SME News

Agriculture helps Kenya GDP rise to 4.7 per cent

Agriculture helped boost the economy in the third quarter to register 4.7 per cent as compared to 4 per cent in the same period last year.

The sector that had recorded a low 2 per cent in the first quarter improved in the third quarter to 6.9 per cent to help the growth of the economy that had struggled to record the 7.1 per cent growth rate that was seen in 2007, before the post-election violence which took away the gains.

Other sectors that recorded high performance were manufacturing, transport and communication, and electricity generation which was helped by heavy rains in the country. Other sub-sectors in agriculture that registered growth were forestry and fishing.

The effect of the maize disease in South Rift was balanced by adequate rains in other parts of the country. The production of maize, beans, sugar cane and fruits improved rather well in the period under review.

In its latest report on the economy, the Kenya National Bureau of Statistics said that the expansion was healthier in comparison to the preceding quarters of 2012 mainly due to the strong performance of the agriculture and forestry, fishing, manufacturing, transport and communication and turnaround of the electricity industry.

The period saw low inflation that averaged 6.4 per cent as compared to the high 16.5 per cent during the same period in 2011 due to lower food and fuel prices.

The interest rates stood high at 13.6 per cent which was an improvement as compared to 18 per cent in same period in 2011, which could be due to the Central Bank maintaining a tight monetary policy.

Manufacturing remained at a high by rebound in processing of sugar that recorded 48.7 per cent compared to 38.2 per cent in the same period last year. Other products were beer at 17.1 per cent, wheat flour at 16.3 per cent and maize meal at 9.3 per cent. Motor vehicle tyres, laundry and toilet soaps recorded the highest growth in the non-food category.

Electricity and water supply went up by 13.7 per cent compared to 11.1 per cent due to heavy rainfall, raising hydro-power by 39 per cent and reducing thermal generation by 25.2 per cent while Geothermal production went down by 2.3 per cent in the period.

Hotels and restaurants were the worst hit due to terrorism and slowdown in economies of Europe and America as the number of visitors reduced to 342,135 in the third quarter as compare to 383,100 last year.

Construction had slowed down due to high interest rates and had recorded only 0.6 per cent growth as compared to 3.6 per cent last year which was touched by low production and consumption of cement. The third quarter of 2011 saw cement production grow by 8.9 per cent and consumption by 7.7 per cent.

Transport and communication recorded a growth of 5.2 per cent in the period under review as compared to 3.9 per cent last year due to the boost in the communication sub-sector which registered a growth of 54.5 per cent.

Even though export cargo came down by 24 per cent, the Mombasa port registered growth in the volume of cargo which was boosted by increase in imports that registered 11.4 per cent.

The financial sector met the challenge of high interest rates and recorded a growth of 6.8 per cent as compared to 7.6 per cent in the same period last year.

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