Economy rebounds after election slowdown

Kenya’s economy is expected to rebound to 5.8 per cent growth in 2018 after slow growth in 2017, Finance Minister Henry Rotich said on Wednesday.

Rotich said at the launch of the annual economic survey in Nairobi that the economy would benefit from increased investment in key areas like manufacturing, farming, housing and healthcare.

“Despite the slowdown in 2017, our outlook is bright,’’ Rotich said.

“We expect growth to recover to 5.8 per cent in 2018 and over the medium term the growth is projected to increase by more than seven per cent.’’

The statistics office had reported that growth slowed to 4.9 per cent last year from a revised 5.9 per cent in 2016.

Electoral uncertainty and drought cut last year’s expansion to the lowest level in more than five years.

President Uhuru Kenyatta won re-election in November 2017 in a second vote after the first in August was annulled by the Supreme Court citing irregularities.

Around 100 people, mainly opposition supporters, were killed by police during the prolonged election season.

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.

Production of cement, sugar and processed milk slid as firms reeled from the impact of the election and high costs.

Rotich said the projected economic rebound was supported by favourable economic fundamentals, including inflation, which had dropped to about four per cent this year.

“The ongoing investments in infrastructure, improved business and factory confidence and strong private consumption are expected to support growth,’’ he said.