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Is Kenya’s economy on the mend?

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hipposThis past holiday season in Kenya was quite a contrast to the preceding year.

While in 2008 December was dry and dusty, last month was marked by heavy rains across the country, making for soggy barbecues and muddy cars for the many urban Kenyans who usually like to spend Christmas with their families in the rural areas.

The rains have killed 20 people and displaced many more through flooding. But they are vital, given the country’s reliance on agriculture, which accounts for nearly a quarter of the country’s GDP and employs about two thirds of the entire population.

A prolonged drought had cut agricultural output, forced the government to appeal for funds to
feed about 10 million starving people and to liberalise imports of the staple maize crop.
Together with the emerging recovery of the global economy, the rains are giving rise to
optimism that the economy could grow by 3-4 percent in 2010 from an expected 2-2.5 percent in 2009.

The optimists also point to various government projects aimed at stimulating the economy, a
resurgent tourism sector and sustained monetary easing by the central bank as proof of a
possible rise in growth this year.

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