Kenya's gross domestic product (GDP) expanded by 5.6 per cent in 2010 compared to a growth of 2.6 percent in 2009. All sectors driving the Kenyan economy recorded positive growths of varying magnitudes registering a growth of 6.3 percent in 2010 compared to contractions of 4.1 and 2.6 per cent experienced in 2008 and 2009 respectively, the minister for National Planning and Vision 2030 Wycliffe Oparanya has said.
The turnaround was realized from the favorable weather conditions that prevailed, government intervention through supply of subsidized seeds and fertilizers; improved prices for some key agricultural whose production improved significantly in 2010, said Oparanya during the launch of Economic Survey 2011 report.
According to the report manufacturing sector grew by 4.4 per cent in 2010 compared to a marginal growth of 1.3 percent in 2009. Favorable weather conditions that bolstered electric power generation favorable tax policies, including the removal of duty on capital equipments and some raw materials, increased credit to the manufacturing sector and increased availability of raw agricultural materials, contributed.
The recovery in the global economy positively impacted on the Export processing Zones (EPZ) programmes recording an increase of Sh 5.5 billion in turnover to Sh 31.7 billion in 2010. The sector posted a more robust expansion of 8.8 percent in 2010 compared to 4.6 per cent in 2009.
Overall domestic credit grew by 30.4 percent from Sh 978.3 billion in 2009 to Sh1.3 trillion in December 2010. This growth was well above the targeted growth of 19.9 per cent. However the spread of the deposit and lending rates remains relatively high at 12.4 percent in 2010.
Additionally, the economic survey says inflation was contained within the Government’s target of 5.0 per cent in 2010. The average annual inflation was 4.1 percent in 2010 down from a high of 10.5 percent recorded in 2009.
Favorable weather in 2010 led to low food prices emanating from improved agricultural production, competition between the mobile telephone operators which resulted in reduction in calling rates, tourism earnings, which are a key source of foreign exchange earnings, rose by 17.9 per cent to Sh 73.7 billion in 2010 from Sh 62.5 billion in 2009 as the volume of international arrivals grew by 8.0 per cent from 1.49 million visitors in 2009 to 1.61 million in 2010, the minister said.
He pointed out that loans and advances from commercial banks to the construction sector grew by 7.3 per cent from Sh 30.4 billion in 2009 to Sh 32.6 billion in 2010.
Cement consumption went up by 16.2 per cent to 3.1million tonnes in 2010 compared to 2.7 million tonnes in 2009 as private building works completed in selected main towns went up significantly from Sh 21.8 billion in 2009 to Ksh 37.3 billion in 2010.
However, in 2010/11, overall Government expenditure is expected to stand at Sh 998.3 billion compared to Sh 805.3 billion in 2009/10. Total budgeted recurrent expenditure is projected to increase from Sh 620.5 billion in Public Finance 2009/10 to Sh 691.6 billion in 2010/1. Development expenditure is also expected to increase from Sh 184.8 billion in 2009/10 to Sh 306.7 billion in 2010/11.
The annual average price of oil increased to US$ 79.16 per barrel in 2010 compared to US $ 62.65 per barrel in 2009 increasing the oil prices locally; but the demand of petroleum products grew by 4.3 per cent from 3,610.8 thousand tonnes in 2009 to 3,760.7 thousand tonnes in 2010.
At the same time the total Electricity consumption registered a growth of 6.0 per cent from 5,428.6 million KWh in 2009 to 5,754.7 million KWh in 2010. The number of connections under the Rural Electrification Programme rose by 22.3 per cent from 205,287 as at June 2009 to 251,056 as at June 2010.
Further the economic survey articulates that transport and Communication sector recorded a growth of 5.9 per cent in 2010 compared to 6.4 per cent in 2009. The growth was mainly driven by expansion of transport and storage subsector. Growth in the activities of the post and telecommunication slowed to 4.4 per cent in 2010 compared to a rapid expansion of 10.0 per cent in 2009.
The mobile subscriber base reached 20.1 million in 2010 from 17.4 million in 2009. Revenue earned from cargo transportation in the railway subsector decreased from KSh 4.3 billion in 2009 to KSh 4.1 billion in 2010.
On Kenya’s trade balance, it worsened by 21.3 per cent in 2010 compared to the earlier deterioration of 4.1 per cent in 2009. The current account balance widened to a deficit of Sh 199.2 billion in 2010 from a deficit of Sh 129.2 billion in 2009.
Total Government allocation to the social sector is expected to increase by 24.5 percent from Sh 208.8 billion in 2009/10 to Sh 259.9 billion in 2010/11.The allocation to Education subsector is expected to reach Sh 193.3 billion in 2010/11while that of health subsector is expected to reach Sh 31.6 billion in 2010/11.
Total development expenditure on water supplies and related services is expected to increase by 40.8 per cent from KSh 22.3 billion in the financial year 2009/10 to KSh 31.3 billion in Quantity of mineral production increased from 1,399 thousand tonnes in 2009 to 1,497 thousand tonnes in 2010.
In the year under review, the labour market recorded 503 thousand new jobs. This was attributed to improved economic conditions; increased access to affordable credit from banks, the Women Enterprise Fund and the Youth Development Fund which aided in starting and expanding businesses thereby generating more jobs.
In total, 62.6 thousand new jobs were created in the modern sector, compared to 56.3 thousand in 2009, contributing 12.4 per cent of total jobs created. The bulk of the new jobs in the modern sector were created in Building and Construction, transport and communications, wholesale and retail trade, restaurants and hotels.
The informal sector which constituted 80.6 percent of total employment created an additional 440.9 thousand jobs. Government continued to implement governance reforms in line with Agenda 4 of the Kenya National Dialogue and Reconciliation process. The global economy is projected to continue on a recovery path but at a slower real GDP growth rate of 4.2 per cent in 2011 compared to 4.6 per cent in 2010.
Similarly the domestic economy is likely to maintain a positive growth but at a decelerated rate of between 3.5 and 4.5 per cent. But, high international prices, fluctuations in the exchange rate, inadequate rainfall, rising global food prices, political environment as the country moves close to 2012 elections are hurdles to be overcome.
1 comment:
Can one detail to me, the informal sector kind of employments? this certainly includes those categorized as un employed. Where are the 440,000 jobs created during 2011? I feel,that, realistic reports may help in planning and appreciating the real unemployment issues. It is by so doing that we shall begin to appreciate the need to encourage and motivate innovative ventures. "Roadside begging" may be categorized as an informal employment but adds very negatively to economic growth.
Bishop Eng. C.L. Olali engolali@yahoo.com
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