Kenya Q3 growth rate picks up on agriculture boost

By Muhammad Iqbal

NAIROBI: Kenya's economy expanded by 4.7 percent in the third quarter of this year from 4 percent in the same period last year, boosted by agriculture and manufacturing, the statistics office said on Monday.

On a seasonally-adjusted basis, east Africa's biggest economy grew by 2.2 percent in the third quarter, up from 0.5 percent in the second.

"The expansion was more robust in comparison to the preceding quarters of 2012 primarily due to strong performances of the agriculture and forestry, fishing, manufacturing, transport and communication and a turnaround in the performance of the electricity industry," the Kenyan National Bureau of Statistics said in a statement.

Economic growth in Kenya has been sluggish in the first half of the year as the economy expanded by 3.4 percent and 3.3 percent in the first two quarters, when key sectors like construction sagged under the weight of high interest rates.

Kenya's current account deficit narrowed 21 percent to 105.4 billion shillings ($1.23 billion) from 133.5 billion during the same period last year. However, the deficit widened compared to 63.3 billion shillings recorded in the second quarter of 2012.

A Reuters poll shows the economy should accelerate to 5.5 percent growth next year assuming March 2013 elections are peaceful and benign inflation gives the central bank room to cut official interest rates further.

The Finance Ministry has said the economy will grow 5.6 percent in 2013, outpacing this year's forecast of 5.1 percent, thanks to strong rains boosting farm output.

Copyright Reuters, 2012

Strong agriculture pulls up Kenya GDP growth to 4.7pc

By MWANIKI WAHOME,

 jwahome@ke.nationmedia.com

Agriculture powered the growth of the economy in the third quarter to record 4.7 per cent compared to 4 per cent in the same period last year.

The sector, that recorded a low of 2 per cent in the first quarter, dramatically improved in the third quarter to 6.9 per cent to anchor the growth of the economy that has been struggling to reach the 7.1 per cent growth rate experienced in 2007, before the post election violence that clawed back the gains.

Other sectors that registered high performance were manufacturing, transport and communication, and the electricity generation boosted by heavy rains in the country.

Other sub-sectors in agriculture that registered growth were forestry and fishing.

The effect of maize disease in South Rift was offset by the adequate rains in other parts of the country. Production of maize, beans, sugar cane and fruits improved significantly in the period under review.

“The expansion was more robust in comparison to preceding quarters of 2012 primarily due to strong performance of the agriculture and forestry, fishing, manufacturing, transport and communication and turnaround of the electricity industry,” said the Kenya National Bureau of Statistics in its latest report on the economy.

The period was characterised by low inflation that averaged 6.4 per cent compared to high 16.5 per cent in the same period in 2011 on account of lower food and fuel prices.

The interest rates remained high at 13.6 per cent which was however an improvement compared to 18 per cent in same period in 2011, which was attributed to Central Bank maintaining a tight monetary policy.

Manufacturing was buoyed by rebound in processing of sugar that recorded 48.7 per cent compared to 38.2 per cent in the same period last year. Others were beer at 17.1 per cent, wheat flour 16.3 per cent and maize meal 9.3 per cent. Motor vehicle tyres, laundry and toilet soaps recorded the highest growth in the non-food category.

Electricity and water supply increased by 13.7 per cent compared to 11.1 per cent due to the heavy rainfall, increasing hydro-power by 39 per cent and reducing thermal generation by 25.2 per cent. Geothermal production declined by 2.3 per cent in the period.

Hotels and restaurants were hit hard by terrorism and slowdown in economies of Europe and America as visitors reduced to 342,135 in the third quarter from 383,100 last year.

Construction was slowed down by high interest rates, recording only 0.6 per cent growth compared to 3.6 per cent last year which was mirrored by low production and consumption of cement. In the third quarter of 2011, cement production grew by 8.9 per cent and consumption by 7.7 per cent.

