Performance of the Kenyan economy in 2017, sector by sector analysis

In a year marred by election uncertainties, drought, and slow credit uptake, the Kenyan economy grew by 4.9 percent in 2017, a drop of 1 percent compared to the previous year. Here is a breakdown of the performance of the Kenyan economy in 2017, sector by sector, from the Kenyan Economic Survey by the Kenya Bureau of statistics.


The manufacturing sector slowed down in 2017 with the gross value add (a measure of the value of goods and services produced) dropping to 0.2 percent from 2.7 percent in 2016. The sector was affected by the prolonged electioneering period, high production costs and competition from imported products. The biggest casualty in 2017 was the sugar subsector whose production dropped by 40 percent, with sugar millers such as Mumias and Miwani collapsing. However, credit to the sector rose to sh311.8 billion in 2017 from 275.8 in 2016.


The real value added growth in the sector decreased to 1.6 percent from 5.1percent in 2016, mainly due to low rainfall levels which affected crop and animal production. However, the total value of agricultural products taken to market rose to sh446.9 billion in 2017 from sh413.3 billion in 2016, led sh135.6 billion from livestock and livestock products.

Among the key crops of flowers, tea, coffee, maize, wheat, sugarcane and rice, only cut flowers grew in production by 26 percent while sugarcane was the biggest loser dropping almost a third in production.

Building and construction

The construction sector grew, but at a decreased rate of 8.6 percent, and this was evident in the decline in cement production from a four year high achieved in 2016 when cement consumption passed the 6,000 tonnes mark. The construction sector was also widely affected by the prolonged electioneering period causing projects to stall. On the other hand, loans to the sector increased to sh104.8 billion.


In 2017 Kenya imported 6.3 billion tonnes of petroleum costing sh265.3 billion- a third more than 2016’s figure. However, the cost of crude oil per barrel increased to $54.91 from $44.18 in 2016, significantly increasing the cost of petroleum products in the country.

For electricity, renewable sources of power accounted for approximately three quarters of power generated in 2017, this is an encouraging trend especially in the fight against global warming. Total electricity generation in 2017 stood at 10,360 GWh with geothermal accounting for close to a half of the power generated.


The Financial sector suffered in 2017, with the sectors growth rate decreasing by half the 6.1 recorded in 2016. The Central Bank Rate (CBR) was retained at 10 percent, which means interest rates on loans couldn’t go past 14 percent in line with the law capping interest rates. On the other hand both the stock exchange, the insurance and experienced growth in capital premiums, asset value respectively.


887,000 jobs were created in 2017 with a majority in the informal sector, which currently holds the title of the top employer. The top three sectors that created the most employment in 2017 were education (20 percent), followed by the agriculture forestry and fisheries sector, in addition to manufacturing. Sectors with dismal employment creation numbers were finance and insurance, professional, scientific-technical sectors and the electricity, steam and air industry.


The tourism sector experienced a resurgence in 2017 despite being an election year. Accommodation and food services grew by 14 percent while international arrivals hit 1.4 million-a jump of more than 100, 000 visitors from 2016. The country earned 120 billion from tourism in the year which represents an increase of a twentieth from 2016.


With the launch of the SGR, railway transport saw a rise of passenger traffic to 689,205, generating 590.2 million in earnings by the end of 2017. On the other hand, Freight traffic decreased by 16.9 percent from 1,380 thousand tonnes in 2016 to 1,147 thousand tonnes in 2017.

Freight transport has experienced a challenge with importers decrying the high cost of using the SGR, due to the extra cost of transporting containers from the Inland Container Depot (ICD) at Embakasi to their destinations.

In general, 2017 was a challenging year-especially due to the general election and rain shortage. The economy slowed down as investors adopted a wait and see attitude as articulated in a statement last year by the Kenya Private Sector Alliance (KEPSA). However, some sectors performed better than expected, while others remained resilient.


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