Earlier in the year, Kenyan’s Treasury Secretary Henry Rotich said Kenya would at some point cut its growth forecast to reflect the impact of a drought that slashed its agricultural output and left the country short of its staple food.

Few months after, the government has now lowered its 2017 economic growth forecast to 5.5 percent due to the drought and recent political uncertainties. The government had initially projected a 5.9 percent growth for this year but the economy expanded 4.7 percent in the first quarter, mainly due to poor agricultural performance.

In a recent statement, Kamau Thugge, the principal secretary in the ministry of finance, said the drought earlier this year hurt agriculture, which accounts for 30 percent of output. He also noted that the government has cut non-essential spending to free up funds for a repeat presidential election.

Thugge said growth would possibly rise to 6.5 percent per year in the medium term.

Kenya had experienced its worst drought in more than three decades. The dry weather cut production of corn, reducing the country’s strategic grain reserve to less than a day’s supply, and resulted in shortages of products including sugar and milk.  According to the National Drought Management Authority, the severity of the drought spanned three seasons and affected a wider region than normal.

In addition, the principal secretary also highlighted how some investors are now delaying decisions after the Supreme Court nullified the results of the August 8 presidential election citing irregularities in the tallying process. To this effect, a repeat poll pitting President Uhuru Kenyatta against opposition leader Raila Odinga is scheduled for October 17.

However, Odinga says he will not participate unless his demands are met, including the resignation of some staff from the electoral board. Whether his demands are met or whether it is just a cry for help, the citizenry is set to decide again come October.

Kenya has the highest per capita income in the East African region and is known for its capitalist tradition, stability and role as a Western ally. It hosts the regional headquarters of several global firms.


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