Transport and communication recorded 5.2 per cent growth in the period under review compared to 3.9 per cent last year boosted by the communication sub-sector that registered significant 54.5 per cent growth.

Despite the export cargo contracting by 24 per cent, the Mombasa port registered growth in volume of cargo mostly boosted by increase in imports that registered 11.4per cent.

The financial sector overcame the challenge of high interest rates to record 6.8 per cent growth compared to 7.6 per cent in the same period last year.

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Scott says agricultural sector has been static in 50 years

Vice President Guy Scott has observed that the agricultural sector in Zambia has remained unchanged for the past 50 years.

Dr Scott says agricultural sector has not moved due to the land tenure system which is customary as well as state and hoped that the Commonwealth Agricultural Conference currently taking place in Zambia will greatly benefit the sector.

The Vice President said this at the 25th Commonwealth Agriculture Conference being held in Livingstone under the theme is “Africa’s role in world food production”.

At the same occasion, Her Royal Highness Princess Anne of the United Kingdom, who is in the country, said that needs to improve food and energy by 50 per cent and provision of fresh water by up to 30 per cent by the year 2030.

Princess Anne said she is encouraged by the number of young people who are engaged in agricultural activities and hoped that they will be embedded in agriculture in order to allow the transfer of knowledge.

The Princess said Zambia has potential to develop in both the agricultural and tourism industries due to its rich soils and wildlife.

The Princess has since thanked the Zambian government and the Agricultural and Commercial Society of Zambia for its contribution to the agricultural sector.

The conference has representatives from 14 countries which include Australia, Botswana, Canada, England, Kenya, New Zealand, Papua Guinea, and Scotland. Others are United States of America, Zambia and Zimbabwe.

ZANIS

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Kenya: Resource-saving Agriculture

The combination of conservation agriculture and agroforestry techniques is boosting farm productivity in Kenya.BY GEOFFREY KAMADI

Nairobi, Kenya:

The need for simple, cheap, yet effective solutions to many challenges facing agriculture in poor countries remains crucial. This has a particular urgency in Africa. In the face of all its challenges, techniques that require minimum or zero inputs are increasingly emerging as the best option for Africa’s small-scale farmer.

Leguminous trees bring more milk

Incorporating fodder trees (trees that are highly nutritious, easy to grow, and improve soil fertility) in farms under agroforestry has seen dairy farmers boost milk production and household income. Such fodder trees as trichandria, tree lucane, Sesbania sesban, and sawyer lupin are leguminous, which means they fix nitrogen into the soils and enrich them. The farmer will therefore not necessarily need synthetic fertiliser. This is significant especially considering that fertiliser application in Africa remains poor - at a mere 8kg/ha (3.2 kg/acre) annually.

The World Agroforestry Centre (ICRAF) has shown that the overall impact of fodder shrubs in terms of additional net income from milk production is high. In Kenya, over the past 15 years incomes have grown from KSh 1.6 billion to KSh 2.5 billion ($19.7 million to $29.6 million). There are about 225,000 small-scale farmers in East Africa who grow fodder shrubs to feed their dairy cows, for the purposes of increasing milk production.

Mary Gichuki, trained by the ICRAF in 2006, practices this type of agriculture. She grows leguminous fodder shrubs in her small farm in Limuru of Kiambu County, some 20km west of Kenya’s capital Nairobi. 

“By mixing napier grass with fodder shrubs in the ratio of 1:3, I have seen a steady increase in milk production by my dairy cows from 5kg to 50kg per day per cow,” says Gichuki, who is also a farmer trainer.

Gichuki now has a tree nursery from which she sells the seedlings to other farmers, besides earning more from the milk. 6,000 seedlings have already been sold this year at a cost of between 15 – 30 KSh (USD 18 - 35 cents) each.

