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Government's cheap housing project lifts building sector

BUSINESS
By Peter Theuri | April 29th 2020

Completion of the Standard Gauge Railway (SGR) in 2018 led to a deceleration in the overall growth of the construction sector, Kenya National Bureau of Statistics (KNBS) data shows.

The government’s investments in road construction and development of housing projects under the affordable housing programme of the Big Four agenda were, however, on hand to compensate for losses observed by the termination of the mega SGR projects.

The gross value added in the construction sector rose by an estimated 6.4 per cent in 2019 compared to 6.9 per cent in 2018.

Consumption of cement, however, showed a marginal drop, from 5.95 million tonnes recorded in 2018 to 5.93 million tonnes last year.

During the period under review, the total length of roads paved increased by 14.2 per cent to 21,295.1 kilometres as the government sought to open up the country to boost sectors such as tourism and to encourage investment.

Uptake of credit in the construction sector grew by 1.6 per cent in 2019 compared to a 1.8 per cent growth in 2018.

In the report, it is projected that the total government expenditure on roads will rise by 10 per cent from Sh154.5 billion in 2018/19 to Sh169.9 billion in 2019/20.

Take a blow

The number of completed public residential buildings was 530 with a total of 5,134 housing units still under construction by the National Housing Corporation and the state department of housing.

But with the onset of the coronavirus, the real estate industry might take a blow that will result in a significant reduction in construction material sales.

The construction industry contributed 5.6 per cent to the gross domestic product, slightly higher than the 5.5 per cent contribution experienced in 2018.

Interestingly, the growth in the industry has slowed down with time, with percentage growths of 13.8, 9.9, 8.4, 6.9 and 6.4 experienced in the last five years respectively.

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