Economy defies Covid blues to grow by massive 9.9 per cent

Porters wade a flooded section of Kinyanjui Street, Gikomba. November 30, 2021. [Denish Ochieng, Standard]

Kenya's economy continued its rebound, growing by 9.9 per cent in the third quarter of 2021, aided by the easing of Covid-19 containment measures, according to data from the national statistician.

During the same period in 2020, the size of the economy contracted by 2.2 per cent, as the business activities were depressed by the social-distancing rules implemented to curb the spread of coronavirus.

The growth is one of the highest in recent years, albeit coming from a lower base in which the economy experienced negative growth in the period between July and September last year.

“During the period under review, the performance was driven by significant rebounds in most economic activities that had contracted in the third quarter of 2020,” said the Kenya National Bureau of Statistics (KNBS) in its Quarterly Gross Domestic Product (GDP).  

Some of the economic activities that underpinned this performance included education which grew by 64.7 per cent owing to the re-opening of schools after a nine-month hiatus, in which classrooms remained closed in 2020.

Transportation and storage also benefited from the removal of travel restrictions, growing at 13 per cent as both domestic and international flights resumed.

Accommodation and food expanded by 24.8 per cent while financial and insurance activities grew by 6.7 per cent.

“However, agricultural production was constrained due to drought conditions that characterised the quarter under review in most parts of the country.”

Agriculture, which is the mainstay of the country’s economy, contracted by 1.8 per cent in the review period.

It was the second successive quarter that crop growing and livestock rearing contracted owing to the crippling drought that has devastated several counties in Northern parts of the country.

In 2020, when the economy was ravaged by the negative effects of Covid-19 pandemic, it was the agricultural sector that gave it a lift with the sector growing by 4.2 per cent in the third quarter of 2020.

“The dismal performance of the sector was evident in the significant decline in fruit exports, cane deliveries, tea production and coffee exports.

The volume of fruit exports and cane deliveries declined by 19.9 and 5.6 per cent respectively in the third quarter of 2021 compared to a similar quarter of 2020.”

Drought and upcoming elections are some of the domestic risks to the country’s economy in 2022 that have been flagged by several institutions including the National Treasury and the International Monetary Fund (IMF).

To help the economy recover, President Uhuru Kenyatta’s government has lined up a third stimulus package. The economy is also expected to benefit from continued spending on Kenyatta’s Big Four Agenda even as he moves to complete some of his flagship projects.

Manufacturing sector grew by 9.5 per cent in the third quarter of 2021 compared to a 1.7 per cent contraction in the same period of 2020.

KNBS noted that the food sub-sector expanded by 8.6 per cent during the review period.

Performance of the construction sector was relatively slower in the third quarter of 2021 compared to the corresponding quarter of 2020.

“The sector recorded a growth of 6.4 per cent in the third quarter of 2021 compared to 12.5 per cent growth in the third quarter of 2020.”

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