- Kenya’s economic growth slowed in the first quarter of this year compared with the same period last year due to dry weather which curbed the farming sector, the statistics office said on Friday.

The Kenya National Bureau of Statistics said the economy grew 5.6% year-on-year from 6.5% in the same quarter last year.

It said the agriculture, forestry and fishing sector, which contributes about a third of output, grew 5.3% compared with 7.5% in the first quarter of 2018.

“The quarter was characterised by slowdown in agricultural activities following delay in the onset of long rains,” KNBS said in a statement.

“The slowdown in agricultural growth somewhat affected agro-processing and consequently led to slowed manufacturing activities during the review period.”

Manufacturing grew by 3.2% from 3.8% expansion in first quarter 2018, the statistics office said.

Growth in the transportation and storage sector slowed to 6.7% from 8.5% in first quarter 2018, while construction expanded 5.6% from 6.6%.

It said accommodation and food service activities expanded 10.1% from 13.1% in first quarter 2018. The sector includes the tourism industry, which is among Kenya’s top foreign exchange earners.

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Kenya’s shilling fell to the weakest level against the dollar in almost four years amid a decline in earnings from key exports including flowers and tea.

The currency of East Africa’s largest economy dropped 0.2% to 104.07 shillings per dollar by 12:40 p.m. in the capital, Nairobi, on track for the lowest level since October 2015. It’s set for a fifth straight monthly decline.

While remittances, Kenya’s biggest source of foreign exchange, rose in the six months through June, agricultural and cut-flower exports declined and tourism numbers dropped. That’s putting pressure on the shilling at a time when a strengthening dollar is undermining most emerging-market currencies.

“Exports have been muted while imports have been expanding and resulted in widening the trade gap,” said Churchill Ogutu, a senior research analyst at Nairobi-based Genghis Capital. “If three of the top four forex earners are having a downturn it will exacerbate the deficit.”

Kenya’s tea production in the first five months of this year fell to 170.18 million kilograms compared with 187.69 million kilograms during the same period in 2018. The average auction price was $2.25 per kilogram compared with $2.80 per kilogram a year ago. Kenya is the world’s biggest exporter of black tea. The Kenya Flower Council sees 2019 cut-flower earnings growth slowing to 20% from 38% on global oversupply. Kenya is the largest exporter of cut flowers to Europe.

The number of visitors to Kenya declined to 921,090 in the first six months of this year compared with 927, 977 during the same period a year ago. Cumulative remittances in six months through June increased to $1.45 billion from $1.38 billion during the same period last year.

All time low from 2011 is 106.90. That was a remarkable move from 85 in less than one year.

The immediate downtrend following the demonetisation announcement is noticeable.

Not good!

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