Kenya’s economy expanded marginally to 5.8 percent in 2016 -KNBS

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The overall expenditure on roads is expected to increase by 38.3 per cent from KSh 113.2 billion in 2015/16 to KSh 156.5 billion in 2016/17, a survey by the national bureau of statistics (KNBS) indicates

The 2017 economic survey also indicates that during the same period, total development expenditure will also grow by 31.7 per cent from KSh 87.8 billion to KSh 115.6 billion, development expenditure on trunk and primary roads to grow by 36.2 per cent from KSh 51.6 billion to KSh 70.3 billion

The construction industry grew by 9.2 per cent 2016 from an expansion of 13.9 per cent registered in 2015.

Increased activity in the construction of roads and development of housing also translated to an increase in employment in the sector from 148.6 thousand jobs in 2015 to 163.0 thousand jobs in 2016. Construction of Phase I of the Standard Gauge Railway (SGR) was at the final stages of completion as at the end of 2016.

The disbursement of funds from the Roads Maintenance Levy Fund (RMLF) by Kenya Roads. Board (KRB) to various road agencies and county governments is anticipated to increase significantly to KSh 40.9 billion in 2016/17 from KSh 25.4 billion in 2015/16.

National Housing Corporation (NHC), the government agency for housing, undertook. Several housing activities in 2016, at a total cost KSh 877.9 million.

The value of reported new buildings completed in Nairobi registered a growth of 7.6 per cent to KSh 76.2 billion in 2016.The value of reported building plans approved in Nairobi increased by 43.3 per cent from KSh 215.2 billion in 2015 to KSh 308.4 billion in 2016.

The index of government expenditure on roads increased from 350.3 in 2015 to 461.0 in 2016 following an increase in road construction projects. Consumption of cement, a major input in

The construction industry generally recorded a 9.7 percent growth in the period under review compared to a 13.9 percent growth registered in 2015.

Despite the tough economic environment which has seen major sectors record subdued growth, Kenya’s economy grows marginally to 5.6pc

The slow growth led to fewer jobs created in 2016 at 832,900 compared to 841,600 in 2015, with nearly 750,000 (90 percent) of new jobs created in the informal sector.

According to the Survey, tourism was the best performer as international arrivals went up by 13.5 percent to 1.34 million in 2016 from 1.18million in 2015.Revenue from the sector went up by 17.8 percent to Sh99.7 billion from Sh84.6 billion in 2015.

Information Communication and Technology was also a major driver of the economy growing at 9.7 percent in 2016 compared to 7.4 percent growth in 2015.

The value of the ICT output in the period under review went up by 11.1 percent to Sh311.1 million in 2016 from Sh280 million in 2015. Meanwhile, Mobile subscription improved by 85.6 percent from 85.4 percent in 2015.

The value of mobile money transactions hit Sh3.4 trillion in 2016 from Sh2.8 trillion in 2015.Other sectors that recorded growth includes real estate as well as transport and storage. However, key sectors regarded as the backbone of the economy recorded slow growth.

Agriculture contracted by 1.5 percent in 2016 compared to a growth of 5.5 percent in 2015 despite a rise in Tea and Coffee production by 18 percent and 10.8 percent respectively. The sector was hampered by drought in the fourth quarter of 2016.

Manufacturing recorded a 3.5 percent growth in the period under review which is a decline compared to 3.6 percent growth in 2015 even as sales from export processing growth recorded a 5.8 percent increase to Sh68.7 billion.

The financial sector also recorded a decline growing by 6.9 percent in 2016 compared to 9.4 percent growth in 2015 amidst the amendment of the banking act that introduced capping of interest rates on loans in the fourth quarter of 2016.

Import bill went down by 9.2percent to Sh1.4trillion in 2016 from Sh1.6 trillion in 2015 attributable to a decline in global oil prices in 2016 as total import bill on petroleum products declined by 12.6 percent to Sh197.5 billion.

Export earnings also declined marginally to Sh578.1 billion in 2016 from Sh581 billion in 2015. Going forward in 2017, the agricultural sector is expected to be hard hit as drought continues to bite in the first and second quarter of 2017.

Other factors likely to affect the economy include the continued deceleration in growth of credit to the private sector that has stabilized at 4 percent owing to the interest Rate capping.

Also, international oil prices are expected to rise in 2017 suppressing the transport sector growth that posted 8.4 percent growth in 2016 a slight improvement from 2015 owing to a 2.8 percent increase in total cargo throughput at the port of Mombasa as well as an increase in total commercial passengers handled in the period under review.

Compared to the East African Community Kenya’s growth is lagging behind its neighbors with Tanzania and Rwanda growing at 7.2 percent and 6 percent respectively. Uganda grew by 5.9 percent.

The East African Community registered 6.1 percent growth even as Sub Saharan Africa grew by 1.4 percent from 3.4 percent registered in 2015