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.