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DAM-L drought hurting Kenya economy/LS (fwd)

----- Forwarded message from Lori Pottinger -----

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Date: Fri, 13 Oct 2000 11:13:30 -0800
To: irn-safrica@netvista.net
From: lori@irn.org (Lori Pottinger)
Subject: drought hurting Kenya economy/LS
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[Charset iso-8859-1 unsupported, filtering to ASCII...]
Drought Puts Economy in Dire Straits

Panafrican News Agency
October 13, 2000

Nairobi, Kenya

The Central Bank of Kenya (CBK) says that the country's
economy is at a virtual standstill, while consumers have been severely hit
by inflation.

The bank has also predicted that the country will not achieve any overall
economic growth in
2000.

CBK, in its monthly economic bulletin for October, says growth will
stagnate because of
several economic factors including the current drought that is ravaging
most parts of the
country, especially its economic hubs.

The review says that provisional data on output from key economic sectors
indicate that real
Gross Domestic Product (GDP) grew by just 0.7 percent in the year up to
July 2000
compared to 1.4 percent in 1999.

There was a slowdown in all sectors of the economy.

The on-going energy crisis caused by prolonged drought has pushed up prices
in September
2000, with the underlying month-on-month inflation rising to 9.8 percent
from 7.6 percent in
August.

The overall month-on-month inflation also increased to 7.1 percent from 5.9
percent in the
same period 1999, CBK says, attributing the increase mainly to the high
cost of fuel and
power products and the depreciation of the Kenya shilling.

"A long running energy shortage has affected all businesses, while
fuel-induced inflation is
already being reflected in the cost of consumer goods.

"The shilling has plunged to a low of 79 to the US dollar," the review says.

The bank paints a gloomy picture of the prevailing economic situation in
the country, saying
that there would be no respite from the prevailing inflationary pressures
"for a while yet".

There is also less likelihood of normal rainfall during the
October-December short rainy
season, a factor that might compel the country's electric power generation
body to put on
hold, plans to step down the current heavy power rationing schedule.

CBK however, expresses optimism that growth may pick up in the first half
of 2001, but only
if normal rains are experienced and a more favourable investment
environment emerged
through the implementation of prudent macro-economic policies.


      Copyright _ 2000 Panafrican News Agency. Distributed by allAfrica.com. For
 information about the content or for permission to redistribute, publish
or use for broadcast,
                               contact the publisher.

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
      Lori Pottinger, Director, Southern Africa Program,
        and Editor, World Rivers Review
           International Rivers Network
              1847 Berkeley Way, Berkeley, California 94703, USA
                  Tel. (510) 848 1155   Fax (510) 848 1008
                        http://www.irn.org
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::



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----- End of forwarded message from Lori Pottinger -----