4 January 2018

Kenyan Businesses Rebound With End of Prolonged Political Period

Kenya's private sector activity grew for the first time in eight months in December, a monthly survey showed Thursday, due to a return to relative political stability.

Stanbic Bank Kenya's Purchasing Managers' Index (PMI) for December, based on feedback from top executives of about 400 manufacturing and services firms, rose to 53 from 42.8 per cent in November.

A print above 50 denotes growth in overall business activity compared to the previous month, while a reading below that mark points to a contraction in activity undertaken by firms.

Companies surveyed reported growth in production, new orders, stocks of purchases and employment, reversing a generally downward trend since May.

The firms, however, said they continued to experience inflationary pressures which they passed onto consumers by raising selling prices on average.

"The Stanbic PMI rose above the 50.0 level mark for the first time since April as the private sector began to benefit from political stability," Stanbic Bank economist for East Africa Jibran Qureishi said in a statement Thursday.

"Looking ahead, we remain optimistic that growth will recover over the coming year supported by the agriculture and tourism sector, while a resumption in public spending will also add some much needed stimulus."

Jumpstart economy

President Uhuru Kenyatta's re-election in the October 26 repeat poll, boycotted by the main opposition coalition National Super Alliance (Nasa), was upheld by the Supreme Court on November 20.

Mr Kenyatta has since pledged to focus state resources on what he calls the "Big Four Agenda" - manufacturing, food security, affordable housing and healthcare - in to jumpstart the economy.

Latest official data shows economic growth dropped to a five-year low in the third quarter of 2017 due to the effects of a prolonged electioneering period, a slowdown in credit to the private sector and a biting drought earlier in the year.

- Reported by Constant Munda - Business Daily.


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