Kenya Has Worst Economic Performance Since 1963

By Tervil Okoko, Panafrican News Agency (Dakar), 15 February 2001

Nairobi, Kenya - For the first time since independence in 1963, Kenya recorded a contracted economy, with a negative three percent growth during the 12 months to 30 November last year.

The unprecedented economic performance confirms the country's downward slide owing to gross mismanagement and factors beyond the government's control, such as drought.

According to the Central Bank's monthly review for February, estimates of key economic activities, including agriculture, indicate that the gross domestic product (GDP) declined by 0.3 percent during the 12 months, compared to 1.4 percent during the same period in 1999.

The bank attributes this poor performance in all the aspects of the economy to mainly drought, which brought about long and severe power and water rationing, and insecurity, which adversely affected foreign investment and tourism.

The major culprit, however, is high-level corruption and inept management.

This sordid state of affairs means that the current misery, including poverty, high rate of unemployment and poor provision of social services, including education and health care, will go on for most of the year.

Agricultural production in general declined by 0.3 percent, compared to 1.2 percent in 1999. For instance, the production of tea, the chief foreign exchange earner, slumped by 5.8 percent to 233,775 tonnes, down from 248,248 tonnes.

But the good news is that, owing to improved world prices, the earnings from the exports of the crop increased from 446 million US dollars to 473 million dollars.

The output of horticulture and other export crops also declined considerably, according to the review.

The manufacturing sector, whose GDP share is 13.2 percent, declined by 1.2 percent, compared to the one-percent fall the previous year.

The poor performance is ascribed to the reduced competitiveness in domestic production arising from the high cost of raw materials and other inputs, such as energy and transportation.

Finance, insurance, real estate and business services, which account for 10.5 percent of GDP, grew by 1.5 percent, compared to two percent in 1999.

According to the central bank, various measures have been taken to reverse the trend. These include the on-going repair of the road network, the restructuring of the central tender board, and the telecommunications sub-sector and the reforms in the agriculture sector.