COVID: Kenya GDP contracted 0.3pc, first time in 29yrs

Kenya’s economy shrunk by a record 0.3% in 2020 due to the impact of Covid-19 scourge.

This is the worst economic performance in 29 years when the economy also contracted by 0.3%.

In 2020, the economy was supported by strong performance in agriculture, construction and ICT sectors.

The negative growth was as a result of reduced activities in key sectors such as the hospitality industry, education, and manufacturing.

“The contraction of economic performance was attributed to the disruption of labour supply, brought about by the restriction of movement, and social distancing measures meant to contain the spread of COVID-19. This also reduced demand for goods and services,” said Ukur Yatani, Cabinet Secretary for National Treasury and Planning

Agriculture remained the dominant sector, accounting for 23% of the total value of the economy in 2020, registering a 4.6% growth in 2020 compared to a 2.3% growth in 2019.

The manufacturing sector real gross value contracted by -0.9% in the year under review, with sugar and cement production supporting the growth.

CS Yatani says the restrictions on movements that were instituted by the government to curb the spread of Covid-19 affected the growth of many sector during the review period.

“The government is currently focusing on the implementation of the economic recovery strategy that will aim at restoring the economy to a strong growth path, creating jobs, and economic opportunities across all regions of the country with a view of tackling social and income inequalities,” added Yatani.

The volume of commercial cargo traffic handled decreased by 8.9% to 341.4 thousand tonnes in 2020.

The total number of passengers handled dropped by 62.5% from 12 million in 2019 to 4.5 million passengers in 2020 while earnings from passenger traffic dropped to one billion in 2020 compared to Sh1.9 billion in 2019.

Treasury says economic growth is expected to rebound in 2022 to grow by 6% due to the opening of many sectors.

“The key micro economic economic indicators will probably remain stable and supportive of growth in 2021. The economy is therefore expected to record a significant rebound in 2021. This is very important because we have seen and we are confident that we are going to register a growth of over 6%. What that means we will have portend more employment, more opportunities and more expansion of the various sectors of the economy to accommodate our various challenges,” said CS Yatani.

In the same period the size of the Kenyan economy expanded to 10.8 trillion shillings after the treasury reviewed the contribution of various sectors.


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