Reaping the benefits: Conservation Agriculture for a more fertile soil

Agustine Mbugua is reaping the benefits of conservation agriculture in his single acre piece of land in the Ngata Division of Nakuru County, 170km west of Nairobi. “Not only have I stopped using fertiliser on my farm because the manure from the crop cover provides enough nutrients to the crops, but the labour costs have gone down. I used to engage two farm hands before, but I am in need of only one,” he says. A five-hour labour on his farm used to cost him 200 KSh (about $2.4), per worker daily. He adds that while he used to harvest only eight, 90kg bags of maize from the single acre farm, the yield has since gone up to 20 bags.

Based on the three principles of minimum soil disturbance, crop rotation and the use of permanent soil cover, conservation agriculture has been shown to increase soil fertility. The permanent soil cover provided by crop residue decomposes to become manure and therefore enriches the soil. This cover helps retain moisture which can help grow a second crop, without over reliance on rainfall. Furthermore, crop rotation helps in reducing infection by disease, while minimum soil disturbance reduces the amount of soil carbon escaping into the atmosphere.

Combining Agroforestry and Conservation Agriculture

However, a new study conducted in Kenya, Tanzania, Zambia and Ghana released early this year by ICRAF and the Africa Conservation Tillage Network (ACT) shows a mere 5% of African farmers apply the three principles in combination. A total of 1,301 farmers in a combined 25 districts in these countries were sampled. The aim of the study was to show how the combination of conservation agriculture with agroforestry can boost farm productivity much more than either of the practices used in isolation. The use of both techniques is what is now known as conservation agriculture with trees (CAWT).

“A very small number of farmers practice conservation agriculture using the three principles,” said Engineer Saidi Mukomwa, chief executive of ACT. 

Scientists contend that this type of agriculture is ideal in the face of climate variability, where irregular rainfall patterns are becoming the order of the day. ACT, which has been promoting conservation agriculture, is now working with the ICRAF in this new effort. And in the wake of new concerns about a decreasing supply of phosphate in the world, the use of the two agricultural systems can only be a welcome development. Phosphate rocks are the base for manufacturing phosphate fertiliser.

“When we look at the natural resources available in the whole world, there is a high likelihood of the shortage of phosphate supply in the near future,” says August Temu, deputy director of Partnership and Impact at ICRAF. He adds that there may be certain components in the inorganic fertilisers that are produced industrially that may not be available in adequate amounts, especially for farmers in the developing world which are not endowed with phosphate deposits. ”These fertilizers will therefore become scarce and more expensive,” he says.

A lack of data

One of the major challenges hindering expansion of conservation agriculture with trees in Kenya has been the lack of comparative data.

“Conservation agriculture with trees needs to be backed with hard data in terms of the benefits the farmer gets in both short and long term. These are the parameters that are missing in relation to other technologies,” said Engineer Jasper Nkaya, of the Ministry of Agriculture, in charge of agricultural services.

Leah Mong’ara, an extension officer with the Ministry of Agriculture, Rongai District says that another challenge lies in what she calls "crop-livestock conflict". “This is where a farmer finds it difficult to leave plants residue in the farm after harvesting when he could just as easily given it to his cows as feed,” observes Mong’ara.

Think Africa Press welcomes inquiries regarding the republication of its articles. If you would like to republish this or any other article for re-print, syndication or educational purposes, please contact: editor@thinkafricapress.com

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Kenya: Agriculture Holds Key to Coast Economic Growth

OPINION

The Government has singled out agriculture as one of the key sectors that will drive the growth of our economy. For this reason, we have consistently increased budgetary allocation to the sector. In the current financial year, Sh104 billion shillings, which is about 7 percent of the national budget has been allocated to the Sector, in support of recurrent and development expenditure.

The Coast region has greatly benefitted from the allocations we have made for the agriculture, livestock and water sectors. Regarding livestock development, farmers in the region earned Sh5.9 billion shillings from beef, dairy, poultry and bee-keeping products last year. This was made possible through the concerted efforts of the Government in re-opening K.M.C., New KCC at Miritini and improving disease control progammes.

