Unpacking Kenya's growth data

Kenya's economic landscape has been a topic of discussion following the release of the 2021 Economic Survey by the Kenya National Bureau of Statistics after a four-month delay. The report revealed that the real GDP contracted by 0.3 percent in 2020, a significant drop compared to the 5 percent growth experienced in 2019. However, the outlook for the country is optimistic, with the economy projected to grow by 6 percent in the current year. To delve deeper into the intricacies of Kenya's growth data, CNBC Africa engaged in a conversation with Saitoti Torome, the Principal Secretary at the State Department of Planning in Kenya. Torome shed light on the factors that contributed to the delay in the release of the economic survey, citing challenges faced by data suppliers due to the impact of the COVID-19 pandemic. He outlined the rigorous process involved in recalibrating the country's economic statistics, ensuring accuracy and alignment with international standards. Despite the delay, Torome assured that the data was still utilized for internal budgeting processes, minimizing the immediate impact of the delay on fiscal planning. Moving forward, Torome hinted at the possibility of supplementary budgets in response to the revised GDP figures, with expectations set for the release of quarterly GDP numbers in the coming months. The recent rebasing of Kenya's GDP resulted in an expansion of the economy to 10.7 trillion, showcasing growth and revision based on updated surveys and data collection methods. However, the country witnessed contractions in key sectors in 2020, yet the Kenya Revenue Authority surpassed its targets, sparking questions about the tax base and revenue collection strategies. Torome highlighted the importance of widening the tax bracket while addressing concerns about the burden on common citizens. He emphasized the need for inclusive taxation policies that support economic growth without overburdening the population. In response to the vast informal sector in Kenya, Torome discussed government initiatives to incentivize formalization through financial literacy programs and access to credit and markets. The buy Kenya Build Kenya policy aims to promote local production and consumption, supporting small and large businesses alike. Looking ahead, Torome outlined the drivers of Kenya's projected 6 percent growth, citing improvements in healthcare, transportation, education, and tourism sectors. While challenges remain, the expectation is for a positive trajectory in economic performance, underpinned by resilience and strategic policy interventions.