The new data shows that construction – which has been a key driver of the Kenyan economic growth – expanded by 4.9 per cent in July-September compared with a 7.8 per cent growth in the third quarter of 2016.
“The slowed growth in the sector was partly attributed to the extended electioneering period that prompted investors to scale down construction activities,” KNBS said in its third quarter GDP report on Friday.
A sharp reduction in the availability of loans from banks, due to a cap on commercial bank lending rates imposed in September 2016, has also been blamed for the sluggish construction sector growth.
The dramatic slowdown is reflected in other related trades such as timber, metal and cement markets. Cement consumption fell by 13.09 per cent to 1.41 million metric tonnes in the third quarter of 2017 compared with the same period in 2016.
Importation of iron and steel products was significantly depressed, with volumes of imports plummeting by 66.1 per cent and 37.9 per cent respectively, the KNBS said.
It is likely that the slowdown was extended to the final quarter of 2017 owing to the prolonged electioneering period following the Supreme Court’s annulment of the election of President Uhuru Kenyatta – which led to a repeat poll in October.
Industry players are, however, hopeful of a better 2018 following the conclusion of the elections and the government’s recently unveiled four-point growth agenda that largely focuses on boosting local manufacturing.
“In my view 2018 will be a relief now with the government settled with a strong agenda to support the local economy,” says Pradeed Paunrana, the chief executive of ARM Cement.