest export market with the value of exports at Sh40 Billion in 2015. The Central Bank of Kenya has already stated that it is ready to intervene and minimize disruption in money markets. Kunal Ajmera, COO of Grant Thornton Kenya provides an insight into how Britain’s decision to leave affects trade decisions and tourism in Kenya: Read more: http://bankelele.co.ke/2016/06/3773.html