East Africa Economic Report

Galana Kulalu: More large-scale  Irrigation schemes needed Expert reports show that Agriculture in Kenya generates 24 percent of the GDP directly, that is $18 billion at the current GDP estimated at US$75 billion. It also contributes another 27 percent indirectly to the GDP that is $20.25 billion.  In effect, the sector contributes, both directly and indirectly half of the national wealth that is, $39 billion.  The sector produces 62 percent of our exports, employs 40 percent of the entire labour force and 70 percent of the rural folk. It also generates an estimated 45 percent of Government revenue. The sector also produces over 75% of industrial raw materials and more than 50% of the export earnings. Yet, says USAID in a report, the full potential of the land suitable for agriculture is not realized. USAID, estimates that only about 20 percent of the total land mass in Kenya is arable and that 80percent of it is not fully exploited. The bane of the agr...

Uhuru and Raila During the Handshake If Anhui Construction Company of China bids and wins the contract for the construction of the proposed second runway at JKIA, then, Economics will be the real reason for the Uhuru-Raila amity.  The company was the winner of the bid to construct the now moribund US$656 million Greenfield terminal at JKIA. And that project was one of the two mega projects that Jimmi Wanjigi had brokered, the other being the Standard Gauge Railway.  Both projects slipped through his fingers during the Uhuru Kenyatta administration, a loss that so angered him that he swore to bring down the Uhuru administration. He thus threw his weight -and finances- behind Raila Odinga’s ODM, becoming the financier.  However, that was a bad gamble for all his efforts to bring down the Jubilee administration came to naught. And even as he funded “operation bring Jubilee down,” the administration was slowly tightening the noose around his neck. For five years, ...

Kenya's PMI March'17-March'18 Courtesy CFC Stanbic The Kenyan economy will post a 5.8 percent growth rate by the end of March and continue the same robust trend to the end of the year, experts say.   This comes after a lean eight months of 2017. The period between  March and November last year, Kenya experienced a lean period we can report. Drought, coupled with political rumbling in the run-up to the August 8 th general election slowed economic activity in the country. According to CFC Stanbic, the PMI index declined constantly since March 2017 when it read 48 until October when presidential elections were held. In October, it read 34.4, the lowest level in a long time. The decline in PMI mirrors the decline in economic activity in the private sector. No wonder many companies are issuing a profit warning. The decline in profitability has also hit tax- collection putting the government in the red.  However, Kenya’s economic recovery has picked up t...

T hika superhighway, almost sabotaged by the West Dear Sir,  My Late father once told me; "He who cannot be advised by a child does not have him." This was after I overheard him telling his wife-my mother - how he spend the whole day running from one office to the next in a bid to transfer his businesses to his wives’ names. Why was he doing all that? She asked. Because a transport company he was a shareholder had been found liable by a court of law and ordered to pay damages! The company had long collapsed. So my father, fearing that the claimants would attach the property of the shareholders rushed to transfer his businesses to his wives’ names so that once the auctioneers come calling, they will find nothing to his name. Now the transport company was a limited liability and from my rudimentary understanding of commercial law taught in my secondary school business class, I knew my father was not liable. I told him as much. He did not believe me neither did he ig...