Kenya’s construction growth slows to weakest pace since 2013

Railway line
Construction of the SGR’s corridor at the Nairobi National Park on Dec 1, 2016. PHOTO | COURTESY

Construction growth in Kenya, East Africa’s largest economy, slowed in 2016 to the weakest pace in three years mainly due to the winding down of the Mombasa-Nairobi standard gauge railway construction.

Official figures on Wednesday showed that construction industry, which comprises buildings, roads and railway, grew 9.2 per cent last year compared with 13.9 in 2015 and 13.1 a year earlier.

“The slower growth was principally due to a considerable reduction in the activity of the construction of the standard gauge railway as it neared completion,” Zachary Mwangi, director general of the Kenya National Bureau of Statistics (KNBS) said in the Economic Survey 2017.

The decelerated growth was mirrored in the significant decline in imports of key construction materials such as iron and steel, which recorded a 14.5 per cent decline; and non-ferrous metals that posted a 2.2 per cent drop.

“The slowed growth was also evidenced by a slow uptake of loans in the building and construction sector from Sh106.3 billion in 2015 to Sh104.8 billion in 2016,” Mr Mwangi said.

During the period under review, cement production rose from 6.3 million tonnes in 2015 to 6.7 million tonnes in 2016, while consumption of the commodity went up by 10.5 per cent from 5.7 million tonnes in 2015 to 6.3 million tonnes in 2016.

Although the State has expressed optimism that construction will grow this year due to ongoing public infrastructure projects, the slowdown is likely to persist in 2017 due to the uncertainty around the August 8 polls.

The focus for the first eight months of the year will mostly be on completion of ongoing developments – with very few projects coming online during the political campaigns period.

The wait-and-see approach is informed by past incidents, both locally and globally during national elections, especially when a government is seeking re-election for a second term.

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