Strong agriculture pulls up Kenya GDP growth to 4.7pc

Agriculture powered the growth of the economy in the third quarter to record 4.7 per cent compared to 4 per cent in the same period last year.

The sector, that recorded a low of 2 per cent in the first quarter, dramatically improved in the third quarter to 6.9 per cent to anchor the growth of the economy that has been struggling to reach the 7.1 per cent growth rate experienced in 2007, before the post election violence that clawed back the gains.

Other sectors that registered high performance were manufacturing, transport and communication, and the electricity generation boosted by heavy rains in the country.

Other sub-sectors in agriculture that registered growth were forestry and fishing.

The effect of maize disease in South Rift was offset by the adequate rains in other parts of the country. Production of maize, beans, sugar cane and fruits improved significantly in the period under review.

“The expansion was more robust in comparison to preceding quarters of 2012 primarily due to strong performance of the agriculture and forestry, fishing, manufacturing, transport and communication and turnaround of the electricity industry,” said the Kenya National Bureau of Statistics in its latest report on the economy.

The period was characterised by low inflation that averaged 6.4 per cent compared to high 16.5 per cent in the same period in 2011 on account of lower food and fuel prices.

The interest rates remained high at 13.6 per cent which was however an improvement compared to 18 per cent in same period in 2011, which was attributed to Central Bank maintaining a tight monetary policy.

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

Electricity and water supply increased by 13.7 per cent compared to 11.1 per cent due to the heavy rainfall, increasing hydro-power by 39 per cent and reducing thermal generation by 25.2 per cent. Geothermal production declined by 2.3 per cent in the period.

Hotels and restaurants were hit hard by terrorism and slowdown in economies of Europe and America as visitors reduced to 342,135 in the third quarter from 383,100 last year.

Construction was slowed down by high interest rates, recording only 0.6 per cent growth compared to 3.6 per cent last year which was mirrored by low production and consumption of cement. In the third quarter of 2011, cement production grew by 8.9 per cent and consumption by 7.7 per cent.

Transport and communication recorded 5.2 per cent growth in the period under review compared to 3.9 per cent last year boosted by the communication sub-sector that registered significant 54.5 per cent growth.

Despite the export cargo contracting by 24 per cent, the Mombasa port registered growth in volume of cargo mostly boosted by increase in imports that registered 11.4per cent.

The financial sector overcame the challenge of high interest rates to record 6.8 per cent growth compared to 7.6 per cent in the same period last year.