Economy shrugs off poll fears, drought to create 800,000 jobs
8 months ago, 26 Apr 00:11
Kenya’s economy shrugged off prolonged election jitters and a biting drought to create more than 800,000 jobs.
However, economic growth slowed down from the previous year, latest official data shows.
The Economic Survey 2018, released yesterday, shows the economy grew by 4.9 per cent last year and is expected to accelerate to 5.8 per cent this year — nearing the 5.9 per cent growth rate of 2016.
The data is expected to inform policies for recovery, with National Treasury Secretary Henry Rotich saying regression in agriculture, the country’s main economic activity, would be reversed through value addition.
Funding for agri-processing plants in each county is expected to be announced in the Budget to be read in June.
Following the handshake deal between President Uhuru Kenyatta and ODM leader Raila Odinga, political noise has quietened, allowing reconciliation and prioritisation of the development agenda.
Nearly all sectors of the economy are expected to ride on political stability, good rains for agriculture and electricity generation, a shift in government policies, and strengthened devolution.
According to the Kenya National Bureau of Statistics report, more investments will be undertaken in the government’s 'Big Four' priority areas — universal healthcare, affordable housing, manufacturing and food security.
Low performance in these areas dampened the overall growth of the economy last year.
'BIG FOUR' AGENDA
The report cites education, public administration, ICT, wholesale and retail trade, accommodation and food services as the sectors that posted accelerated growth in 2017, compared with 2016.
According to Mr Rotich, key investments in the 'Big Four' agenda will put the country’s economy back on track.
“Over the medium term, growth is projected to increase by more than seven per cent due to investments in strategic areas under the Big Four Plan,” Mr Rotich said.
“These include increasing the share of the manufacturing sector to GDP by 15 per cent, ensuring all citizens enjoy food security and improved nutrition by 2022, expanding universal health coverage and delivering at least 500,000 affordable housing units.”
According to the report, the manufacturing sector posted a marginal growth of 0.2 per cent in 2017 compared with a revised growth of 2.7 per cent in 2016.
Uncertainties related to the 2017 poll, high cost of inputs, rise in inflation and stiff competition from cheap imports were blamed for the decline.
Mr Rotich said the government would implement different initiatives that are expected to help the manufacturing sector post a return of 15 per cent share to the GDP by 2022.
This will be achieved by focusing on areas that the country has a comparative advantage in, including leather, textiles and construction materials.
The measures include introduction of discounted night-time electricity tariffs last December and review of the work permit regime in favour of expatriates with skills needed in the sector.
Mr Rotich also said 1,000 small and medium sized enterprises (SMEs) focused on manufacturing would be facilitated to get affordable capital, skills and markets.
“Other programmes lined up in this sector ...
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