A photo of drought [PHOTO/nation.co.ke]
Poor weather and a reduced lending by commercials banks put the first quarter economic growth at its bottom-most pace in the last five years as inflation dropped for the first time this year.
In the first quarter of the year, Kenya's economy expanded 4.7 per cent, down from 5.9 per cent in a similar period of 2016, said the statistics office on Friday.
According to Kenya National Bureau of Statistics (KNBS), the growth was hit by the recent drought that left over 2.7 million people in need of food aid, driving inflation to a five-year high on more costly food.
However, food prices eased this month in a turn that slowed down inflation to 9.21 per cent in June, having come from 11.70 per cent a month earlier — the first ever drop since December 2016.
The bad weather saw the first shrinkage of the agriculture sector since 2009, a major blow to a sector employing most Kenyans and which accounts for a quarter of the GDP.
Also, commercial banks’ lending to the private sector in the three months before March grew at the slowest pace in over a decade, further slowing down growth.
Slower lending also left key economic and job growth drivers like agriculture and manufacturing struggling for funding.