Kenyaâ€™s economy absorbed 800,000 people into the job market last year despite a slowdown to 5.3 per cent from 5.7 per cent in 2013 due to decline in tourism and agricultural production.
Agriculture output dipped to 3.5 per cent compared with 5.2 per cent in 2013 due to erratic rains as some regions experienced depressed rainfall, while tourism earnings declined by 7.3 per cent from Sh94 billion to Sh87 billion in the wake of security concerns, negative travel advisories and fear of spread of Ebola.
According to Economic Survey 2015 launched yesterday, last yearâ€™s top performing sectors included building and construction which grew by 13.1 per cent, transport (13.7 per cent) and ICT (13.4 per cent ).
â€œThe construction sectorâ€™s contribution to the gross domestic product (GDP) increased to 11.1 per cent in 2014 from 4.6 per cent in 2013,â€ Devolution and Planning Cabinet secretary Anne Waiguru adding that cement consumption which is a key component in infrastructure development registered a 21.8 per cent growth as the sector consumed 5.1 tonnes in 2014.
The growth was also informed by increased government and private sector spending and low oil prices. Also supporting growth was the Information, communication and technology (ICT) sector which expanded by 13.4 per cent in 2014 from 12.3 per cent growth recorded in 2013 as the mobile money subscriptions reached 26 million last year, representing a penetration rate of 60.6 per cent to the total population.
Cash deposits through mobile money agents hit Sh1.3 trillion mark in 2014 up from Sh1.03 trillion in 2013, while the total transfers increased by 24.7 per cent to Sh2.37 trillion up from Sh1.902 trillion in 2013.
â€œInternet penetration stood at 38.3 per cent in the year under review as total domestic Short Messaging Services increased by 38.5 per cent to 27.5 billion in 2014,â€ read the report in part.
The survey estimated total electricity generation expanded by 8.2 per cent to 9,138.7 GWh last year as domestic demand for electricity grew by 3.8 per cent to 7,768.6 GWh in 2014 from 6,928.1 GWh in 2013.
In total, the number of customers connected under the rural electrification programme expanded by 16.5 per cent to 528,552 as at July 2014 which is informed by Governmentâ€™s ambitious investment in the energy sector.
The survey, which provides details on the state of the countryâ€™s economy and highlights the economic performance and key social and governance statistics over a period of five years with emphasis on the last two years, noted production of coffee increased by 24 per cent last year while the production of tea and fresh produce increased by three per cent each, compared to 2013.
However, the maize production decreased by 4.2 per cent as wheat and rice production increased by 18 and 6 per cent respectively in 2014. There were increased activities in international trade as imports rose by 14.5 per cent in 2014 to Sh1.62 trillion while total exports grew by 6.9 per cent to Sh537.2 billion during the same period.
The trade balance however worsened by 18.7 per cent from a deficit of Sh911.0 billion in 2013 to a deficit of Sh1.08 trillion in 2014.
The survey indicates Central Bank of Kenya (CBK) adopted monetary policy measures that helped ease inflationary pressure in the country by retaining the Central Bank Rate at 8.50 per cent throughout the period in an effort to anchor inflationary expectations.
However, compared to 2013, there was a modest increase in the cost of living from 5.7 per cent to 6.9 per cent in 2014 attributed to increases in the cost of several food and non-food items which outweighed notable falls in the cost of electricity and petroleum products including petrol, diesel and kerosene earlier this year.
This is the first survey launched after countryâ€™s GDP rose by 25 per cent to Sh4.76 trillion following the governmentâ€™s rebasing whereby a new formula started being used to calculate Gross Domestic Product (GDP).
Rebasing lifted the average per capita income in Kenya which effectively moved the country to lower middle income status. Following rebasing of the Gross Domestic Product (GDP), Kenyaâ€™s growth rate for 2013 was revised higher, to 5.7 per cent growth in 2013 from an estimated 4.7 per cent.
Waiguru proposed a raft of measures to check the dip in growth. She called for enhanced uptake of commercial agriculture, reduction of the cost of farm inputs and mechanization in farming practices as among key areas to turn around the agriculture sector.
Construction of a fertilizer factory must be fast tracked and change economy from being rain dependent by expanding land under irrigation Kenya must also find a long lasting solution to address insecurity while aggressively marketing the country as preferred destination for tourists. The tourism sector needs to diversify and target emerging economies such as China, India, Middle East and Brazil, amongst others.