Despite the achievements in meeting various social economic development targets, the Kenyan economy faces several challenges. It has had slugging growth since 2008 and on average the growth rate remains far below the 10% target. In 2014, the GDP growth rate was 5.3 per cent down from 5.7 per cent in 2013. Although the economy has over the last one year enjoyed lower production costs due to fall in global oil prices, uncertainties related to terrorism and insecurity, and adverse weather conditions have persisted. Kenya?s long-term growth therefore remains vulnerable to external shocks. Following devolution, the Government is implementing various measures to combat poverty, youth unemployment, environmental degradation and income inequality along with availing access to education and health for all in order to spur economic transformation.
Sustainable economic growth is also threatened by Kenya's vulnerability to climate change. It is estimated that 42% of Kenya?s GDP and 70% of overall employment is derived from natural resource-related sectors, including agriculture, mining, forestry, fishing, tourism, water supply and energy. While climate change will lead to adverse impacts across all of these sectors, agricultural stands apart as particularly vulnerable. This is because agricultural systems are predominantly rain-fed and highly susceptible to shifting rain patterns and extreme climate events like drought whose frequencies and intensities are expected to increase as a result of climate change. It is projected that the resultant reductions in crop yield will have devastating effects on the country?s economy in the medium term. In the recent years, Kenya has made significant discoveries of commercially viable deposits of oil, natural gas, coal and other minerals. The exploitation of these resources is expected to significantly change the structure of the economy and to produce impacts of the environment and social aspects. .