CBK Governor forecasts quick rebound from coronavirus

Kenya’s economy has performed better than expected amid the onslaught by the coronavirus pandemic as the country inches closer to recovery.

The Central Bank of Kenya (CBK) Governor Patrick Njoroge said the expectation that the country was going to sink so much further is cancelled out by the new economic data. He reckons growing farm exports and a recovery in remittances have helped improve an otherwise tough trading environment.

The economy took a beating in April after the first Covid-19 case was reported, before picking up in May as Kenyans started to find ways to live with the virus.

The CBK had earlier projected that the gross domestic product in the second quarter would decline due to the adverse economic impact caused by the virus. Yet, by May the country’s key economic sectors started to emerge from the stranglehold of Covid-19, according to the Governor.

“We are a diversified economy. We depend 20 per cent on our immediate neighbours, 40 per cent on the regional market and we boast of a diversified export market,” said Njoroge during a press briefing yesterday.

“This has cushioned us from experiencing extreme shocks to the economy.” The agricultural sector, for instance, which contributes a quarter of the country’s growth posted significant growth in May and June.

Tea production rose by 23.5 per cent in May as horticultural exports increased by 22.7 per cent, moving closer to levels they were before the pandemic. Remittances from Kenyans living abroad — recovered to $258 million in May from $208 million in April.

While the regional economy is expected to contract by 3.2 per cent, Dr Njoroge said Kenya might not feel the impact of the contraction.