Economic growth drops by nearly half

Kenyan economic growth has gone down by nearly a half this financial year from earlier projections. Acting finance minister John Michuki has also blamed the current inflation to congestion at the Mombasa port.

He said that the economy will grow at between 4 and 5 per cent against the expected 8 per cent. This is in comparison to last year’s 7 per cent growth.

Mr Michuki attributed the drop to the post-election violence that rocked the country early in the year following disputed presidential election results.

“This will affect individual ministerial budgetary allocations and we may not achieve some of the targets we had set including implementation of some projects.

“We are, however, optimistic that we will achieve a 9 per cent economic growth next year,” the minister said in his Kangema constituency at the weekend.

Mr Michuki called on tea and dairy farmers to double their efforts, saying the government has found export markets. He, however, said that for them to realise improved income from the new markets, they would have to meet the demand.

He said the Ministry of Finance was seeking ways on how to subsidise farm inputs to make them affordable to most farmers.

“We have ready markets for milk in many countries but we cannot meet the demand. This means that we are denying ourselves an opportunity to improve on our economy at personal and country levels,” said the minister.

He said congestion at the Mombasa port was also affecting the economic growth, blaming it for causing rising inflation that affects purchasing of farm inputs.

Mr Michuki attributed the congestion to corruption and inefficiency by port officers and said that he would soon intervene if the situation is not reversed in a few days.

Some of the cargo has been at the port for nearly one year, the minister said, and that importers imposed the extra costs charged by corrupt and inefficient port workers on to Kenyans.