Kenya posts slowest Q3 economic growth since Covid pandemic
Kenya's economy grew by four percent in the three months to September last year, the slowest growth in four years as contractions in the key construction and mining economic sectors affected performance.
The gross domestic growth (GDP), or the country’s total output, grew at a slower pace compared to 6 percent in the third quarter of 2023, according to a computation by the Kenya National Bureau of Statistics (KNBS).
It was the slowest quarter-three growth since 2020 when the government restricted the movement of people and social gatherings to curb the spread Covid-19 pandemic muffled economic activities as many people were rendered jobless. This is a continuation of the trend in the first two quarters where GDP growth has softened compared to the corresponding periods in 2023, and points to a slower full-year growth as projected by many economic forecasters.
“The decelerated growth was largely due to a general decline in growth in most sectors of the economy,” said the KNBS in its Quarterly Gross Domestic Product Report.
“The growth was constrained by contractions in Construction and Mining and Quarrying activities. Construction activities contracted by 2.0 percent while Mining and Quarrying posted a contraction of 11.1 percent in the quarter under review,” added the national statistician.
Fewer roads being built
Consumption of cement dropped by 10 percent to 2.2 million tonnes in the review period, contributing to the poor performance of the construction sector even as President Ruto’s government continued its austerity measures that have seen it scale down on mega infrastructure projects.
Because fewer roads are being built, less bitumen (a drop of 40.9 percent to 18,353 tonnes) was imported.
Production of galvanised sheets dropped while credit advanced to enterprises in the sector also fell in the review period.
Although agriculture, which contributes over a fifth of the national cake, registered a slower growth of 4.2 percent compared to the 5.1 percent growth in 2023.
“This growth (in agriculture) was largely on account of favourable weather conditions that prevailed throughout the first three quarters of 2024, albeit less in intensity compared to 2023,” said the national statistician on Tuesday.
The growth in agriculture was dragged down by a 12.2 percent decline in tea production from 138,771.6 tonnes in 2023 to 121,868.3 tonnes in a similar quarter last year, though cane deliveries and milk intake by processors improved.
Other sectors that registered slower growth include manufacturing, accommodation services, electricity and water supply, ICT, professional and administration, financial and insurance services, and real estate.
However, wholesale trade, education, and transport grew faster in the review period than in the corresponding period in 2023.
Despite improved macroeconomic indicators, such as a stable exchange rate and lower consumer prices, most forecasters expect the economy to grow at a slower rate in 2024 than in 2023.
The World Bank projects Kenya’s real GDP in 2024 to grow by 4.7 percent, compared to 5.6 percent last when agriculture recovered from a drought that had crippled the sector that employs the most Kenyans.
