In the third quarter of 2023, Kenya's real Gross Domestic Product (GDP) demonstrated robust growth, expanding by 5.9 percent compared to the same quarter in 2022, where it stood at 4.3 percent.

This upturn was attributable to a notable rebound in agricultural activities that had experienced contraction in the preceding year. Data from Kenya National Bureau of Statistics shows growth in the Gross Value Added of agriculture, forestry, and fishing activities, registering a 6.7 percent increase.

This positive shift was largely driven by favorable weather conditions that characterized the majority of 2023, providing a conducive environment for agricultural productivity.

Fruit exports

Among the notable contributors to Kenya's economic growth were increases in fruit exports, which surged by an impressive 84.3 percent. The export figures climbed from 32,388.1 metric tonnes in the third quarter of 2022 to 59,684.5 metric tonnes during the period under review.

Additionally, both vegetable exports and tea production experienced notable upticks, recording growth rates of 35.4 percent and 28.0 percent, respectively. These developments underscore the resilience and adaptability of Kenya's agricultural sector, contributing significantly to the overall economic expansion.

However, amidst the positive trends, the third quarter of 2023 witnessed a decline in sugarcane production, marked by a 55.1 percent decrease in cane deliveries. This decrease is evident in the drop from 1.9 million metric tonnes in the third quarter of 2022 to 874,000 metric tonnes during the review period. Sugar production declined by 56.1 per cent to stand at 77.7 thousand metric tonnes in the third quarter of 2023, KNBS said.

Financial and insurance

Kenya's growth was not only fueled by the resurgence in agriculture but also benefited from expansions in the financial and insurance sector (14.7%), underlining the strength and resilience of the country's financial activities.

Additionally, the Information and Communication sector saw a growth rate of 7.3%, reflecting the ongoing advancements in technology and communication within the nation. A standout contributor to the overall growth was the Accommodation and Food Service sector, which exhibited an impressive expansion of 26.0 percent. This growth was predominantly driven by a surge in visitor arrivals, highlighting the positive impact of tourism on Kenya's economic landscape.

However, the Transportation and Storage sector faced a slowdown, with Gross Value Added (GVA) decelerating from 5.1 percent in the third quarter of 2022 to 2.8 percent during the review period. This deceleration was partly attributed to the high cost of petroleum fuels, revealing the sector's vulnerability to the current high fuel prices regime.

Read also: How insurance can serve as a governance mechanism in building climate resilience in Africa

Manufacturing

On a positive note, the manufacturing sector demonstrated steady growth, recording a 2.6 percent increase in the third quarter of 2023 compared to 1.8 percent in the corresponding quarter last year. This growth was largely propelled by the processing of dairy and tea products, with milk deliveries to processors increasing by 12.5 percent and tea production experiencing a notable uptick from 108,400 metric tonnes in the third quarter of 2022 to 138,800 metric tonnes in the corresponding quarter of 2023.

However, the growth in the manufacturing of food products faced constraints due to challenges in sugar processing, KNBS said.

During the quarter, the Kenyan Shilling experienced depreciation against all major international trading currencies in comparison to the same period last year. On average, the Kenyan Shilling lost ground against the Euro, Pound Sterling, US Dollar, and Japanese Yen by 30.3 percent, 29.7 percent, 20.6 percent, and 15.3 percent, respectively. Additionally, the local currency exhibited significant depreciation against the South African Rand, Tanzania Shilling, and Uganda Shilling.

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