Kenya’s Finance Minister Henry Rotich on Wednesday said the country’s economy is expected to rebound to 5.8 per cent growth, having slowed down in 2017 due to a prolonged electioneering period.
Rotich tipped the East African country’s economy to benefit from increased investment in key areas like manufacturing, farming, housing and healthcare.
“Despite the slowdown in 2017 our outlook is bright,” Rotich said at the launch of the annual economic survey. “We expect growth to recover to 5.8 percent in 2018 and over the medium term the growth is projected to increase by more than 7 percent.”
According to Kenya’s statistics office, growth slowed down to 4.9 percent last year from a revised 5.9 per cent in 2016.
The country conducted two presidential elections, during which ethnic tensions soared prompting a slow-down in investment.
Kenya’s diversified economy is better able to withstand shocks like the commodity price drop that started in 2014 and hit oil-producing African countries such as Nigeria and Angola.
But its economy was hobbled by a severe drought in the first quarter of last year that was followed by poor rainfall.
The services sector including tourism grew strongly last year and that helped to offset the slowdown in farming and manufacturing, said Zachary Mwangi, director general of the Kenya National Bureau of Statistics.
Tourism is vital for hard currency and jobs and grew 14.7 percent while earnings surged 20 percent, he said.
In contrast, growth in the agriculture sector, which accounts for close to a third of overall output, slid to just 1.6 percent in 2017 from 5.1 percent the year before.
The government says manufacturing is a priority due to its potential to create jobs and it grew at 0.2 percent last year from 2.7 percent the year before.