Kenya’s economic growth slowed for a fourth straight quarter as its worst drought in at least 40 years, and pre-election jitters weighed on output.
Gross domestic product increased by 5.2% from a year earlier in the second quarter, down from a 6.8% gain in the previous three months, the Kenya National Bureau of Statistics said, citing it was the slowest pace of expansion since the first quarter of last year when restrictions to contain the coronavirus pandemic weighed on the economy.
Agriculture, Kenya’s biggest economic sector and employer, contracted for a third straight quarter due to a prolonged drought that has left almost 5.5 million people facing hunger, according to the United Nations, as agricultural output declines.
Farming activities — which account for more than a fifth of Kenya’s GDP— slid 2.1 per cent, a deeper contraction than 0.5 per cent in a similar quarter the year before.
“Agriculture, forestry and fishing activities’ value added contracted for the third consecutive quarters, mainly attributed to unfavourable weather conditions that characterised the last quarter of 2021 and the first half of 2022. The performance of the sector was evident in the significant decline in exports of vegetable and cut flowers, and production of tea, coffee and milk.” the State statistics body wrote in the quarterly GDP report last evening.
The expansion in economic activity was further dragged by inflation, which averaged 7.16 per cent in the quarter compared with 5.98 per cent a year earlier.
This was majorly driven by the increased cost of food and fuel, which followed the Russian invasion of Ukraine, exacerbating disruptions in global supply chains that were yet to recover from Covid-19 lockdowns.
The shilling also depreciated 7.9 per cent against the US dollar in the review period to exchange at an average of 116.33 units, according to the KNBS, further raising prices in a net import economy.
Growth in the manufacturing sector, which had complained of unrelenting global supply chain disruptions and difficulties accessing adequate dollars to pay suppliers abroad, slowed to 3.6 per cent from 11.3 per cent in the same quarter last year.
KNBS attributed the growth in manufacturing to increased production of meat, fish, bakery products, cement and assembly of motor vehicles, but pulled down by dairy products and edible oils.
Read also; CBK Expects Kenya’s Inflation to Remain Elevated Due to Scrapping of Subsidies.
