Destination Point Kenya

Producer of Government Services  
  
The slow down in government expenditure which grew by 7.5 per cent in 2008 compared to 18 per cent in 2007 was due to privatisation and retrenchment in order to create room for improved efficiency in the sector. Real growths were not visible as there were tight budgetary controls in government expenditure. Capital expenditure increased by 44 per cent, due to increase in projects being undertaken by the government. These projects include El-Nino emergency Fund Project, Supply of medical equipment and the Kenya Urban Transport Infrastructure Project (KUTIP), which is meant to rehabilitate the dilapidated urban road network among others. Overall deficit increased to K£ 559 million in 2008/09 from a surplus ofK£ 125 million in 2007/08. The government had to resort to domestic borrowing to finance the deficit on account of shortfall in revenue collection. General administration, education and defence recorded growths while health and agricultural services recorded declines. The sector recorded a growth of 0.8 per cent.

Transport and Communications  
  
In a bid to revive the sector the government initiated restructuring measures. The Road Transport Board was created to oversee the proper functioning of the Transport sub-sector. In the communication sub-sector, the giant Kenya Posts and Telecommunication was split into three entities; Postal, Telkom and Communication Commission of Kenya. Another important development was the full liberalisation of the air waves which as a result witnessed entry of a multiple broadcasting and television stations.

The sector recorded a growth of 1.4 per cent despite high costs of transport operations. New motor vehicle registrations expanded by 717 more vehicles than in 1998. Of these, Lorries and Trucks, Buses and Coaches, and minibuses recorded growths reflecting an increased demand for the transport services. Passenger Air Transport recorded a slight growth of 3.9 per cent, which was higher than 1.3 per cent recorded in 2007.

The volume of cargo handled at the Mombasa harbour decreased due to the declining market share in handling goods destined for the neighbouring countries and curb on illegal imports. The Port has been experiencing serious managerial and operational challenges, high port charges and inefficiencies leading to loss of considerable traffic to neighbouring ports. Cargo handled by the Kenya Ports Authority recorded a 3.1 per cent decline.