The first three quarters of 2019 saw Kenyan economic growth slow to 5.4%, a notable drop from the 6.0% growth over the same period enjoyed a year prior. The key sectors weighing on growth were agriculture, transport and electricity output, which all underperformed compared with previous years.
The agricultural sector recorded an average growth rate of 4.2% in the first three quarters of 2019; short of the 5.3% recorded in 2018. Similarly, transport and electricity growth declined 1.6% and 2.1% short of the growth achieved the previous year, which averaged 7.0% and 5.5% respectively.
Last year saw the government increasingly seek turn to both domestic and international markets to borrow. T-bill auctions remained oversubscribed, with an average subscription rate of 118.7% - though slightly below the 123.2% recorded in 2018.
“The yield on the 91-day, 182-day and 364-day T bills declined by 10bps, 80bps and 20bps to close at 7.2%, 8.2% and 9.8%, in 2019 from 73%, 9.0% and 10.0% at the end of 2018, respectively. This is mainly attributed to the Central Bank of Kenya’s (CBK’s) efforts to keep rates low by rejecting expensive bids n the auction market. Primary T-bond auctions in 2019 were oversubscribed with the subscription rate averaging 109.7%, which is higher than the average subscription rate for 2018, which came in at 75.8%”
