A slump in Kenya’s tourism sector for the third consecutive year is having a ripple effect on the food and accommodation sectors, the annual economic survey has shown.

The 2015 Economic Survey published by the Kenya National Bureau of Statistics shows that the accommodation and food services sectors recorded negative growth of varying magnitude as tourism earnings fell 7.3 per cent to about $930 million in 2014, from $1 billion in 2013 as insecurity and travel advisories issued by key source markets continued to bite.

READ: Kenya growth shrinks to 5.3pc on tourism, agriculture slump

Kenya’s Cabinet Secretary for Devolution and Planning Anne Waiguru said that the number of international visitors declined by 11 per cent from 1.52 million in 2013 to 1.35 million in 2014, which is mostly attributable to the security challenges the country has been facing.

The drop in international oil prices however came as a blessing to the economy as it jump-started several sectors by reducing the cost of production and input costs.

The survey showed that total quantity of petroleum products imported in 2014 increased to 4.5 million tonnes, up from 4 million tonnes the previous year, a 12.5 per cent jump. This also increased the total domestic demand for petroleum products by 5.3 per cent to 3.9 million tonnes.

In general, growth slowed down to 5.3 per cent, compared with 5.5 per cent recorded in 2013. This is still a far cry from the Jubilee administration’s promise of 10 per cent annual economic growth. The decline was blamed on poor performance of key sectors such as agriculture, manufacturing and tourism.

According to the survey, the agriculture sector in 2014 recorded a growth of 3.5 per cent to bring in $3.53 billion, compared with a growth of 5.2 per cent in 2013, which brought in $3.55 billion. The manufacturing sector also registered a 2.2 percentage points decline to grow at 3.4 per cent in 2014 compared with 5.6 per cent the previous year. The sector generated $571 million in 2014.

Top performing sectors were building and construction, which expanded by 13.1 per cent; transport, which grew by 13.7 per cent and ICT, which increased by 13.4 per cent last year. Kenya’s construction sector has been growing in recent years buoyed by increased spending on capital infrastructure projects by both the government and the private sector, and private sector investments in real estate development.

The increases in the cost of several food and non-food items, which outweighed notable falls in the cost of electricity and petroleum products including petrol, diesel and kerosene, saw the country’s inflation rise to 6.9 per cent in 2014, up from 5.7 per cent in 2013.

Biggest growth

The transport sector registered the highest growth of 5.0 per cent in 2014 compared with a growth of 1.22 per cent in 2013. The output value for the road transport sub-sector rose by 15.2 per cent to $6.2 billion in 2014, while the total freight traffic via rail expanded by 24.3 per cent, from 1.2 million tonnes in 2013 to 1.5 million tonnes in 2014.

Despite the negative growth, Kenya remains optimistic that in 2015, there will be improvement, with the International Monetary Fund projecting 6.9 per cent growth, while the World Bank projects 6 per cent growth.