Kenya’s economic growth up by 6.3%


Kenya's economic growth up by 6.3%
File image of Nairobi City. PHOTO| COURTESY

In Summary

  • While the majority of crucial economic segments recorded exemplary growth, it is agriculture that held the most dividends creating a knock on effect in the excelling of subsequent economic sectors.
  • Real value added in agriculture accelerated to 6.6 percent, the highest growth rate in five years attributed to increased productivity under conducive weather conditions as the market production value for the sector topped Ksh.497.8 billion in 2018.
  • Kenya’s GDP growth on an account of convenient weather has however been put under the microscope with experts warning of perverse outcomes to economic growth in the advent of reversing weather patterns which remain a real risk under ongoing climate change concerns.

Kenya’s Gross Domestic Product (GDP) expanded by 6.3 percent across 2018 as the country’s key economic segments recovered from their depressed status on the back of a deplorable environment in 2017.

While the majority of crucial economic segments recorded exemplary growth, it is agriculture that held the most dividends creating a knock on effect in the excelling of subsequent economic sectors.

“We have noted the issue of sufficient rains and the multiplier effect that agriculture has on growth in other sectors,” said Kenya National Bureau of Statistics Director General Zachary Mwangi during the release of the 2019 economic survey on Thursday.

Real value added in agriculture accelerated to 6.6 percent, the highest growth rate in five years attributed to increased productivity under conducive weather conditions as the market production value for the sector topped Ksh.497.8 billion in 2018.

Under the improved performance, maize production increased by 26 percent to 44.6 million bags while tea and coffee production recorded growths of 12.1 and seven percent respectively over the review period.

Growth in manufacturing kept in tandem with the recovery in agriculture as the real value added in the sector increased by 4.2 percent in yet another five-year high record on account of increased agro-processing activities.

The growth in agro-processing was linked to the increased production of dairy products, tea, coffee and sugar under the favorable weather conditions.

Under the manufacture of food and beverages, improved growth was recorded in the manufacture of sugar, the processing of liquid milk and black tea and the manufacture of beer and soft drinks.

Improved rainfall across 2018 further stimulated the improved delivery of electricity supply as a share of total energy generated reached 86 percent from an initial 73.3 percent at the end of 2017.

Cognizant of the close linkages between conducive weather patterns, the performance of the agriculture sector and the consequential achievement of subsequent economic segments, National Treasury Cabinet Secretary Henry Rotich emphasized on the need for supportive interventions on the currently rain-dependent sector.

“To continue supporting the agricultural sector, the government will continue to invest in irrigation to reduce the dependence on rain-fed agriculture and increase the amount of land under crop production in addition to targeted reforms and agendas to boost food security,” he said.

Kenya’s GDP growth on an account of convenient weather has however been put under the microscope with experts warning of perverse outcomes to economic growth in the advent of reversing weather patterns which remain a real risk under ongoing climate change concerns.

The Parliamentary Budget Office (PBO) has already termed the impressive growth across 2018 as a bluff to warn of a potential under-performance in real growth.

According to the PBO, the growth in Gross Domestic Product (GDP) across 2018 has been achieved through chance rather than on measurable interventions by the State in agriculture productivity.

This as the return of improved weather conditions stands out as the central reason for the rebound in growth from the 4.9 percent GDP improvement recorded in 2017.

The Kenya National Bureau of Statistics economic survey has already warned of risks to growth in 2019 attributing their concerns to witnessed delay in the onset of the long rainfall season.

Further to the weather-based risks, is the projected cutback in the production of crude by the Oil Producing and Exporting Countries (OPEC) cartel as it seeks out greater output prices for the commodity which is likely to have an effect of raising the inflationary risks in the country.

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Story By Kepha Muiruri
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