KENYAN MINISTER FORECASTS ECONOMIC EXPANSION

  Kenya's economy will continue to expand
  this year and the government will do more to encourage
  investment by foreign firms and the local private sector,
  Planning Minister Robert Ouko said.
      He told a news conference that the government would soon
  create a special bureau to expedite processing of investment
  applications by local and foreign investors.
      Praising the role of multinational companies and local
  entrepreneurs in Kenya's economy, the minister promised to
  maintain a close working contact with the private sector.
      The economy grew by 5.3 pct last year, up from 4.1 pct in
  1985, Ouko said.
      This was owing to high prices for the country's coffee
  exports, low oil prices, low inflation and rising real incomes,
  he added.
      "Despite rising petroleum prices and falling coffee prices,
  Kenya's economy is still expected to improve in 1987," the
  planning minister said.
      "High aggregate demand arising from low inflation, trade
  liberalisation and disciplined financial management are
  expected to increase output in the manufacturing sector," he
  said.
      Agriculture would expand significantly if favourable
  weather continued and farmers responded to producer price rises
  announced in February, the minister added.
      Kenyan farmers are anxiously awaiting the arrival of the
  long rainy season, which is due to start about now.
      Ouko said the production of Kenya's main cash crops
  increased during the second half of last year.
      Coffee deliveries to the state-run Coffee Board of Kenya
  rose 17 pct and tea deliveries rose four pct during the period,
  he said.
      Ouko paid tribute to the private sector for its
  contribution to the economy and promised to improve government
  cooperation with businessmen by maintaining regular contact
  with them.
      "I wish to pay tribute to the private sector for its
  contribution to the economy in 1986 and challenge it to
  maintain the same spirit this year ... The manufacturing sector
  grew by an estimated 5.8 pct in 1986, in line with the same
  period the previous year," he said.
      Ouko said the "one stop" bureau was intended to stimulate
  investment and cut the time and bureacracy currently involved
  in processing applications.
      The planning minister presented a review of the Kenyan
  economy during the second half of 1986 which showed inflation
  falling to 4.3 pct from 10.2 a year earlier.
      This was owing to higher agricultural production and the
  Kenyan shilling's relative strength against other major
  currencies, the report said.
      The average exchange rate was 16.23 shillings per U.S. Dlr
  last year, a fall of only 1.2 pct from 16.432 in 1985. The half
  yearly report said exports increased about 30 pct in
  July-December 1986, while imports rose by only six pct during
  the period.
      This gave Kenya an overall balance of payments surplus of
  780 mln Kenya shillings (48 mln dlrs) during the period,
  compared with a 1.4 billion shilling (87 mln dlr) deficit in
  the second half of 1985, it said.
  

