By KBC Reporter
Rising political temperatures ahead of the August polls and the drought experienced in parts of the country are likely to slow economic growth this year.
This is according to Britam Asset Managers who project the economy to grow between 5 and 5.6 percent this year driven by increased government spending and resilient performance in transport, trade and tourism.
Most parts of the country have been experiencing dry spells after below-par short rains.
This has hurt agricultural output, increased electricity costs and led to water supply challenges in most parts of the country.
The analysts say economic activity is likely to slow as the election mood kicks in ahead of the August polls.
They say historically, Kenya’s election years have been associated with low GDP growth, as the polls delay private sector investments due to political uncertainty.
With interest rates capped at four percent above the benchmark lending rate squeezing private sector lending, the analysts are calling on the government to direct most of its foreign debt towards development expenditure to stimulate growth.
Kenyan exports to the UK made up 7 percent of the country’s total exports over the last two years, however, nationalist sentiments in the UK after Brexit, and attendant currency weakness risks has made Kenyan exports to the UK uncompetitive.