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Kenya: Kenya’s GDP Growth Slows to 4.8% in 2022

Nairobi — Kenya’s GDP growth slowed down to 4.8 per cent in 2022 compared to a revised growth of 7.6 per cent in 2021, as the economy suffered from the effects of drought, the KNBS Economic Survey 2023 shows.

According to the survey, the decline was mainly attributable to a decline in the GDP contribution from the agriculture sector, which shrunk to 21.2 per cent from 22.4 per cent in 2021.

“Most of the key agriculture sub-sectors recorded declined performance resulting to a contraction of 1.9 per cent in the sector’s gross value added in the year 2022. Drought in most parts of the country severely affected agricultural production,” said KNBS.

During the year, the survey shows that maize production decreased to 34.3 million bags from 36.7 million bags in 2021.

Similarly, tea production decreased from 537.8 thousand tonnes in 2021 to 535.0 thousand tonnes in 2022 on account of depressed rainfall in tea-growing areas.

“Volume of horticultural exports decreased from 405.5 thousand tonnes in 2021 to 392.0 thousand tonnes in 2022,” the survey noted.

The quantity of marketed milk also decreased from 801.9 million litres in 2021 to 754.3 million litres in 2022 largely due to scarcity of fodder for livestock.

On the positive end, the volume of sugarcane deliveries increased from 7.8 million tonnes in 2021 to 8.7 million tonnes in 2022, largely on account of favourable weather conditions in sugarcane growing areas.

Coffee production also increased from 34.5 thousand tonnes in crop year 2020/21 to 51.9 thousand tonnes in crop year 2021/22, partly attributed to conducive weather conditions in the coffee growing areas and improved crop husbandry.

“The year 2022 was marked by many negative shocks from the supply side. The persistent shocks, which are still present, created permanent negative effects, impacting economic activity and the cost of living,” said Treasury CS Njuguna Ndungu.

The Treasury CS noted that the decline in the agriculture sector contribution affected agro-processing companies and the retail sector as a whole, leading to the decline in the country’s GDP growth but this is expected to improve in 2023 due to the improving climate conditions.

During the year, some of the key sectors that supported growth were Financial and Insurance (12.8 per cent), Information and Communication (9.9 per cent), and Transportation and Storage (5.6 per cent).

This saw the country’s nominal GDP increase from Sh12.02 trillion in 2021 to Sh13.36 trillion in 2022 while the gross national disposable income increased by 11.5 per cent to stand at Sh13.93 trillion in 2022.

Despite the decline in the country’s GDP growth, the Economic Survey 2023 noted that the country’s employment levels rebounded during the year, with 400,000 jobs being created.

Total employment outside small-scale agriculture and pastoral activities was 19.1 million in 2022 up from 18.3 million recorded in 2021.

The KNBS data shows that employment in the informal sector rose by 4.6 per cent to 16.0 million jobs while wage employment in the private sector recorded a growth of 4.8 per cent from 1.9 million jobs in 2021 to 2.07 million jobs in 2022.

Within the public sector, wage employment increased from 923,100 jobs in 2021 to 937,900 jobs in 2022.

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