The effects of post-election violence, a drought and the global economic crisis pushed Kenya’s economic growth to 1.7 percent in 2008, after expansion of 7.1 percent in the previous year.

“Last year, the recovery in tourism, and in some other key sectors, mitigated effects of the severe drought that caused food, water and energy shortages,” he said at the opening of parliament after a recess.

“As a result, the economy grew at 2.5 percent. This year we are optimistic that the forecasted 4.5 percent growth rate will be achieved.”

The 2.5 percent figure is in line with the government’s forecast of 2-3 percent growth for 2009.

Kibaki said a united coalition government and a low interest rate environment, were necessary for economic growth.

“Our politics must promote political stability and public confidence in the future of our country. Secondly we must take policy initiatives that will reduce and maintain low interest rates,” he said.

Parliament is reconvening amidst a deep division between the two main coalition partners, Kibaki and Prime Minister  Raila Odinga, over the suspension of ministers whose ministries have been accused of graft.

One of the major tasks ahead of this parliamentary session will be constitutional review.