To further develop this sector, the Government has rehabilitated the Mariakani Dairy Cooperative Society plant with additional processing capacity of 5,000 litres per day. My Government has this financial year allocated Sh1.4 billion for the establishment of a Coastal Disease Free Zone, completion of a Slaughter House in Garsen, rehabilitation of Mariakani Regional Vet laboratory to international standards and rehabilitation of satellite laboratories at Ukunda and Witu. I urge farmers to adopt improved livestock breeds for both dairy and beef farming.

There is also great potential for sugar industries in this region. I am pleased that the Kwale International Sugar Company will start producing sugar by March next year. This factory will cost approximately Sh18 billion. When fully operational it will employ about 3,000 people directly and another 11,500 indirectly. I assure Kwale International Sugar Company of the support of my Government in this venture. However, I urge them to recruit as many farmers as possible as out growers in order for them to benefit from the factory.

Last year, I directed the Ministry of Agriculture to start the process of establishing another sugar factory in the North Coast. While I am pleased that the preliminary feasibility studies have been completed, I call upon the Ministry of Agriculture, the treasury and other agencies concerned to speed up the process.

While lauding the efforts we have made in this region, more effort is needed to increase production. For example, while the region has a potential to produce coconut worth Sh13 billion the current production is worth Sh3.2 billion only. Similarly, while the region has the potential to produce cashew nuts worth over Sh1 billion, the current production is worth Sh280 million. In addition to these industrial crops, this region has high potential for horticultural crops.

Last year, horticultural crops earned the region Sh850 million. This is a small fraction of the existing potential. I urge farmers to devise ways and means of harnessing the unutilized potential and enhance income. The Government will continue to take more steps to create an enabling environment for increased production. In an endeavour to alleviate land problems at the Coast, the Government through the Ministry of Lands has undertaken various initiatives.

These include Land adjudication, settlement, regularizing land ownership, nullification and recovery of illegally allocated public land. Under the Squatter Programme, a total of 53,000 squatters have been issued with ownership documents in an area covering 250,000 acres. Equally important, a total of 4,000 titles have been issued to indigenous people located in various Swahili villages in Lamu.

Issuance of title deeds should be fast tracked.In the area of infrastructure, the dredging of the Mombasa Port is now complete. We are now receiving huge ships never seen in Mombasa before. This has made Mombasa a regional hub and major transport corridor. Construction of a second container terminal is set to begin in a few weeks time.

The terminal that will be nearly one kilometre long will cost Sh25 billion. The Dongo Kundu by-pass and construction of modern dual carriages and highways around Mombasa Island is set to begin at a cost of Sh30 billion shillings. This will also create new economic and social frontiers in this region.

We have also begun construction works on the second Port, as part of the Lamu Port - South -Ethiopia Transport Corridor. This will be Kenya's second development corridor after Mombasa-Malaba. It will create huge opportunities for this region, our entire country and provide a link to neighbouring countries.

We will also begin construction of the standard gauge railway line from Mombasa. This should cut the journey to Nairobi to just two hours.We will also be expanding the Mzima Springs water project in order to ensure a reliable flow of water in this area. To further boost the fortunes of small scale traders, more markets will be built to serve the fisheries sector. The markets will also enable locals to tap the market for tourists and other visitors.

Another intervention being made by the Government is in irrigation because of its huge potential. We are in the process of doubling the acreage under the Bura and Hola Irrigation Schemes. In the next one month, we will ground-break the start of an extra 25,000 acres of land under irrigation in the Bura project.

I wish to remind all Kenyans, that we must always maintain peace and security which is the foundation of our prosperity and democracy. We have just concluded the county peace fora and national peace conference. During these events, Kenyans were unanimous that we should embrace, co-exist and tolerate each other as one people and one nation.

