SM17 Seminar: Central Bankers and Inclusive Growth | Flickr
Kenya Central Bank Governor Patrick Njoroge SM17 Seminar: Central Bankers and Inclusive Growth

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 Kenya Central Bank Governor Patrick Njoroge said on Wednesday he expects economic growth to rebound this year, helped by sectors such as manufacturing, but that growth could be curtailed by the impact of drought on the agricultural sector.

Growth this year would be 6.1% and 5.6% in 2022, Njoroge told a virtual news conference. Last year’s economic contraction of 0.3% was limited by policy responses that kept the economy from shrinking more, he said.

On Tuesday, Kenya’s central bank held its benchmark lending rate at 7.0%, with its monetary policy committee saying it had taken note of emerging local and global inflationary pressures.

The central bank said the continued reopening of the services sectors, a recovery in manufacturing, and stronger global demand would spur the economy this year.

Njoroge said, however, there was concern over the agricultural sector.

“The one sector to flag is agriculture, and agriculture remains most uncertain largely because of the rains. It is true there are some parts of the country that are getting adequate rains, and there also parts of the country where there is drought,” he said.

Poor rainfall in parts of Kenya is expected to push 2.1 million people into acute food insecurity in the next six months, the International Rescue Committee said on Tuesday.


The finance ministry says it forecasts 2021 economic growth to exceed 6%.

Kenya’s economy, like others, has been hobbled by the pandemic, as restrictions to curb the spread of the coronavirus reduced revenues and stifled growth.

Recovery has started, but the pace could be curbed by a shortage of COVID-19 vaccines and new waves of infections, driven by the highly infectious Delta variant.

Njoroge said he the foreign exchange market should not be cause for concern.

“We don’t expect much concern coming from the FX market, and also in terms of reserves … which we believe are adequate for any potential shocks,” he said.

The shilling has lost 1.11% to the dollar so far this year. On Tuesday, it hit 110.40/60, Refinitiv data showed.


Official foreign exchange reserves stand at $9.45 billion, or 5.78 months of import cover.

Remittances, one of the East African economy’s sources of foreign exchange, would rise to about $3.4 billion this year from $3.09 billion in 2020, Njoroge said.