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How Kenya's economy performed in 2021, survey shows

BUSINESS
By Winfrey Owino | May 5th 2022 | 3 min read
By Winfrey Owino | May 5th 2022
BUSINESS
The Kenya National Bureau of Statistics says the country's economy grew by 7.5 per cent in 2021. [File, Standard]

Kenya’s economy rebounded in 2021 compared to 2020, with most sectors recording significant improvement.

The 2022 Economic Survey shows that the country’s Gross Domestic Product (GDP) leap-bounded from a negative 0.3 per cent in 2020 to 7.5 per cent in 2021.

The GDP refers to the total market value of goods and services produced by a country’s economy during a specified period of time.

The Kenya National Bureau of Statistics (KNBS) attributes the growth in Kenya’s economy to the lifting of Covid-19 restrictions and a conducive micro-environment.

The Director-General of KNBS George Obudho projected that in the 2021-2022 Financial Year, Kenya would collect Sh2.1 trillion in revenue, with taxes accounting for more than 80 per cent of that figure.

“The economy is estimated to have expanded by 7.5 per cent in 2021 compared to a contraction of 0.3 per cent in 2020,” Obudho said during the launch of the 2022 Economic Survey Report at the Kenyatta International Convention Centre (KICC) in Nairobi.

The 2021 rebound in GDP marks the highest one-year growth that the country has recorded in the last five years.

In 2017, for instance, the growth rate was 3.85 per cent; in 2018, it was 5.65 per cent; in 2019, it, however, contracted by 0.5 per cent to 5.1 per cent.

Kenya, as per the report, also exported more goods in 2021 than in 2020. In 2021, goods exported were worth Sh743.7 billion compared to Sh643.7 billion the previous year.

Kenya’s leading exports were horticulture (Sh165.7 billion); tea (Sh130.9 billion); textile (Sh42.7 billion) and coffee (Sh26.1 billion).

At the same time, Kenya imported more goods in 2021 than it did in 2020. The value of imports rose to Sh2.15 trillion in 2021 compared to Sh1.64 trillion the previous year.

Petroleum products, including super petrol, diesel and jet fuel, accounted for the highest import value at Sh335.3 billion. The KNBS said petroleum product imports rose by 12 per cent to 6.4 million tonnes in 2021.

Other top imports include industrial machines (Sh254.8 billion), iron sheets (Sh155 billion) and animal and vegetable oils (Sh120.8 billion).

The Agriculture sector, however, posted dismal performance in 2021, contracting to a negative 0.2 per cent from 5.2 per cent in 2020. The decline was attributed to poor rainfall and poor harvest of tea, maize, wheat and coffee.

Despite the drop, the Agriculture sector continued to play an important role in Kenya’s economy, contributing 22.4 per cent of the country’s total GDP in 2021.

The service sector contributed more than half of Kenya’s GDP in 2021 (52.4 per cent).

Under the service sector, transport and storage accounted for 11.4 per cent; real estate (8.9 per cent); repairs, wholesale and retail trade (7.9 per cent) and other services (24.2 per cent).

Taxes, which are a key revenue generator for the government, accounted for 8.2 per cent of the GDP in 2021.

Kenya’s inflation rate rose to 6.1 per cent in 2021, the highest since 2018. In 2020, the inflation rate stood at 5.4 per cent.

Kenya’s currency, the shilling, 2021 traded at an average of Sh109.70, compared to Sh106.50 in 2020.

In 2021, the number of jobs in the public sector rose to 923,075 from 884,600 the previous year. In the private sector, jobs stood at 1.9 million in 2021, compared to 1.8 million in 2020.

The increase in the number of jobs points to a gradually recovering economy, said the national bureau of statistics.

“Relaxation of various Covid-19 containment measures coupled with the roll-out of Covid-19 vaccination had a positive impact on economic activities, resulting to decline in unemployment,” said KNBS boss Obudho.

The tourism sector rebounded in 2021, posting a 50.3 per cent growth; in 2021, Kenya had 1.5 million foreign tourists compared to 1 million the previous year.

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