Nairobi — A top economic consultant at Treasury has cast doubt on the potential for the Sh56-billion tourism industry to create jobs and spur economic growth.

Prof Terry Ryan, an economist with many years research experience on the Kenyan economy, said that the tourism sector could not generate the kind of quality jobs that are needed to lift the majority of Kenyans who still live in abject poverty.

Ryan was reacting to the economic survey report that was released on Monday by Planning and National Development minister Mr Henry Obwocha. The sector, according to the report, experienced a growth of 14.9 per cent last year, earning the country Sh56.2 billion up from Sh48.9 billion in the year 2005.

The economic professor said that it is important for the Government to allocate more resources to the sectors that affect a majority of the population, such as agriculture.

Ryan's sentiments seemed to echo the Pubs, Entertainment and Restaurant Association of Kenya (Perak) national chairman Mr Walter Reif's recent sentiments that the tourism sector was not benefiting the locals owing to the increased all-inclusive tour packages being offered by tour operators.

Reif said that all-inclusive tour packages were denying international tourists the chance to venture out of their designated hotels and as a result were denying local operators earnings from the tourism industry.

Prof Ryan also warned about the shrinking water and electricity supply, saying that these were crucial infrastructural support services that have to grow in tandem with the economy.

Overall electricity and water supply diminished by 0.9 per cent last year according to the report released on Monday.

Elsewhere the International Monetary Fund said it expects Kenya's economy to grow at more than six per cent in 2007/08, in line with government projections.

"We broadly share the authorities' outlook for the economy, with real GDP growth projected at over six per cent," IMF resident representative Mr Scott Rogers said in a statement.

An IMF mission visited Kenya earlier this month and said prudent fiscal policies had fostered economic growth and a fall in the inflation rate. Inflation dipped to 5.7 per cent in April compared to 14.9 per cent in the same period of 2006.

The visiting Fund team also discussed higher spending on health, education and infrastructure with Government officials, and lower domestic borrowing to keep interest rates in check.

In 2006, the IMF and World Bank delayed handing over millions of dollars in aid to Kenya over graft scandals, but both institutions resumed lending to country this year.

Additional report from Reuters