2020: The key numbers that defined Kenya’s toughest year
By Peter Theuri | December 31st 2020
It was described as a year of survival, and the numbers said as much about 2020.
A health crisis that morphed into an economic crisis saw millions lose jobs.
The economy experienced one of the sharpest contractions in the second quarter, as schools, pubs, hotels and airports remained closed.
The government, which has not been getting sufficient tax revenues, plunged into the debt market to help stimulate the economy.
Besides giving taxpayers reliefs, the government also set aside some money as part of a stimulus package.
Sh8.4 trillion: This is the stock of Kenya’s total public debt, if you include the committed undisbursed debt of Sh1.35 trillion. Due to poor tax collection amid the adverse effects of Covid-19, the National Treasury resorted to borrowing to help stimulate the economy. Assuming a projected GDP of Sh11 trillion, the additional loans pushed the debt-to-GDP ratio to 76 per cent, which is close to, or over the 70 per cent threshold for low middle-income countries such as Kenya when adjusted for prevailing mitigating terms such as interest.
Sh57 billion: This is the amount of money the government expects to spend in the current financial year to simulate the economy that has been battered by Covid-19. Kenya’s public debt has touched a high of Sh8.4 trillion and is quickly racing towards the Sh9 trillion ceiling, as the government chalks up more borrowing in its fight against Covid-19.
Sh1,000: In March, after the first Covid-19 case was announced in the country, the Central Bank of Kenya (CBK), in partnership with payment service providers, waived fees on transactions for sums below Sh1,000. The move was aimed at preventing the spread of coronavirus through physical contact with money. Small traders were expected to benefit from this initiative, with the transfer of money between banks and M-Pesa accounts also made free. Mobile money transfers consequently increased after a slight decline in April, when Sh307 billion was transferred, to peak at Sh529 billion in October.
Sh111.6: The Kenyan shilling hit a historic low of Sh111.60 against the US dollar on December 17. With a weak shilling, the country was at risk of imported inflation as prices of imported goods shot up.
The country’s external debt stock also got inflated as the local currency weakened. On March 13, the day Kenya recorded its first case of Covid-19, the local currency was trading at Sh102.40 against the dollar. Since then, it has been on a downtrend as the clamour for dollars increased. The shilling had not depreciated past Sh104 in the previous five years, recording a strong Sh99 against the greenback in March last year. The weakening of the shilling, occasioned by deterioration in the country’s external position, resulted in more dollars leaving the country than they came in. Kenya is a net importer, which makes it vulnerable in case of a weaker local currency. But in what looks like a possible turnaround, the shilling, on December 23, appreciated, trading at Sh108.8 against the dollar.
March 13: The day the country recorded its first case of coronavirus. The infection hit a high of 688 positive cases four months later in July. The country’s positive corona cases stood at 94,768 as of yesterday, with 76,222 recoveries and 1,647 deaths.
12: The number of tourists who came to the country in April this year. The sector has been the hardest hit, with millions of jobs lost and hotels closed as governments worldwide instituted total lockdowns. Locally, the sector lost Sh80 billion.
-5.7 per cent: The rate at which Kenya’s economy contracted in the second quarter of the year due to the adverse effects of Covid-19 pandemic. In the same period last year, GDP expanded by 5.3 per cent. The Kenya National Bureau of Statistics noted that the poor performance in the quarter was characterised by substantial contractions in hospitality, education, taxes on products and transportation and storage, which consequently occasioned the significant downturn.
Sh1.38 trillion: This is the value of loans that were restructured by banks between April and October, when CBK brokered a deal with lenders to allow borrowers negatively affected by the pandemic to reschedule their loans. This represented 46.5 per cent of the total banking sector loan book of Sh2.97 trillion by the end of October. Of this, personal and household loans amounting to Sh303.1 billion (36.1 per cent of the gross loans to the sector) had their repayment period extended. For other sectors, a total Sh1,076.9 billion had been restructured mainly to trade (18.7 per cent), manufacturing (22.7 per cent), real estate (14.5 per cent) and agriculture (12.8 per cent). These measures have continued to provide the intended relief to borrowers.
Sh10.9 billion: The value of liquor stocks that beer maker East African Breweries Limited remained with by the end of June 30. The company’s net profits dropped by 39 per cent to Sh7.6 billion, a six-year low, as pubs, nightclubs and other entertainment joints remained closed during this period.
The government also lost a lot of excise taxes, as consumption of alcohol declined.
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