I was slightly depressed after reading the highlights of the 2013 Kenya Economic Survey (pdf). Almost all topics we discuss in this blog, like employment, wages, industrial development and balance of trade, do not look good. Here are some highlights of the highlights:
Industrial development: not really happening
The manufacturing Sector decelerated from an expansion 3.4 per cent in 2011 to a growth rate of 3.1 per cent in 2012. The slower growth was due to high cost of production, stiff competition from imported goods, high cost of credit and political uncertainty due to the 2013 General Elections
Employment: 90 percent of new jobs are informal. Wages are falling
- The labour market recorded 659.4 thousand new jobs in 2012, 89.7 percent of them were in the informal sector representing an increase of 5.5 per cent.
- Real average wages declined by 4.8 per cent due to inflation.
- The creation of new jobs in the “modern sector” declined from 74.2 thousands in 2011 to 68.0 thousand in 2012.
International trade: a growing deficit
- Kenya’s trade balance worsened further by 8.7 per cent in 2012 compared to 46.7 per cent in 2011
- The current account deteriorated to a deficit of KSh359.5 billion in 2012 from a deficit of 340.2 billion in 2011.
There are not only bad news in the report, for example there has been increased job creation in the construction sector, ICT industries as well as the education and health activities. And inflation has gone down, which is very good news for the lower income population. But that’s not enough for sustained economic growth over the long term.
Tourism has gone down too by the way. More here