ECONOMIC SURVEY

Highest economic growth in decade pushed up jobs in 2021

The country's GDP grew by 7.5 per cent during the period under review

In Summary
  • The informal sector created 753,800 jobs, accounting for 81.4 per cent of total jobs.
  • According to the Kenya National Bureau of Statistics, the unemployment rate in the country rose to 2.65 per cent in 2020 from 2.64 per cent in 2019.
Treasury Cabinet Secretary Ukur Yatani ahead of the 2022-23 budget reading at the National Assembly on Thursday, April 07, 2022
Treasury Cabinet Secretary Ukur Yatani ahead of the 2022-23 budget reading at the National Assembly on Thursday, April 07, 2022
Image: FREDRICK OMONDI

Kenya's economic growth rose to an 11-year high last year, recovering from the Covid-19 low of negative 0.3 per cent to 7.5 per cent last year.

Kenya's Gross Domestic Product last hit such a high in 2010 at 8.4 per cent. 

The Economic Survey 2022 unveiled Thursday attributes the growth during the period under review to post Covid-19 recovery which saw sectors improve, except for agriculture which dropped due to low rainfall that hurt production. 

The sector, which contributed 22.4 per cent to the country's GDP declined by 0.2 per cent during the period under review compared to a growth of 4.6 per cent in 2020.

This saw maize production, the country's staple food, drop by 12.8 per cent to 36.7 million bags from 42.1 million in the previous financial year.

The production of other key food products, including beans, wheat and sorghum also dropped. 

"This is high growth in many years. This speaks to effective measures the government put in place to shield the economy from the adverse effects of the virus that disrupted activities globally,'' Cabinet Secretary Ukur Yatani said. 

The measures saw slightly above Sh2 trillion added into the economy, raising the country's nominal GDP to Sh12.9 trillion from Sh10.7 trillion in 2020. 

The total value of output generated during the period under review stood at Sh18.4 trillion from Sh16.2 trillion.

The value of intermediate consumption increased from Sh6.3 trillion to 7.3 trillion, while the total value added to the economy rose to Sh11.1 trillion from Sh9.8 trillion in 2020.

Other sectors of the economy flourished in 2021, with the manufacturing sector, for instance, recording an accelerated growth of 6.9 per cent compared to a contraction of 0.4 per cent in 2020. 

The transport and storage sector expanded by 7.2 per cent compared to a contraction of 7.8 per cent the previous year, largely driven by the relaxation of Covid-19 containment measures, which constrained activities in the sector the previous year. 

Freight transport, through the Standard Guage Railway, increased from 4.4 million tonnes in 2020 to 5.4 million last year while passengers through the facility grew to 1.9 million compared to 806,ooo last year.

The total cargo through the Port of Mombasa increased by 12.5 per cent to stand at 34.76 million. 

The information and communication sector recorded a growth of 8.8 per cent compared to a 6.3 per cent growth in 2020.

This was mainly supported by an increase in mobile money and commerce transactions, coupled with the continued use of digital platforms and services picked during the pandemic. 

The total number of mobile money and commercial transfers increased by 31.7 per cent and 35 per cent respectively to stand at Sh6.9 trillion and 9.4 trillion. 

Activities in the financial and insurance sector were more vibrant in 2021, according to the economic survey, helping the sector to expand by 12.5 per cent compared to 5.9 per cent growth the previous year. 

The broad money supply in the market increased to Sh4.2 trillion in the review period from Sh3.9 trillion in 2020.

Credit to the national government grew by 21.5 per cent to Sh1.69 billion while that to the private sector expanded by 8.6 per cent to Sh3.1 trillion. Overall liquidity grew by 9.5 per cent to Sh6.2 trillion. 

The insurance sub-sector grew by 27.6 per cent compared to an 11.7 per cent improvement the previous year, with net premium income standing at Sh246,660. 

The accommodation and food service sector was worst hurt by the Covid-19 pandemic and recovered by a massive 52.5 per cent compared to a contraction of 47.7 per cent in 2020.

The number of international visitors grew 50.3 per cent to 871,000 from 579,000 the previous year. 

The positive economic sentiment saw the employment rate surpass pre-covid levels.

GROWTH IN JOBS

According to the economic survey, total employment outside small-scale agriculture and pastoralist activities grew by 5.3 per cent to 18.3 million during the period under review. 

Wage employment in the modern sector recorded a growth of six per cent compared to a decline of 6.3 per cent in 2020.

The total number of self-employed and unpaid family workers within the modern sector rose to 163,700 from 156,000 the previous year. 

The private sector employment was 68.3 per cent in 2021 which was slightly above 67.8 per cent reported in 2020.

The sector reported an employment rate of 6.8 per cent compared to a contraction of 10 per cent the previous year. 

The informal sector created 753,800 jobs, accounting for 81.4 per cent of total jobs created outside small-scale agriculture and pastoralist activities. 

According to the Kenya National Bureau of Statistics, the unemployment rate in the country rose to 2.65 per cent in 2020 from 2.64 per cent in 2019.

 

(edited by Amol Awuor)

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