A donkey cart transports bags of cement in Mandera on July 21, 2022. The uptake of cement has dropped by the sharpest margin in more than two decades.
The uptake of cement has dropped by the sharpest margin in more than two decades, official statistics show, hurt by budgetary cuts on public infrastructure projects and prohibitive borrowing costs for property developers.
Data collated by the Kenya National Bureau of Statistics (KNBS) shows cement sales fell 7.94 per cent in 2024 to 8.47 million tonnes--- the sharpest year-on-year drop in recent history.
The rare fall in cement use for two consecutive years came in a year when construction contracted at levels last seen more than two decades ago during the reign of late president Moi.
The sector, for example, continued negative growth in the third quarter of 2024, shrinking by 2.9 per cent which followed a two per cent slide in the preceding quarter between April and June.
Analysis of the KNBS data showed that such a performance in the sector, which has been one of the key drivers of job opportunities in the last decade, was last recorded in the second and third quarters of 2002.
“The contraction was reflected by trends in key industry indicators. For instance, cement consumption declined by 10.0 per cent to stand at 2,196.7 thousand tonnes in the third quarter of 2024, from 2,439.7 thousand tonnes consumed in a similar quarter of 2023,” KNBS wrote in its latest report.
Data collated by the Kenya National Bureau of Statistics (KNBS) shows cement sales fell 7.94 per cent in 2024 to 8.47 million tonnes.
Cement is a key input in projects such as roads, bridges, and buildings. Falling demand for cement has largely been impacted by reduced number of active projects in the building and construction sector after President William Ruto’s administration initially shifted from a decade-long heavy infrastructure investment strategy adopted by his predecessor, Uhuru Kenyatta.
Lenders — including microfinance institutions and saccos — also cut credit flow to the building and construction sector by 13.87 per cent in the year ended December 2024 to Sh126.7 billion, according to the Central Bank of Kenya’s data.
The cement industry is, however, expected to get a lift after the Ruto administration indicated that most of the stalled projects will start getting funding after more than two years of minimal activity since coming to power.
“We have received the Sh63 billion and we have signed a return to work formula with them. In the next few days, the contractors will be back on site,” Roads and Transport Cabinet Secretary Davis Chirchir said last Friday.
Contractors laid down tools over the government's failure to pay them billions of shillings for both ongoing and completed works. Some of them are owed upwards of Sh10 billion, highlighting the cash crunch that has seen some face the auctioneers' hammer over their inability to pay debts.
Bags of cement.
Upon taking power, Dr Ruto expressed shock at Sh900 billion in commitments for roads sector in the budget he inherited from Mr Kenyatta’s regime (for the financial year ending June 2023).
“We have tried to cut it down; we have tried to cut some of the roads that have not started. But we remain with about Sh680 billion that we have to manage,” the Kenyan leader said on May 14, 2023.
But the impact of reduced funding for roads, which had dipped to the lowest levels in more than a decade during the first of the last fiscal year, was felt by motorists who decried poor conditions of major roads over the past year, prompting the government’s action.
cmunda@ke.nationmedia.com