We should never allow any negative forces to divide us along any lines. In this regard, I encourage all Kenyans to work with the Government and seize the emerging opportunities. This is especially critical as we devolve responsibility to the counties. Devolution is an important facet of development.

I advise you to elect responsible leaders who will guide you into an era of social cohesion and economic prosperity in the years ahead. Indeed, counties that will collaborate and partner within and between each other will derive greater economic dividends over those that work alone.

This is an excerpt of President Kibaki's speech at the official opening of this year's Mombasa International Show whose theme is "Enhancing Technology and Industry for Food Security and National Growth.

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Tanzania: Kikwete Welcomes Foreign Agricultural Investors

BY ABDUEL ELINAZA

Addis Ababa, Ethiopia — TANZANIA has welcomed agro-business investors from around the world describing the move as beneficial to small-scale farmers.

President Jakaya Kikwete made the appeal at the 22nd World Economic Forum, Grow Africa Forum: adding that: "We in Tanzania are ready to do business. That is why we attended this meeting."

President Kikwete said that the national agriculture investment strategy prioritizes groups that can benefit from new market opportunities and modernize the sector in order to make farming more attractive to the youth in the country.

"When we bring in the private sector the initiative is tailored to benefit the small-scale farmers. We need to modernize agriculture and make it more attractive to the youth," he said.

The president's sentiment follows the fact that about 50 per cent of the nation's population comprises young people aged below 30 years. It is most of these young people who feel that farming is a back-breaking occupation.

He said governments have an important role to play in providing support in areas of irrigation, inputs and building commodity markets. However, private sector investment is also essential to avoid over-dependence on subsidies.

The president is expected to deliver a speech at the G8 summit at Camp David in the US next week about the country's ambition to implement plans contained in the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) project, following an invitation from President Barrack Obama of US. The US pledged to support the project.

The Grow Africa Investment Forum, convened jointly by the African Union, New Economic Partnership for African Development and the World Economic Forum, engaged over 270 leaders including heads of state and governments from Ethiopia, Rwanda and Tanzania, as well as leaders of African and global business, international and donor agencies and farmers' organizations.

Participants noted that African agriculture offers tremendous growth potential to investors which can strengthen food security and economic opportunity on the continent."Greater private-sector investment and improvements to the business enabling environment are needed to capture that potential," a WEF press release stated.

Ethiopia Prime Minister Meles Zenawi, said, "We have scratched the surface, but we haven't yet broken the mould. When we do that you will see the explosion of development in Africa."

Rwandese President Paul Kagame said: "We can mobilize farmers into an entrepreneurial mindset and create new opportunities for women, youths and rural entrepreneurs." The Grow Africa partnership has developed significant momentum since it was catalyzed by African and global leaders at the 2011 World Economic Forum on Africa.

The potential seen in African agriculture presents a transformational opportunity, according to Josette Sheeran, the Vice-Chairman of the World Economic Forum.

"We're at a tipping point," she said. "Working together, we can ensure that when we meet in 10 years, it will be in an Africa that is not only feeding itself, but helping to feed the world." The Grow Africa partnership is coordinated by the African Union, NEPAD and the World Economic Forum with a goal of galvanizing sustainable investment into African agriculture, based on country-led priorities.

Rwanda, Burkina Faso, Tanzania, Mozambique, Ghana, Kenya and Ethiopia are the first countries to engage with Grow Africa, geared to meet world food demand and security. The way to realize this is through a transformation of small-scale farming on the continent by increasing the productivity of small farmers and having them well organized and collaborative, to take advantage of supply chains and investments.

Meanwhile, President Kikwete has directed the management of the Dar es Salaam Stock Exchange (DSE) to act promptly and open doors for more members to join and benefit from the stock exchange. The DSE which was established by the government and incorporated in September 1996 started trading in April 1998. Currently there are 37 shareholders.

