Back in 2015, Kenya attained 'lower middle-income nation' status. Prior to that, we had been simply defined as a 'developing nation' which – as far as I can tell – means “officially poor”.
Outwardly nothing changed after this announcement. But government economists assured us that a significant milestone had been reached and that congratulations were in order.
I note, however, that the other countries in this category are not exactly famous economic success stories. Within Africa we are apparently to be ranked with the likes of Zambia, Swaziland, Congo and Lesotho, among others.
And yet I have met journalists as well as senior government officials from some of these countries who seem to believe that Kenya is a much richer country than theirs. Indeed, they regard us as being on par with Nigeria, South Africa and Egypt, insofar as we are routinely referred to as “the economic powerhouse of East Africa”.
All economic data are best viewed as a peculiarly boring genre of science fiction
Paradoxically though, whereas we have now been 'lower middle income' for almost five years, all we seem to hear from fellow Kenyans is just how hard a time they are having in trying to make ends meet.
Now if you find all this very confusing, then it is time I let you in on a little secret: The Nobel Prize-winning economist, Paul Krugman, once wrote that “All economic data are best viewed as a peculiarly boring genre of science fiction”.
This great authority on economics was basically telling us that these numbers and categories – these “metrics” to use the fashionable term – really mean very little. They are essentially approximations which could as easily be right as wrong.
Note, for example, that Kenya’s claim to a place among the “lower middle-income nations” was not attained by a great leap of economic growth. Rather it was by the “rebasing” of our economy.
As a local business newspaper reported it at the time, “The World Bank has confirmed Kenya’s lower middle-income country status following the change in the way the size of its economy is calculated which showed it was 25% larger than previously estimated.”
To appreciate the sheer absurdity of this – and why it is proof that Krugman is right in suggesting that such economic data is really no different from science fiction – consider this scenario:
If I am to judge by the newspaper reports as well as the very popular TV “reality shows” dedicated to weight-loss programmes, there are any number of matronly Kenyan women who yearn to be thin and are willing to go to great lengths to lose weight.
So what do you think any such woman would tell you if you walked up to her and told her “We have changed the way obesity is calculated and we now realise that – despite your regular visits to the gym – you are 25 kilos heavier than we previously thought”?
I offer this example because there are many here who regard economic data, whether from our government or from the World Bank, as absolutes. But in truth, they are nothing of that kind.
One final example to show how meaningless official data can be:
Over the past few years, the Kenya Power and Lighting Company, in furtherance of government policy, has been working hard to connect more and more Kenyans to the national power grid. This is known as the “last mile connectivity programme” and it basically subsidises the cost of such connection to individual households, mostly in rural areas.
I believe this effort is being made in pursuit of some UN “development goal”.
Well, hundreds of thousands of households have been connected. And every now and then we will see in the media a photo or video clip of some VIP sitting with a Kenyan family in their modest residence – often a mud-walled hut – enjoying a cup of tea in the well-lit interior.
But here is the question: this electricity, once connected, has to be paid for. And Kenyan electricity is arguably the most expensive in the region.
So, we may have impressive statistics of how many families have been “connected” through this project. But do they really stay connected in the months and years ahead, especially during such lean times as now, when even supposedly “middle-class” families often struggle to pay their electricity bill?
