Why Kenya’s economic growth slowed down in 2016

Kenya’s economy grew by 5.8% in 2016 compared to 5.7% in 2015, pushed down by the agricultural sector which performed poorly.

Planning Cabinet Secretary Mwangi Kiunjuri said the growth was partly spurred through the implementation of projects such as rural electrification, improvement in the ICT sector with a growth of 9.7 and job opportunities being created, with a growth of 83.3%.

Speaking on 19th April 2017, in Nairobi during the launch of 2017 Economic Survey, the CS said that the ministry will continue to monitor and regulate the economy.He said that major drivers of the growth were accommodation and food services, information and communication, real estate, transport and storage.

Some of the key sectors that recorded slowed growth include agriculture, forestry and fishing; manufacturing, construction, financial and insurance activities. According to the report, inflation eased from 6.6 in 2015 to 6.3% in 2016 mainly on account of declines in cost of transportation, housing and utilities; and communication.

Kiunjuri said the current account deficit as a percentage of GDP narrowed to 5.2 in 2016 from 6.7 in 2015. While domestic credit slowed from a growth of 20.8 percent in 2015 to 6.4 percent in 2016 mainly on account of a considerable decline in credit to the private sector.

“The fiscal deficit in 2016/17 as a percentage of GDP is expected to rise to 9.9 percent compared to 8.6 percent in 2015/16,” he added.

Kenya National Bureau of Statistics (KNBS) board member Eng. Ezra Odhiambo said the institution will ensure that policy-makers are provided with timely and reliable statistics to facilitate decision making. He noted that the bureau will strive to place greater value on further strengthening of  its statistical management systems in order to continuously improve the quality of its statistics.

Odhiambo further noted that the bureau is currently reviewing the Statistics Act 2006 in line with the Constitution of Kenya, as well as strengthening the country’s statistical capacity, with the proposed amendments having been submitted to the attorney general’s office for consideration and onward transmission to parliament.

[crp]