May 23, 2008

Kenya’s economic growth rate is expected to be between 3.5 percent and 4.5 percent this year. However, harmony within the Coalition Government will be key in realizing this growth rate. Other key interventions are fast tracking the rehabilitation and construction of infrastructure, easy accessibility of credit for investment and aggressive tourism marketing.

The Government is expected to spend Kshs 175.2 billion in the 2007/2008 fiscal year on social services compared to Kshs 149.5 billion spent in 2006/2007, an increase of 17.2 per cent, according to the 2008 Economic Survey released on May 22, at Kenyatta International Conference Center (KICC), Nairobi by Hon Wycliffe Oparanya, Minister of State for Planning, National Development and Vision 2030.

The Local Government expenditure estimates increased over the years from Kshs 2.6 billion in 2003/2004 compared to Kshs 4.2 billion in 2007/2008 according to the report. The number of primary schools increased in 2007 from 25, 929 to 26,104 while that of secondary schools increased from 5,659 to 6,485 over the same period. The Economic Survey report further says the number of primary school pupils increased from 7, 632.1 in 2006 to 8,229.3 in 2007.

In the health sector, the introduction of Constituency Development Fund (CDF) led to increase of new health facilities. The number of health institutions increased from 5,471 in 2006 to 6,194 in 2007, while the number of registered medical personnel increased from 67, 175 in 2006 to 69,805 in 2007 registering a 3.9 percentage increment.

The Government’s commitment to fight corruption seemed to bear fruits. The number of corruption cases reported to Kenya Anti Corruption Commission (KACC) increased by 3.8 percent from 7,888 in 2006 to 8,188 in 2007. Crime rate declined by 12.7 percent, a total of 63,028 crimes were reported to the police in 2007 compared to 72,225 reported in the previous year.

The agriculture sector recorded a growth rate of 2.3 per cent in 2007 compared to a revised rate of 4.4 per cent in 2007. The Economic Survey report attributes the decline to delayed long rains and low volume of short rains last year. There was a decline in maize production by 6.1 percent. The country recorded a total of 32.5 million bags in 2007 from 34.6 million bags produced in 2006.

To finance its programmes for the 2007/2008 financial year, the Government is expected to raise Kshs 472.1 billion of which Kshs 389.2 billion is to be sourced from ordinary revenue while 82.9 from donor funding.

Despite public perception that unemployment rate is high, the study shows that a total of 474,000 jobs were created in 2007. The private sector employment increased by six percent from 1,209 in 2006 to 1,821 in 2007 whereas there was a decline in wage employment in the public sector by 3.8 percent from a revised figure of 650,000jobs in 2006 to 625,000 jobs in 2007.

The average annual inflation rate dropped from 14.5 percent in 2006 to 9.8 percent in 2007. The manufacturing sector grew at 6.2 percent in 2007 compared to a growth of 6.3 percent in 2006.

The report names the sectors expected to spur the country’s economic growth as: manufacturing, transport and communication, financial sector, building and construction and wholesale and retail trade.