ECONOMIC GROWTH

GDP survey does not represent reality

It is doubtful that in a country where people are living from hand to mouth can be said to be growing economically

In Summary

• Many hard-working Kenyans are struggling to put food on the table and barely have money in their pockets.

• And this has been witnessed by the growth in the number of loan apps in the market.

A fox was walking through the forest when he saw a crow sitting on a tree branch with a fine piece of cheese in her beak.

The fox wittily told the bird how noble it was terming its beauty as exquisite! “If her voice is as lovely as her beauty, she would no doubt be the jewel of all birds.”

The crow was so flattered by all this talk that she opened her beak and gave a cry to show the fox her voice. "Caw! Caw!" she cried, as the cheese dropped to the ground for the fox to grab.

Be wary of flattery, this story teaches us and should be the week’s lesson for Kenyans.

Last week, Treasury Cabinet Secretary Henry Rotich presented the 2019 Economic Survey that indicated Kenya's economy grew from 4.9 per cent in 2017 to 6.3 per cent last year. According to the report, Kenya’s economic growth was double the global and sub-Saharan Africa averages of about three per cent.

It is doubtful that a country where people are living from hand to mouth can be said to be growing economically.

The annual real average earnings per person increasing from Sh364,313 to Sh376,080, the survey showed. As a result, Rotich said, the cost of living improved significantly, with inflation dropping by almost a half from eight per cent in 2017 to 4.7 per cent in 2018.

These figures have been a source of major debates in various platforms since last Thursday. One thing that we all seem to be in agreement on is that on paper, the economy may seem to be doing well.

But the reality on the ground is that it is doing anything but okay with Kenyans not even ready to embrace these numbers by Rotich. Let’s be honest, times are tough and they have not been this difficult for many years.

The Central Bank of Kenya reported earlier this month that about 51 per cent of Kenyans are living hand to mouth. In its report alongside FSD, the 2019 Fin Access Household Survey noted that this is a rise from 34.3 per cent in 2016.

And we all cannot doubt this.

 
 

Even as government officials say that the economy grew more than the previous year, it could not create more new jobs. This irony has shocked and angered many Kenyans, as it is them who interact with the reality outside the paper numbers.

According to the survey, the number of new jobs created last year declined by 69,400 from 909,800 reported in 2017 meaning only 840, 600 were created. This is living more youth vulnerable to being lured to crime due to joblessness.

In 2017, there were 1,424 convicted inmates in the age range of 16-17 compared to 2,110 last years. The report further shows that 39,574 between the ages of 18 and 25 were convicted mostly for petty crimes.

If we do not do something, this trend will leave the country without enough youth to build its future, as many will be in jail. Job creation is an important indicator of a growing economy and we, therefore, see why most people who have been struggling to get employment are doubting Rotich’s numbers.

Many hardworking Kenyans are struggling to put food on the table and barely have money in their pockets. And this has been witnessed by the growth in the number of loan apps in the market today where many borrow and pay huge interests just to see the next day.

It is doubtful that in a country where people are living from hand to mouth can be said to be growing economically. How the government can ensure that all Kenyans feel this growth is the most important questions that we await answers to.

The state of the economy must represent the reality on the ground, and not only a few individuals must feel its effect across the board. If a majority of Kenyans continue relying on the ‘kadogo economy’ to survive, the government can never convince us that the economy is growing.