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Kenya’s private sector activity dropped in August to its lowest level since May, with cash flow hitches hurting performance, the latest survey by Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) shows.
During the period manufacturing and services fell to 52.9 from 54.1 in July. Readings above 50 indicates growth. In May, the index stood at 51.3.
Cash flow problems was blamed on the backlog of bills from government departments.
Previously several companies have complained that the government takes years to settle bills for goods and services supplied to it, mainly due to widespread corruption.
The survey showed that a credit squeeze due to a cap on commercial lending rates, in place since late 2016, had also worsened conditions.