CBK governor Dr Patrick Njoroge. PHOTO | SALATON NJAU | NMG
Summary
- Dr Njoroge said small and medium businesses were backbone of the economy's resilience in 2017.
- Main drivers of MSMEs activity were in wholesale and retail trade, transport, storage and real estate.
- A survey undertaken by the CBK showed that two-third of the businesses were optimistic about the economy.
Micro, small and medium enterprises (MSMEs) in the services
sector have helped the Kenyan economy weather effects of a drought early
this year, a squeeze on credit growth and a prolonged electioneering
period, the central bank governor said today.
Dr
Patrick Njoroge said the economy, which he forecasted will grow by at
least 5.1 per cent this year, had “shown extraordinary resilience” when
faced by these headwinds.
“Services sector is doing particularly well. I would even say surprisingly well,” said Dr Njoroge at a press briefing Friday.
The
main drivers of the MSMEs activity, which account for 18 per cent of
the GDP, were in wholesale and retail trade, transport and storage and
real estate sectors.
“During Q3 the indicators shows
that they have been quite vibrant. These sectors are dominated by MSMEs,
who have been the backbone of the resilience in 2017,” Dr Njoroge said.
The
governor said agriculture was showing good signs of recovery from a
severe drought that started late last year and hurt farming in the first
half of the year.
The drought hurt production of key
foodstuff in the country like maize and wheat, forcing the government to
import grain and cushion consumers from price spikes.
Dr
Njoroge said horticulture and tea production, which are some of the top
revenue earners for the country, were also on a recovery path.
Positive outlook
A
survey undertaken by the CBK showed that two-thirds of Kenyan
businesses were optimistic about the economy, the governor said, adding
that he expected growth this year will be at least 5.1 per cent – in
line with a scaled down Treasury projection – before it pick up in 2018.
The economy has grown at a slower pace this year, forcing the government to borrow more and review its projections for the year.
“The outlook is very favourable,” Dr Njoroge said.
“In 2018, we expect the economy to be even more dynamic,” he added.
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