Nairobi — The drought currently ravaging Kenya has dried up any hope of an improved economic outlook, with the government intending to revise its earlier projection of a 3.5 per cent growth downwards.

Improved growth in the first three months of the year had raised expectations that this year's rate of wealth creation would exceed the 1.8 per cent recorded last year.

However, speaking during a grant signing ceremony with a representative of government from Japan, Finance minister Uhuru Kenyatta, said the projection might not hold after all.

Signs of growth

"Although some sectors like construction and manufacturing have shown positive signs of growth, agriculture is still low, due to drought," Mr Uhuru said.

The situation has become critical as most parts of the country are said to have received 10 per cent to 50 per cent of normal rainfall. And in some parts, the rain stopped falling three to four weeks earlier than normal.

The dry weather has dried up over 70 per cent of water basins and rivers, according to the ministry of Special Programmes, with Kenya's largest river, Tana river, failing to discharge into the Indian Ocean. More than 300,000 livestock have died and maize production has dropped by 40 per cent, leaving over 10 million Kenyans food hungry.

To deal with the crisis, the government has had to reallocate over Sh22 billion from the Budget, slowing down the development agenda. It is also seeking donor aid to a tune of Sh25 billion to raise the Sh47 billion needed to avert a humanitarian crisis expected from the famine.

Recovery

During the signing ceremony, the government of Japan gave Kenya Sh830 million in foreign currency to help it import goods that would speed up recovery. And in another meeting on Wednesday, the Monetary Policy Committee (MPC), the country's top economic advisory body, also pointed to an expected slowdown in growth.

In statement relayed to newsrooms, the committee, which had met to review the country's economy and lay out policies to accelerate its growth, said agriculture, livestock and energy dependent sectors have been adversely affected by the drought.

"These factors may stifle economic growth in the third quarter," Prof Njuguna Ndung'u, Central Bank of Kenya governor and chairman of MPC, said on Wednesday.