Cement consumption grows nine per cent, Kenya

Cement consumption grows nine per cent, Kenya
Published: 24 June 2004

Cement consumption in the domestic market has recorded remarkable growth giving indication of increased activity in the building and construction sector.

According to the Central Bank of Kenya’s monthly economic review, consumption increased by 9.1 per cent during the first four months of the year 2004 and is expected to rise higher as Government spending picks up.  The growth was two per cent higher than 6.8 per cent rate that was realised in the first four months of 2003.

"Performance in building and construction is expected to pick up substantially in 2004 in the medium term following renewed donor support to Kenya, particularly for the rehabilitation and reconstruction of infrastructure," says Central Bank.

Major projects planned for the financial year and beyond include reconstruction and improvement of sections of the Northern Corridor road.  Donor commitments towards this project are in the tune of US$275m in addition to ongoing European Union-financed improvements on the same road.  Additional resources for infrastructure are expected from the Swedish International Development Assistance (SIDA), African Development Bank (ADB), KFW and AFD - France.

These commitments will be complemented by Sh400, reciprocal funding from the Government. The Government also plans to concession part of the Northern Corridor on the basis of Build Operate and Transfer (BOT).

The Central Bank says other initiatives that are expected to boost economic activity in the medium term include the planned construction of bypasses and government housing projects such as the Kenya slum upgrading project.

Cement companies like Bamburi are looking ahead with bated breath hoping that the growth impetus will continue in the next financial year.  Statistics indicate that Kenya’s cement consumption has remained significantly low at 30 to 40 kg per capita per year compared to countries such as Ghana where per capita consumption is 80kg.  The low level of consumption has been blamed on high cost of production, which is in turn reflected in the higher retail prices and high level of poverty in the country