NAIROBI (Xinhua) --
The Kenyan economy is projected to grow at 5.9
percent in 2017, the same rate of growth achieved in 2016 but
might fall slightly further down due to a slowdown in economic
activity within the private sector because of the prevailing
drought, a Treasury official said Thursday.
for National Treasury, Henry Rotich, said the economy was likely
to suffer a growth slowdown in 2017 unless the drastic drop in
the level of private sector borrowing was reversed.
“Our economy is
growing at twice the pace of global growth and more than twice
the rate of the Sub-Saharan growth. We are growing faster than
both Nigeria and South Africa whose growth is projected at 0.8
percent for both countries,” Rotich said when he presented the
2017/2018 budget in Parliament.
He attributed the
5.9 growth projection to the stable environment surrounding the
key economic indicators such as the rate of inflation and
The CS also cited a
stable import bill, investment in infrastructure and the
recovery in the tourism sector after years of a slowdown caused
by a series of terror attacks in the country’s tourism hotspots.
“Our vibrant and
dynamic private sector has contributed to this resilience,”
Rotich told Parliament when he presented the fifth budget
statement under Jubilee government.
attributed the economic growth it achieved in the middle of a
worldwide economic slump to the growing rate of foreign direct
investments which hit 2.6 billion U.S. dollars in 2016.
According to Rotich,
investments in the security sector, through the employment of
more police officers and other security personnel, enabled the
country to enhance security.
In the new fiscal
budget, the Kenyan authorities outlined measures to improve the
investment environment, create more jobs in 2017 and to attract
more investors into the country.
1.35 billion dollars in infrastructure projects in the 2017/2018
financial year. He said 640 million dollars will go towards the
ongoing road construction while 443 million dollars will be
directed to foreign co-financed roads.
The CS said 756
million dollars has been committed to the Standard Gauge Railway
from which 155 million dollars will go to the completion of the
first phase and 597 million dollars towards the construction of
second phase from Nairobi to Naivasha.
“Once completed, SGR
will help to integrate domestic markets, link special industrial
zones and bring global export markets closer home. The
construction of the first phase is nearing completion and we
expect Kenyans to enjoy a decent ride from Mombasa to Nairobi
starting June 1,” Rotich said.
“At the same time,
we are glad to announce that the construction of the second
phase has already begun,” he told the lawmakers. Rotich told
parliament that 4 million dollars will be used to relocate the
people along the railway line.
He announced plans
to build a national pipeline from Lodwar in Northern Kenya to
Lamu in the South, to enhance the country’s oil energy
Kenya is preparing
to begin advance oil exportation this year through the rail.
The government also
addressed the increasing cost of maize flour by introducing tax
interventions meant to reduce the cost of maize flour.
introducing duty-free importation of maize in the next four
months and the removal of Value Added Tax on both bread and
maize flour in a move meant to lower the costs of the basic food
Rotich said the two
commodities were expected to be cheaper after the exemptions and
warned millers and bread manufacturers of a reversal should they
fail to pass the benefits to the consumers.
“In order to make
these commodities affordable to the common citizens. I propose
to zero rate bread and maize flour to remove VAT all together,”
He asked companies
involved in the chain of production and distribution of such
commodities to implement the measure directed at reducing the
cost of basic commodities.
wholesalers and retailers who sell such goods will be expected
to reduce the price of these basic commodities failure to which
I will reverse the policy,” he warned.
how the government has made progress in improving security,
infrastructure, education, health care and access to
The budget is also
full of incentives to attract foreign investments and protect
locally manufactured goods.