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Sluggish growth of critical sectors makes life difficult

By Moses Michira | Updated Thu, April 20th 2017 at 08:13 GMT +3
From left: Economic Planning PS Joseph Mukui, KNBS board member Ezra Odhiambo, Mining CS Dan Kazungu, Devolution and Planning CS Mwangi Kiunjuri and Planning and Statistics PS Irungu Nyakera during the launch of 2017 Economic Survey Report in Nairobi. (Photo:David Njaaga/Standard)

Critical sectors, including agriculture and manufacturing, struggled in last year to ensure President Uhuru Kenyatta’s promise of a double-digit growth remains elusive.

A prolonged drought ravaged food production, with the ripple effects being felt in manufacturing and impacting on creation of new jobs.

Devolution and Planning Cabinet Secretary Mwangi Kiunjuri announced Wednesday that the Kenyan economy reported a flat growth of 5.8 per cent.

This effectively means that a key Jubilee election pledge that economic growth would surpass 10 per cent under its watch remains a mirage.

“Our economy relies heavily on rain-fed agriculture but we are making heavy investments on irrigation farming,” Mr Kiunjuri said.

His predecessor Ann Waiguru announced that the economy expanded by 5.7 per cent in 2015.

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Growth in agriculture was at a sluggish 4 per cent, compared to 5.5 per cent in the previous year, bogged down by the prolonged drought.

Maize production was down by 6.4 million bags to wipe out the growth reported on other crops such as coffee, tea and horticulture. Ugali as a result became costlier due to the maize shortage.

Earnings from exported agricultural products rose as a result of better prices and improved yields, with tea leading at Sh116 billion, Sh101 billion in horticulture and Sh16 billion from coffee.

A slowdown in agriculture has already led to a sharp increase in food prices, hurting the poor while taking away jobs along the supply chain.

Manufacturing was cited as having taken a beating as most of the activity in the sector relate to processing of harvested agricultural commodities.

“The sector’s (manufacturing) growth remained stifled in the period under review mainly attributable to under-performance of other sectors such as agriculture and electricity that provide inputs for manufacturing activities,” the economic report reads.

Manufacturing grew by 3.5 per cent, marginally lower than 3.6 per cent recorded previously.

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Key drivers of the lacklustre growth last year were tourism, telecommunication, real estate and education sectors. Heavy investment in security has started to pay off in rebooting the tourism sector which has in the recent years suffered heavy losses from terrorism.



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