ECONOMY

Growth in various sectors a pointer to economic recovery - CBK

The agriculture sector and cement production have recorded steady growth in 2020 despite Covid-19

In Summary
  • During the post-MPC meeting on Thursday, CBK governor Patrick Njoroge said the growth in these sectors is a point of recovery for the economy despite Covid-19.
  • Tea which is one of the country’s major exports has been strong in production and exports during this times.
CBK Governor Patrick Njoroge.
CBK Governor Patrick Njoroge.
Image: FILE

Various sectors have anchored the economy, maintaining steady growth despite the Covid -19 pandemic.

During the post-MPC meeting on Thursday, CBK governor Patrick Njoroge said the growth in these sectors is a pointer to economic recovery. 

He said the agriculture sector recorded steady growth due to favourable weather conditions in the country.

 
 

“Even after the reopening of the country things still remain uneven for the economy, however the agricultural sector has recorded steady growth even in the tough conditions,” said Njoroge.

Tea which is one of the country’s major exports has been strong in production and exports during this times.

The country produced 489,000 metric tonnes of tea compared to 459,000 metric tonnes produced over the same period last year.

Cane deliveries in the country has also grown by 59 per cent in May this year compared to May 2019 due to increased acreage and favourable exports.

Fresh vegetables production in the country also improved by 78 per cent despite disruptions such as international supply and constraints in availability of aircraft cargo space.

The floriculture sector has recorded great improvement after easing of restrictions after a major dip in April due to the lockdowns in major flower markets.

The orders for flowers from the international  market are almost back to normal level at 95 per cent.

 

In May this year the country sold flowers worth Sh35 million an improvement from Sh32million in May 2019.

Maize production has grown by 7.7 per cent from 39.8 million bags by June last year to 42.9 million bags in June this year.

“Beans production grew by 26 per cent while production of potatoes grew by 42.2 per cent on account of the improved weather conditions also,” Njoroge said.

Cement production has also recorded growth from 2019, in January it grew by 9.3 per cent and in May it was 4.9 per cent higher than the same period last year.

Diaspora remittances also sent in the month of June increased to $288.5million from $258million in May and this say the apex bank revise the expected 12.3 per cent decline in remittances to a 1 per cent increase aligned to year on year.

The hotel sector which was one of the hardest hit by Covid-19 is also optimistic as international travel is expected to resume August 1.

According to CBK, 60 per cent of hotels are expected to reopen after international travel resumes as they record forward bookings

This marks a recovery path. In August hotels  recorded 7 per cent bookings while in September they have 17 per cent forward bookings.

In the MPC Private Sector Market Perception Survey conducted in July, respondents also  indicated improvement in their optimism and expectation of increased economic activity in the next two months particularly with the recent easing of movement restrictions.

Other factors that contributed to this optimism, according to CBK, include the impact of the fiscal and monetary policy measures to cushion the economy from the effects of the pandemic, favourable weather conditions, continued payment of pending bills by the Government, and strong diaspora remittances.

Njoroge noted that  while the Kenya shilling has depreciated at around 6.3 per cent, this is appropriate under the current circumstances.