According to a statement issued by the Presidential Communication Office in Dar es Salaam yesterday, President Kikwete underlined the need for expedited formation of capital market and commodities to protect farmers from traders who collude to dictate farm products market prices. They give minimal prices.

President Kikwete issued the directives on Thursday at the end of a guided tour of Ethiopian Commodities Exchange (ECX) where he was briefed on its operations. He was in Ethiopia to attend the World Economic Forum summit, African Zone that ended on Friday.

The Chief Executive Officer, CEO of ECX, Dr Eleni Gabre-Madhin, informed President Kikwete that the Ethiopia Commodities Exchange was established four years ago and has registered 450 shareholders. Dr Gabre-Madhin informed President Kikwete that at least four crops were traded at the stock exchange and prices are uniform all over the country. These are coffee, sim sim, maize and peas.

"Mr President, you know that the biggest lender in Africa is not the World Bank or IMF but small scale farmers who sell their crops on credit. The new arrangement has eradicated exploitation by traders. Usually a few hours after selling crops, money is deposited in the farmers' bank accounts for their convenience," Dr Gabre-Madhin explained.

Responding to the remarks, President Kikwete said the Dar es Salaam Stock Exchange should extend the horizon to allow more members especially farmers to join and benefit from the stock exchange.

"The administration must learn from Ethiopia where ordinary farmers are no longer cheated by middlemen. This (enrolment of more shareholders) must be accomplished soonest," President Kikwete emphasized.

He added, "There is no doubt the inclusive stock exchange will speed up the agricultural development process for the benefit of the people. We need a stable and undisturbed market where farmers receive suitable payments away from oppressive traders," he observed.

The activities of the DSE are monitored and supervised by the Capital Markets and Securities Authority (CMSA). The DSE operates in close association with the Nairobi Stock Exchange in Kenya and the Uganda Securities Exchange in Uganda. Plans are underway to integrate the three to form a single East African bourse.

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Kenya's Agriculture Sector Badly Impacted By Climate Change

NAIROBI, May 11 (BERNAMA-NNN-KNA) -- Climate change has impacted negatively on Kenya's agricultural sector, translating into heavy economic losses for the country, Provincial Commissioner of North Eastern Province James Ole Seriani said.

Agricultural operations are mainly rain-fed in Kenya, making the sector extremely vulnerable to climate change variability, said Ole Seriani, the head of administration of the province, who adds that it is worrying that the areas that are traditionally considered "safe" from extreme climate and weather events like droughts and floods have witnessed repeated crop failures in recent years.

In a speech read on his behalf by Deputy Provincial Commissioner Jeremiah Were at the opening of a two-day stakeholder's consultation on Kenya National Climate Change Action Plan here Thursday, Ole Seriani noted that the trend would adversely impact on Kenya's food security.

"Agriculture is the mainstay of the Kenyan economy, directly contributing 26 per cent of the gross domestic product (GDP), and another 25 per cent indirectly. The sector accounts for 65 per cent of Kenya's total exports and provides more than 70 per cent of informal employment in the rural areas," he said.

"It's on this regard that the Kenya government, with support from development partners and other stakeholders, is in the process of developing a Comprehensive Action Plan to implement the National Climate Change Response Strategy (NCCRS) which was launched in 2010."

Once the action plan is ready, Ole Seriani added, the operational sub-components would be mainstreamed into the relevant socio-economic sectors and funds identified for implementation. The process was designed to involve county stakeholder's consultations in line with Kenya's new Constitution to ensure a true Kenyan process owned by Kenyans.

Ole Seriani asked the participants, drawn from Garissa, Wajir and Mandera counties, to share their experiences on impacts of climate change and to suggest roles the government should play to help fight the adverse impacts of climate change.

The administrator said North Eastern Province was vulnerable to climate change and had borne the brunt of prolonged droughts, which were at times followed by floods, leading to further losses of life and property.

-- BERNAMA-NNN-KNA

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