Growth Sectors of Kenya’s Economy

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The highest growth sector of Kenya’s economy is tourism. Last year, it grew at the rate of 42.8 per cent according to statistics released by the government.

Although the government has put in a lot of money to promote the sector, not much was expected after the near collapse of the industry following the 2007 post- election chaos. But it brought in Shs62 billion to the economy as against Shs52 billion the previous year.

A total of 1.5 million visitors came to Kenya. The year before 1.2 million tourists visited Kenya.

Transport and Communications

Transport and communications was expected to record high growth – and it did. It grew at 6.4 per cent. And mobile telephone subscribers increased by 34.2 per cent from 12.9 million in 2008 to 17.4 million. Safaricom, the market leader, has more than 15 million subscribers.

Another growth sector was construction. Over the year, we in Investment News, Kenya, have been praising the industry as one of the high growth sectors. And now a growth rate of 14.1 per cent confirms this. Whether it’s putting up houses or constructing roads, the signs are everywhere in urban areas and in the countryside.

Biggest beneficiaries are the cement factories and the largest investor is the government.

Manufacturing

Manufacturing went up by 2 per cent – a rate that wasn’t satisfactory. But manufacturers have been complaining about the high costs of doing business in Kenya. Licenses are many and expensive. But the most criticized has been electricity whose cost is one of the highest anywhere in the world.

Sectors with Poor Performance

Not surprisingly, key sectors such as agriculture went down. First it was the political chaos that saw many farmers in high-production areas such as the Rift Valley fleeing their farms. Then it followed the severest draught ever. Animals – and humans- died of hunger and thirst while plants withered.

Perpetual problems affecting the industry however, are related the high cost of inputs especially fertilizer. The sector went down by 2.6 per cent.

Energy-Excellent Investment Opportunities

Energy went down by 3.1. For investors, this is one area which offers great opportunities. High costs have made many Kenyans reduce their consumption of energy. The search for cheaper, more reliable energy source has intensified.

Only recently, the Prime Minister, Raila Odinga announced that the government had received more that Shs 70 billion ($1billion) to fund green energy projects.

The highest fall in production occurred in the mining industry where production went down by 4.2 per cent.

Outlook

According to government, if similar conditions persist, grow of the economy will improve to over 4 per cent this year as against 2.6 per cent overall last year.

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Tags: growth of cement manufacturing in Kenya, growth of tourism in Kenya, Growth sectors of Kenya’s economy, mobile telephone subscribers in Kenya, poor performing sectors in Kenya’s economy