NAIROBI, Kenya, Jun 30 – The Kenya economy grew by 5.9 percent in the first quarter of 2016 with tourism being the most improved.
This is an increase compared to 5 percent growth of the same period in 2015.
A report by the Kenya National Bureau of Statistics indicates that the most notable improvement was a rebound in activities of accommodation and food services which expanded by 12.1 percent in the period under review compared to a contraction of 11.4 percent during the same quarter in 2015.
The sector has experienced a two year spell of poor performance largely occasioned by security concerns and economic downturn in some key tourist markets.
The number of tourist arrivals at major airports increased from 231,038 in the first quarter of 2015 to 261,404 in the quarter under review attributable to mitigation measures that were instituted to boost tourist arrivals.
Agriculture, forestry and dishing grew by 4.8 percent in the quarter under review compared to a 2.9 per cent growth realised in the same quarter of 2015 with tea production recovering from a contraction of 27.2 percent experienced in the first quarter of 2015 to record a 71.1 percent growth owing to favourable weather conditions that characterized the quarter in review.
“Value of exports of coffee and tea increased by 7.6 percent and 24.5 percent respectively over the same period. These developments were primarily on account of improved international prices during the review period,” the report states.
The horticulture sub-sector that entails growing of cut flowers, fruits and vegetables registered notable growths both in quantity and values.
Manufacturing and construction registered slowed growth at 3.6 percent and 9.9 percent respectively compared to 2015’s 4.1 percent and 12.6 percent.
The electricity sector expanded by 8.5 percent with total generation of electricity at 2,241.18 Kwh in the quarter under review.
Generation from hydro and geothermal increased by 26.5 and 4.4 percent, respectively, while thermal declined by 17.5 percent during the review period due to favourable weather conditions experienced during the quarter that necessitated the scaling down of the more expensive thermal generation in favour of hydro and thermal generation.
Transport and ICT registered improvement from the previous year expanding by 8.4 percent and 9.7 percent respectively.
The financial sector grew by 8 percent a slowed growth compared to 10 percent the same period the previous year.
The Nairobi Securities Exchange (NSE) activity declined significantly in the first quarter of 2016 compared the first quarter of 2015 with the number of transactions going down from 44,715 in March 2015 to 30,789 in March 2016, while the number of shares traded dropped from 614 million to 536 million.
Over the same period, the value of shares traded dropped significantly from Sh20.5 billion to Sh13.4 billion.
The NSE 20 share index declined from 5,346 points in March 2015 to 3,982 points in March 2016.
The current account balance improved by 30.1 percent from a deficit of Sh101 billion in the first quarter of 2015 to a deficit of Sh71 billion in the quarter under review.
“The narrowing of the current account deficit could be explained by the decline in import expenditure and a considerable increase in the value of exports. Cross border services receipts declined by 7.1 percent while payments increased by 9 percent translating into a surplus of Sh14,265 million in international trade in services during the first quarter of 2016,” the report reads.
Remittances from the Diaspora continued to grow in the first quarter of 2016, increasing by 28.4 percent to Sh42 billion from Sh33 billion in the first quarter of 2015.