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Economy

Nairobi building plans fall Sh5bn on poll jitters

Youths protest in Kisumu on October 11, 2017. Political tension has hit economic activities. photo | tonny omondi | nmg
Youths protest in Kisumu on October 11, 2017. Political tension has hit economic activities. photo | tonny omondi | nmg 

The value of approved building plans in Nairobi slumped by Sh5.1 billion in the seven months to July as real estate investors cut back on spending due to poll jitters.

Official data shows that City Hall approved plans valued at Sh149.5 billion, down from Sh154.6 billion in a similar period a year earlier.

The cutbacks came amid drops in cement output and consumption, data from Kenya National Bureau of Statistics (KNBS) shows, in the first drop in more than a decade.

Factories reduced cement production seven per cent to 4.2 million metric tonnes in the year to August down from 4.5 million metric tonnes.

The deepest cut was experienced in August when Kenya held its General Election, underlining the election fever effects on the economy.

The cuts came in response to a cooling demand after consumption dropped 6.4 per cent to 2.9 million metric tonnes in the first half of the year, KNBS data shows.

“We have recorded a drop in activity with the general slowdown in the economy due to political tensions,” said Steven Oundo, chairman of National Construction Authority.

Cement use cuts and a drop in the value of building plans point to a cooling construction sector. The cement sector has thrived in recent years as a result of a boom in the real estate sector, as well as mega infrastructure projects undertaken by the government.

But the prolonged electioneering period after the Supreme Court called for a repeat presidential poll on September 1 has shaken key economic sectors.

Over the past couple of months, the Opposition and the ruling party have engaged in bitter rhetoric, spooking investor confidence and causing sharp drops in industrial output as well as consumption of diesel.

The Kenya Private Sector Alliance said most investors had postponed their decisions awaiting a political settlement — a decision that has triggered a slowdown in spending and consumption of goods. 
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