Kenya’s economy contracted by 0.3% in 2020
Kenya’s economy contracted for the first time in nearly three decades as the coronavirus pandemic hit the key sectors, including tourism, education, transport and manufacturing.
According to the National Treasury Ukur Yatani, output or Gross Domestic Product (GDP) declined by 0.3 percent in 2020.
Production fell despite an overhaul of Kenya’s national accounts data that show Gross Domestic Product (GDP) was Ksh.10.753 trillion (US$97.8 billion) last year.
In 2019, the Kenya National Bureau of Statistics (KNBS) estimates GDP of Ksh.10.256 trillion with the new reference year of 2016 from 2009, compared with Ksh.9.74 trillion with the previous data series.
The economy, which grew 5 percent in 2019, exited a recession in the last quarter of 2020 after posting marginal growth of 1 percent in the three months through December.
Manufacturing sector’s real gross value shrunk by -0.1 percent in 2020 compared to a 2.5 percent growth in the previous year.
The sector was supported by cement and sugar production.
Construction sector performed well during the lockdown, much of which saw Bamburi Cement’s pretax profit grow by 416.4 percent to record Ksh.1.1 billion for the year ended June 2021.
- Kenya requires Ksh.6.8 trillion to realise green economy in 10 years
- Kenya’s economy projected to grow by 7.6% in 2021
- US inflation continues, weighing on world economy
Profit growth for the company was seen at Ksh.213 million that was recorded same period last year.
Credit advance for the manufacturing sector rose by 11.8 percent to Ksh.410.3 billion in 2020, yet, the employment rate in the sector contracted by 10.3 percent to 316.9 thousand people in 2020.
During the period under review, the volume of commercial cargo traffic handled decreased by 8.9 percent when COVID-19 containment measures significantly affected the performance of transport and storage sector affected.
Growth in agriculture accelerated to 4.8 percent in 2020 due to increased production in tea and food crops.
Further, in light of the pandemic, expenditure on health increased; as did NHIF membership as well hospital costs.
During the release of the KNBS economic survey, Yatani noted that the future is not clear because of the uncertainties resulting from the pandemic.
Kenya’s economy last shrank in 1992, when it contracted by 0.3 percent.