Commodities

Cement usage rises 27pc in five months

savanna

Savannah cement factory in Athi River. FILE PHOTO | NMG

Cement consumption in Kenya increased by 26.6 percent in the first five months of the year, driven by ongoing infrastructure projects such as the Nairobi Expressway and rising activity in the real estate sector.

Data from Kenya National Bureau of Statistics (KNBS) show consumption of cement stood at 3.35 million metric tonnes in the January to May period compared to 2.64 million metric tonnes in the corresponding period last year.

Production from the cement manufacturers also increased in the period, by 27.3 percent to 3.38 metric tonnes from 2.65 million metric tonnes last year.

The jump in consumption has been partly attributed to public infrastructure projects especially in the roads and dams segments.

Their effect on cconsumption is similar to what was seen when the standard gauge railway was being constructed.

“Cement production has been strong, aligned with consumption of the product. This has been supported in part by the strong government infrastructure spending,” said Central Bank of Kenya (CBK) governor Patrick Njoroge during a briefing on the July 26 monetary policy committee (MPC) meeting.

Ongoing projects such as 27.1km Nairobi Expressway, the upgrade of James Gichuru – Rironi highway, the dualling of the Kenol-Marua road, the Nairobi Western Bypass and the affordable housing projects are expected to sustain consumption in the coming year.

Other areas of the country are also seeing road building and construction programmes, such as Mombasa’s Dongo Kundu bypass, the Eldoret bypass and the Lamu Port.

The private sector building and construction segment is also recovering, having been among the worst hit by restrictions that have been intermittently imposed in the past one-and-a-half years due to the Coid-19 pandemic.

CBK data shows that credit demands from the real estate sector are going up, signalling a revival of activity.

The loan book to the building and construction sector expanded to Sh121.7 billion in May from Sh116.4 billion in same period last year, although the sector is still contributing significantly to the high stock of non-performing loans.

According to Architectural Association of Kenya, improvement in the sector is pegged on economic recovery, with Kenya projected to record growth of up to six percent this year.