NAIROBI, APR 25 — Kenya’s economy performed dismally in 2017 falling below its East Africa peers of Tanzania and Rwanda, the Kenya National Bureau of Statistics — Economic Survey 2018 shows.
Growth in the East Africa’s economic power house dropped to 4.9 per cent from 5.9 per cent in 2016, blamed on last years’ prolonged electioneering period in the country, subdued credit to the private sector and the drought that hit the country.
Kenya only managed to perform better than Uganda which had a growth of 4.4 per cent last year.
Agriculture and Manufacturing which are the key sectors of the economy recorded restrained growth of 1.6 per cent and 0.2 per cent respectively.
Growth in the Manufacturing sector has been sluggish in the past five years. The sector’s real gross value went down last year from a revised growth of 2.7 per cent in 2016.
According to KNBS Director General Zachary Mwangi, the sector was also affected high production costs and competition from imported goods.
Total value of mineral output increased by 2.0 per cent to Ksh23.8 billion in 2017, boosted by increase exports of Titanium minerals from Base Titanium’s Kwale mineral sand project.
The construction sector recorded a slower growth of 8.6 per cent in 2017 compared to a 9.8 per cent growth in 2016.
“Cement consumption decreased by 8.2 per cent in 2017,” Mwangi said, noting that the drop was as a result of among others, completion of phase one of the Standard Gauge Railway from Mombasa to Nairobi which reduced demand.
Loans and advances to the sector however increased from Ksh104.8 billion in 2016 to Ksh109.9 billion in 2017.
Despite the challenges, the economy managed to create 897,000 new jobs, a 7.7 per cent increase from 832,900 jobs created in 2016.
The survey launched by Treasury Cabinet Secretary Henry Rotich on Wednesday shows the informal sector contributed 787,800 of the new jobs while the formal sector had 110,000 new jobs during the year.
“I am glad to note that the new numbers we present today will provide benchmark statistics for monitoring economic performance including the Big 4 Economic Transformation Agenda, focusing on manufacturing, food, nutrition and security, universal health coverage, and affordable housing as key pillars,” Rotich said.
He said the economy is expected to rebound in 2018 to record a growth of 5.8 per cent.
“Over the medium term, growth is projected to increase by more than 7.0 per cent due to investments in strategic areas under “The Big Four” Plan,” he said.
These include increasing the share of manufacturing sector to Gross Domestic Product, ensuring all citizens enjoy food security and improved nutrition by 2022.
Rotich also noted that the economy will be driven by a healthy working nation as the government moves to expand universal health coverage and delivering at least five hundred thousand (500,000) affordable housing units.
“These efforts will support the business environment, create jobs and ultimately promote broad based inclusive growth,” he said.