Kenyan Economy in Recession as PR on Performance Goes into Overdrive

By Steve Biko Wafula / November 1, 2016 | 1:16 pm




Most of us have a difficult time deciphering the business language that our journalists throw at us. We don’t understand how the markets work. We don’t get how the trading at the NSE is done. We don’t comprehend what the numbers mean when institutions like World Bank tell us that by 2018, our economy will be growing by 6.3%. Most of are okay being guided and led and ruled under the guise of ignorance bliss as we struggle to pay bills, pay debts, meet our financial obligations.

World Bank, Bloomberg have praised Kenya as the beacon of hope in sub-Saharan Africa in terms of economic growth and trade balance. The numbers have been shared. The projections have been done and everyone is happy. Everyone here meaning those in leadership with a 7-figure salary. As an entrepreneur with over 10 employees, my views and perceptions are somehow different from the rosy picture being painted.

Most will think I am anti-jubilee. Many will say I have been bought by CORD but the truth is, I am suffering like I have no other means of growth or survival. If then, my status is tough, what about the rest of us? What about my staff? I belong to a group of local entrepreneurs, where we number over 5000 and I am the only one who has not yet laid off anyone. Its tough out there but they say the numbers are good and our economy is doing very well.

job-losses-in-kenya

There are eight indicators that economists’ world over use to measure the stability of the economy and see if its growing or not. In Kenya, we seen to depend on World Bank, IMF and Bloomberg to tell us what’s happening instead of looking at the critical numbers collected by the KNBS. I would trust KNBS over any other institution when it comes to data on our economy and this is something that our dear government needs to look at.

GDP measures the level of economic activity within an economy of a country and from a Kenya’s perspective, the only key economic activity is the high import of steel for the SGR, mega scandals and key brands shutting down. We have over 30 brands that have laid off staff and more in the process of doing so to reduce costs of operations, consolidate in order to compete better, and some have fallen by the wayside due to slowness to adapt to the fast-changing technological advancement.

We are creating jobs via gambling firms while real brands in manufacturing and agriculture are shutting down or relocating. Is our economy well? Is it sound? Our debt levels are extremely high and unsustainable.

Examples of these brands that have led to over 25,000 loss of high end jobs in the last 4 years are;

To make matters worse, a report done by KNBS indicates that over 2.5M SMEs have shut down in the past 4 years. These are reported SMEs with records and the number could be high. Reason for this closure is a myriad of reasons ranging from over-regulation, lack of payment for work done for big brands by SMEs, copy cats hence stiff competition for limited customers and disruption of various sectors by advancement in tech apps.

Assuming each closed SME had an average of 5 employees, this translates to over 12,500,000 job losses in the last 4 years alone. This means we are losing an average of 3,125,000 jobs a year against a backdrop of 800,000 that Jubilee says we are creating per year. So, is our economy healthy really?

steve-biko-wafula

The other measure that we use to tell if the economy is well is the CPI (The Consumer Price Index) which measures the current price levels for goods and services that Kenyans buy. For the month of October, the inflation % was higher than the previous month due to increasing food prices meaning life is very expensive for ordinary folks. The interesting bit is that, this is the only measure that we seem to release diligently every month. I guess, because few understand what it measures and its implications.

The unemployment rate measures the percentage of workers within the total labour force who don’t have a job but who have looked for work in the past 4 weeks and are available for work. This is the one measure that the Jubilee Govt has refused to release since they took power except for the former CS of Devolution who mentioned how many jobs they have created since they assumed power. She never touched on the rate of unemployment which currently stands at over 48%.

Trade deficit measures the difference between the value of a nations imported and exported goods. When exports exceed imports, the country is running a trade surplus and this is an alien concept for Kenya because I don’t recall the last time we ever had a trade surplus. We are basically an import country in every sense of the word.     

The above few measures give you a clear perception of how our economy is doing. Question is, is the PR machinery forgetting something as they push how well the economy is growing well? When the biggest employer in the country is the security sector employing over 400,000 askaris, that should tell you something. With the retail sector reeling under disruptive technologies, poor management, stiff competition and over bearing regulation, what will happen to the millions they employ? What will happen to the manufacturers?

I hope you can see through the smoke screens and tell for yourself what you think about the economy.

Related: Economy in Focus: Nigeria Goes into Recession, Will Africa Suffer?

 





About Steve Biko Wafula

Steve Biko is the CEO OF Soko Directory and the founder of Hidalgo Group of Companies. Steve is currently developing his career in law, finance, entrepreneurship and digital consultancy; and has been implementing consultancy assignments for client organizations comprising of trainings besides capacity building in entrepreneurial matters.He can be reached on: +254 20 510 1124 or Email: info@sokodirectory.com

View other posts by Steve Biko Wafula


More Articles From This Author







Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (336)
  • June 2020 (329)
  • July 2020 (91)
  • 2019
  • January 2019 (253)
  • February 2019 (216)
  • March 2019 (285)
  • April 2019 (254)
  • May 2019 (272)
  • June 2019 (251)
  • July 2019 (338)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (320)
  • 2018
  • January 2018 (291)
  • February 2018 (219)
  • March 2018 (278)
  • April 2018 (225)
  • May 2018 (238)
  • June 2018 (178)
  • July 2018 (256)
  • August 2018 (249)
  • September 2018 (256)
  • October 2018 (287)
  • November 2018 (284)
  • December 2018 (185)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (190)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (165)
  • February 2016 (165)
  • March 2016 (190)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (248)
  • September 2016 (234)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (166)
  • April 2015 (108)
  • May 2015 (116)
  • June 2015 (120)
  • July 2015 (148)
  • August 2015 (157)
  • September 2015 (188)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (207)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950