Economy to grow by 4-5 percent, says minister

By Muthui Ndegwa

The Government projects that the economy will grow by 4 to 5 percent in 2010 as economy stabilises due to good weather and rising tourism numbers.

Kenya’s economy grew significantly last year compared to 2008 when it recorded minimal growth when the country was ravaged by drought and effects of global recession. According to Economic Survey Report released today by Minister for Planning and National Development and Vision 2030, Wycliffe Oparanya, the economy went up 2.6 % in 2009 while in 2008 was just 1.6 %.  The economic performance indicators are in time as Finance Minister Uhuru Kenyatta prepares to read the 2010/2011 budget on June 10.

"The domestic economy is expected to continue recovering this year," said Oparanya.

Planning Minister Wycliffe Oparanya.

Kenya recorded higher growth compared to Africa average of 1.9 percent in Sub-Saharan countries excluding oil-producing nations largely attributed to slow demand of goods and services. The country had enjoyed tremendous growth from 2003 to 2007 when it hit seven percent in 2007 only to shrink to 1.6 percent in 2008 due to effects of post-election violence and famine.

The minister said the government stimulus package, improved investor confidence and proper management of monetary policy brought about economic stability and yielded growth.

Oparanya cited tourism, building and construction and transport sectors as the key drivers of growth in 2009. Tourism grew from negative 32% in 2008 to 42 %, building and construction recorded 14 percent, transport 6.4 % and fishing 7.4 %.

However, agriculture sector, which is backbone of the economy showed negative growth of minus 2.6 %, the same in mining at minus 2.4 %.

Employment went up by 4.5 % driven by increased business activity on the back of easy access to credit and investment financing.

The economic survey is done by Kenya Bureau of Statistics and provides economic and social indicators every year, data that is used by the Ministry of Planning and Treasury to make annual budget and developing economic policy.

More reports and analysis shortly.