On April 19, 2017, the Kenya National Bureau of Statistics (KNBS) released the eagerly awaited Economic Survey 2017.

Yet, from the 309-page document littered with a sea-sand of numbers, only one figure has sparked an unending debate: 5.8 per cent.

Everyone in the amphitheater of the Kenyatta International Convention Centre (KICC) where Devolution and Planning Cabinet Secretary Mwangi Kiunjuri was unveiling the survey, was eager to know about Kenya’s economic performance in 2016. Few were palpably optimistic about the 2016 growth numbers.

Their fears would be confirmed after KNBS’ Director General Zachary Mwangi took them through the highlights of the survey. He inadvertently painted a bleak picture in which the growth of most sectors of the economy either slowed or stagnated.

Questioning numbers

Worryingly, two critical sectors - agriculture and manufacturing - experienced a sluggish growth. One reporter later joked that even before Mwangi revealed the country’s gross domestic product (GDP) for 2016, he had already formed an idea of how his story would be: “I was just about to write: ‘The economy slowed down...”

Instead, the Director General said Kenya’s GDP in 2016 had ‘grown’ by 5.8 per cent, up from a revised growth of 5.7 per cent in 2015. Now, the value of all the goods and services produced in Kenya in 2016, or GDP, rose from Sh6.3 trillion in 2015 to Sh7.2 trillion in 2016. “This is a lie,” retorted the reporter.

Kiunjuri expected some people, those who would be described as ‘haters’ in street parlance, to be skeptical of these numbers. “Look at negative thinking way of some Kenyans who do not want to appreciate that the country is moving forward,” said Kiunjuri.

“Now, there are those who are going to start questioning these numbers, we will fight them,” he thundered as though the Government’s political nemeses were in the room.

To Kiunjuri, numbers don’t lie; but to the reporter, these numbers were far from the truth. Did the numbers lie?

As Dr Joy Kiiru, an economics lecturer at the University of Nairobi puts it, it is not for economists to question the authenticity of the data released by the national statistician. That is better left to politicians, she told Weekend Business.

However, Mark Bohlund, Bloomberg’s Africa and Middle East economist, sees it differently. While Bohlund does not in any way suggest that the figures were cooked, he however questions the “quality” of data from Herufi House. The numbers issued, according Bohlund, do no tell the full story.

It is not the first time Bohlund is showing concern about the numbers. He did this when he visited Kenya in August last year. At the time, extension of credit to the private sector had reached its lowest level in 13 years raising concerns on the health of the sector.

Nonetheless, KNBS’s quarterly report showed that the economy had expanded by 6.2 per cent from April to June, 2016 compared to 5.9 per cent in the same period in 2015. “If the private sector is not borrowing to spend and invest, what is actually driving growth?” Bohlund wondered.

Throughout 2016, private enterprises in agriculture, manufacturing, mining and quarrying, construction, human health and social work activities and financial and insurance activities, experienced a slow growth, according to Economic Survey 2017.

The private sector is the largest employer and in a market economy like Kenya’s, it should also be the main driver of growth.

However, in much of 2016, the private sector struggled with most corporations firing rather than hiring. According to the Economic Survey 2017, the private sector employment increased marginally by 0.1 per cent to contribute 71.1 per cent of the all jobs. About 57,600 new jobs were created, 32,600 less jobs than those created in the year before.

Since January, over 20 companies either folded and shipped out or simply downsized leaving more than 10,000 employees without jobs. They cited a tough business environment as their main reason. Labour Cabinet Secretary Phylis Kandie, all but admitted that things were not good, noting that the Government would hold consultations with employers to draw “sustainable measures” in a move to contain what was fast turning into a labour crisis.

This reality, however, was never captured in the survey. Although the authors of the Economic Survey went through the pains in informing Kenyans about the global, US, European Union, United Kingdom, Japan and Germany rates of unemployment, they made no such attempts at determining Kenya’s.

However, the survey noted that over 800,000 jobs were created in 2016, about 90 per cent of these new jobs were in the informal sector. “We administer questionnaires to enterprises to establish the number of jobs created. We measure at a particular time since it is a stock concept. We only look at June,” KNBS boss explained.

James Gatungu, the Director for Production of Statistics at KNBS, told Standard’s Financial Standard that the agency works on the assumption that June of every year is a normal month. He, however, admitted that the agency had no way of capturing data of an employee, who say before June, was laid off.

“We get stock as at June 30. We don’t bother whether say within April or March you sacked some. All we ask is the employment status in the organisation as at June 30,” Mr Gatungu told Financial Standard.

The survey, thus, never captured job losses in the private sector in 2016. However, the United Nations (UN) 2017 Human Development Index (HDI) report released last week noted that Kenya, the biggest economy in the East African region, is creating far less jobs than it ought to.

Kenya’s unemployment rate, according to the United Nations, stands at 39.1 per cent while Tanzania, Uganda, Rwanda and Ethiopia stand at 24 per cent, 18.1 per cent, 17.1 per cent and 21.6 per cent respectively. For Kenya, what this means is that out of every ten adults, four are jobless.

There were other economic indicators that blinked red in the year under review. As Kenyans welcomed the new year, there were new developments at the Nairobi Securities Exchange (NSE)- the NSE index of 20 blue-chip companies slid below the psychological 3,000-level to hit a seven-year low of 2,971.10.

Besides a difficult economic environment, investors were also jittery about elections. Some adopted a wait-and-see, while others decided to move their hard-earned capital from the country. The country’s agricultural sector, the backbone of the country’s economy, was also ravaged by a debilitating drought which suppressed the supply of most basic foodstuff.

As a result, the cost of living for ordinary Kenyans went up as prices of unga, tomatoes, sukumawiki, and cabbages soared. So, how did the economy grow? According to Bohlund, the answer lies in what the national statistician has for long refused to reveal: a blow-by-blow account of public expenditure.

KNBS has not yet released this data. “This means that we have a less complete understanding of the economy,” says Bohlund who adds that Kenya, an economic powerhouse in the region, however, lags behind Uganda and Rwanda in terms of quality of data.

“A slowdown in private sector credit growth is normally expected to correspond with a sharp slowdown in real GDP,” adds Bohlund. Yet, real GDP last year remained “fairly” good, according to Bohlund.

Analysts think that most of the growth is being driven by the massive public expenditure, especially on mega infrastructural projects. And while there is nothing wrong with this, the Government is not doing much to stimulate activity by the private sector.

Expenditure on the Standard Gauge Railway (SGR) on which the country has pumped close to Sh327 billion, accounts for about 1.25 per cent of the country’s Sh6.5 trillion GDP.

In the financial year 2015/16, the Government spent Sh113 billion on roads, and this is expected to rise to Sh156 billion in 2016/17, inflating public expenditure.

Nominal GDP

But, it also seems like the growth is being driven by service sectors such as professionals, real estate, health and education whose impact is not as significant as agriculture and manufacturing.

Robert Shaw, an economist, says it is these industries such as construction driving much of the growth. However, even those in these inflationary industries, ultimately come to rely on such key sectors as manufacturing and agriculture.

Moreover, the economy seems to be experiencing what economists call “jobless growth” as computer-intensive sectors such information and communication, education and professional, administration and support services are the ones that have been growing.

There is also a problem when we calculate our GDP by looking at the prices (nominal GDP) of the products rather than the economic activities (real GDP). Or perhaps people should not question the figures, just yet. They are provisional.