During the 8th state of the nation address H.E Uhuru Kenyatta presented his speech based on Economy, social structure, and democracy. President Kenyatta stated that amid Covid 19 pandemic there were interventions set in place to reinforce the resilience in the economy while cushioning millions of households against harsh effects. He further stated that economically Kenya had become 6th wealthiest nation in Africa in terms of GDP of 11 billion Kenya shillings.
The Kenyans GDP currently stands at Ksh 11 billion shillings up from 4.74 billion shillings. On the 2nd quarter this year the economy grew by 10.1 % being the highest growth in the history of our economy. ICT sector grew by 21.15%, transport sector grew by 16% and manufacturing grew by 9.6%.
However, the claim that Kenya is 6th is the wealthiest country in Africa is true, but the approach and framework could be wrong. Kenya is only the 6th wealthiest in terms of GDP (total production of all goods and services and not evenly distributed through the economy).
A more accurate figure of economic situation is GDP per Capita or nominal GDP, Kenya is one of the bottom 20 in Africa with a per capita GDP of US$ 2,000 compared of with Seychelles with $26,120 per capita GDP.
Another indicator that reflects the wealth of a country is Purchasing Power Parity which takes into account actual income plus inflation and the prices of local goods and services. The current Kenyans inflation rate is at 5.4%. In 2020 the Kenyans Purchasing Power Parity was 44lcu from 21.3lcu from 2001 which shows there is only 3.95% growth rate annually.
Other than Gov’t expenditure which has been growing in terms of pushing the GDP is the growth of elite economy like banking, Tourism and hospitality and cooperate services Agriculture productivity has been stagnant and deteriorating. In simple terms the economic outlook is positive. The economy is projected to grow by 5.9% in 2022. The rebound assumes that the economic recovery strategy is being successfully implemented and Kenya is capitalizing on external liquidity and benefitting from initiatives to meet its external financing needs. Inflation is expected to remain within CBK target range of 2.5% to 7.5%. Downside risks could emanate from delay in fully reopening of the economy, failure to secure financing to execute the budget and bad social conditions during 2022 elections.