advertisement

Economy

Poll fears cut industrial machinery imports

Cargo at the Mombasa port. FILE PHOTO | NMG
Second container terminal at the Mombasa port. FILE PHOTO | NMG 

Shipments of industrial machinery into Kenya dropped by Sh5.7 billion in the quarter to September last year, reflecting a cooling of economic activity during a period of prolonged election cycle.

Official data shows traders cut back on imports of capital goods to Sh59.7 billion between July and September, from Sh65.4 billion in a similar period a year earlier, representing an 8.7 per cent drop.

This came in the months surrounding the high-stakes August 8 presidential polls whose results were nullified by the Supreme Court and ordered a repeat poll, forcing traders to cut back on investments.

The slowdown in industrial spending works against Kenya’s quest to rev up its manufacturing engines for growth and jobs creation.

The sector has stagnated at 10 per cent of the gross domestic product for the past 10 years, despite previous government efforts to put the economy on the path to industrialisation by 2030.

Kenya’s economy grew by 4.4 per cent in the third quarter of 2017, the slowest quarterly growth in five years, hamstrung by electoral politics and drought, according to data from Kenya National Bureau of Statistics (KNBS).

The downturn was mirrored by Stanbic Bank’s #ticker:CFC monthly market survey which indicated that industrial output tumbled to a nearly four-year low in September, shaken by the prolonged electioneering period and drought.

The KNBS data shows that machinery imports dropped to Sh59.7 billion in the third quarter of 2017, from Sh60.8 billion in the second quarter and Sh66.7 billion in the first three months of the year.

advertisement