Alarm as three of Big Four drop in contribution to GDP despite economic rebound

Kenya recorded the worst economic growth in 2017 with a GDP growth of 4.9% as compared to 5.9% in 2016. However, entering 2018 ushered in new fortunes as the economy started to rebound. As a result, according to the 2019 Economic Survey report by the Kenya National Bureau of Statistics (KNBS), the economy expanded by 6.3% last year.

The increased growth, the survey reveals, is mainly a result of accelerated manufacturing activities and increased agricultural production. The manufacturing sector grew by 4.2% as compared to 2017 where it grew by 0.5%. The change was a result of increases in the manufacture of food and beverages as well as non-food products. Manufacturing activities have also seen an increase in credit from Sh315.5 billion in 2017 to Sh336 billion in 2018.

On the other hand, the agriculture sector also experienced an increase, as it grew by 6.4% last year as compared to a revised growth of 1.9% in 2017. This is attributable to sufficient rains in the period that saw the production and supply of food crops increase, causing the prices of major staple crops to drop.

Apart from the two, other sectors also recorded increases such as information and communications, transportation and financial which saw increases of 11.4%, 8.4%, and 5.6% respectively. Not all sectors experienced growth however, for instance, the construction sector dropped to 6.6% from 8.5% in 2017 due to decreased credit activity in the sector of 1.8% growth as compared to the growth of 6.4% in 2017.

Despite the sectors’ overall improvement, three of those included in the government’s big four agenda; manufacturing, affordable housing, and food security recorded a drop in their contribution to the GDP while universal health coverage remained stagnant.

According to the survey, the sectors of manufacturing, construction, agriculture, and human health and social work activities respectively contributed 7.7%, 34.2%, 5.4%, and 1.5% to the GDP in 2018 as compared to 2017 when their contribution stood at 8%, 34.8%, 5.6%, and 1.5% respectively.

The government’s choice of focussing on the four sectors as a way of increasing economic growth by contributing more to the GDP seems to have taken a turn for the worst. It needs to invest more in the sectors and ensure that they are free of graft. In doing so, Kenya will be able to compete with rising economies in the region such as Ethiopia, Rwanda, and Tanzania as well as reclaim the title of King of East Africa.

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