HIGHLIGHTS OF THE 2009 ECONOMIC SURVEY

Ø The Economic Survey, 2009, which was released in May 2009, showed that
the Kenyan economy, whose recovery path was impressive with a GDP
growth of 7.1% in 2007, was severely affected in 2008 by a number of
factors. These factors which made the economic growth drop to 1.7% in
2008 included the 2008 post election crisis, the global financial crisis, the high
fuel and food prices among others

Ø Among the key sectors that were heavily impacted include Agriculture and
hotels and restaurants, whose value added contracted substantially by 5.1 %
and 36.1% respectively. The growth in agriculture and forestry, which
accounted for 21.6% of total GDP grew by 2.0%. in 2007

Ø Manufacturing sector, which accounted for 10.6% of GDP grew by 3.8% in

2008 compared to a growth of 6.5% in year 2007. The sector faced
challenges of increased cost of doing business caused by rise in inflation,
supply disruptions and temporary closures associated with the post election
crisis during the first quarter of the year. In addition subdued demand and
stiff competition from counterfeits also worked against the sector’s growth.

Ø Construction sector is one sector that had an impressive growth of 8.3% in

2008, up from 6.9% in year 2007

Ø Transport and Communications had a growth of 3.1% in 2008 compared

with 15.1% in 2007..

Ø Wholesale and retail trade grew by 5.1% in 2008 compared with a growth of
11.5% in 2007.

Ø The tourism sector had a major blow and its earnings is estimated to have
dropped from an estimated revenue of Kshs 65.2 billion in 2007 to Kshs.
52.2 billion in 2008, a drop of 19.9%.

Ø Total employment outside small-scale farming and pastoralist activities

increased from 9,478,900 in 2007 to 9,946,200 in 2008, reflecting a growth of
4.9% or 467,300 new jobs in 2008 compared to 5.4% in 2007 or 485,500 new
jobs.

Ø In 2008, 79.8% of all jobs were in the informal sector with 92.7% of all new
jobs created being in the informal sector.

www.fke-kenya.org 1
Ø Modern wage employment increased from 1,909,800 in 2007 to 1,943,500 in
2008, an increase of 1.8% or 33,700 new jobs. This compares with an
increase of 2.8% or 52,200 new jobs in 2007.

Ø Annual inflation rate increased from 9.8% in 2007 to 26.2% in 2008.

Ø The value of domestic exports grew from Kshs.261,685 million in 2007 to

Kshs.322,660 million in 2008, a growth of 23.3% compared to a growth of
14.7% in 2007.

Ø Total imports grew from Kshs.605,112 million in 2007 to Ksh. 770,651million

in 2008, an increase of 27.4%, compared with 16.0% growth in 2007.

Ø The share of exports to the African region was 47.1% in 2008 and is the
largest market followed by the European market with 28.6% share.

Ø The overall weighted index of major foreign currencies against the Kenya
Shilling indicated that the Kenya shilling on average depreciated by 18.0% in
2008 compared with an appreciation of 5.6% in 2007.

T.M. WAITHAKA
SENIOR RESEARCH AND POLICY CONSULTANT

19th June 2009

www.fke-kenya.org 2