This archive report was first published on 27 June 2020.
As the world grapples with the economic impact of the COVID-19 pandemic, Kenya's economy has shown unexpected resilience. According to Central Bank Governor Patrick Njoroge, the country's farm exports and remittances have experienced a significant recovery, offering a glimmer of hope in these challenging times.
Speaking at an online news conference, Njoroge revealed that tea exports, a key source of hard currency, rose by 15% in May compared to the same period last year. Additionally, exports of flowers, fruits, and vegetables grew by a third in the same month.
“The expectation that we were going to sink so much further has not been borne by the numbers or the reality,” Njoroge said, cautioning that the outlook remains uncertain.
Commercial banks have restructured loans worth Sh679.6 billion ($6.39 billion), nearly a quarter of the industry total, highlighting the extent of the damage to the economy. However, policymakers have left interest rates unchanged for the second time in two months, after cutting them in March and April following the first case of COVID-19.
Remittances, which had been severely impacted by the pandemic, have also shown signs of recovery, reaching $258 million in May, up from $208 million in April. This recovery is attributed to the growth of major economies abroad and the increased availability of remittance channels, including mobile phone transfers.
While the current account deficit is still forecast to be 5.8% of gross domestic product for this year, Njoroge expressed optimism that it could narrow in the coming months.
