Economy

Manufacturing, agriculture put brakes on Uhuru’s growth plan

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President Uhuru Kenyatta. FILE PHOTO | NMG

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Summary

  • Slow growth of manufacturing and agriculture has cast a long shadow on President Uhuru Kenyatta’s effort to lift the economy to a double-digit growth in the next three years.
  • Official data released last week shows manufacturing expanded at a slower pace of 3.1 percent in the three months to September, a suppressed growth compared to 4.6 percent in the third quarter of 2018.
  • Similarly, agriculture expanded by 3.2 percent over the period compared to 6.9 per cent in the third quarter of 2018.

Slow growth of manufacturing and agriculture has cast a long shadow on President Uhuru Kenyatta’s effort to lift the economy to a double-digit growth in the next three years.

Official data released last week shows manufacturing expanded at a slower pace of 3.1 percent in the three months to September, a suppressed growth compared to 4.6 percent in the third quarter of 2018.

Similarly, agriculture expanded by 3.2 percent over the period compared to 6.9 per cent in the third quarter of 2018.

“The deceleration in growth was mainly on account of suppressed growth in most of the sectors of the economy...occasioned by relatively slower growths in activities of manufacturing...,” the Kenya National Bureau of Statistics (KNBS) states in the GDP report for the third quarter of 2019.

The Jubilee government in 2018 launched Big Four Agenda targeting manufacturing, agriculture, health and housing in its plan to put the country on a high growth trajectory.

Under the plan, both sectors were supposed to be growing by 10 percent annually with manufacturing tipped to account for 15 percent of the GDP by 2022, up from nine percent at the moment.

“The slowed (manufacturing) growth was due to low level of activity in the two main subsectors including manufacture of food products and non-food products,” the KNBS says, citing constrained processing of sugar, tea, fish and biscuits during the period.

Under the Big Four blueprint, manufacturing was to create 1.3 million jobs before the end of Mr Kenyatta’s five-year administration.

Industrialists have cited high power costs despite the 2018 introduction of a 30 percent rebate on the total electricity consumed by manufacturers.

The President’s plan also targeted production of 20 million shoes by 2022 from local leather industry to generate export revenue to Sh50 billion. Textile production was expected to create 50,000 more jobs by 2022.

Latest data, however, shows Kenyans have stepped up their importation of second-hand clothes and shoes, spending a total of Sh17.8 billion on the items in the nine months to September.

According to KNBS, processing of grain mill products, manufacture of beer, and edible fats and margarine went up.