As oil prices hit $100 for the first time since 2014, we compare the economy then and now

During this seven and a half year period, Kenya’s economy has changed dramatically. How? Let’s look.

Kenya, 9th economy in Africa

On October 1, 2014, Kenya was classified as a middle-income country after a statistical reassessment of the economy increased the size by 25.3%.

Kenya effectively became Africa‘s ninth largest economy, rising from 12th place, overtaking Ghana, Tunisia and Ethiopia.

At the time, Kenya became the latest African country to benefit from a rebasing of its economy after Nigeria overtook South Africa to become the continent’s largest economy earlier that year.

Main sectors of the Kenyan economy

As the economy grows and evolves, GDP measures need to be recalculated to account for new sectors that emerge, hence rebasing.

However, Nigeria, South Africa, Egypt, Algeria, Angola, Morocco, Libya and oil-producing Sudan still rank higher than Kenya.

Kenya’s leap to middle-income country status has been largely driven by the agriculture, manufacturing and real estate sectors.

Agriculture contributed the most to Kenya’s GDP with subsidies rising from 24.1% to 25.4%, based on a five-year average calculated for the period between 2009 and 2013.

Manufacturing’s contribution to GDP rose from 9.5% to 11.3%, a jump that can be attributed to the Jubilee administration’s focus on its four-point agenda.

Service sector touted as Kenya’s best bet

Compared to 2014, Kenya currently ranks sixth behind Morocco, Algeria, South Africa, Egypt and Nigeria in a ranking of African countries by GDP.

In 2022, the World Bank has projected that Kenya’s GDP will grow by 4.9%, despite pandemic shocks to the economy as well as the upcoming August 9 general election.

According to the 24and edition of the Kenya Economic Update, the rebound will be led by the services sector as employment conditions and household incomes improve above pre-pandemic levels.

“Kenya is expected to post one of the strongest growth rebounds in the region thanks to diversified sources of growth and sound economic policies and management,” said Keith Hansen, World Bank country director for Kenya.

Hansen added: “However, poverty has increased and the buffers and coping mechanisms of households, businesses and public finances have been depleted.”

The report notes that drought conditions affecting parts of the country are one of the major domestic risk factors that are already causing severe hardship.

“If the drought were to intensify or spread, it would weigh on the short-term economic outlook. Weaker global growth, higher than expected energy prices and tighter external financing conditions are the main external risks. read the report in part.

#LowerFoodPrices social media protest

In January, the country’s headline inflation rate fell slightly for the second month in a row – to 5% – but the prices of food staples such as corn flour and wheat flour, potatoes, vegetables and the fruits continued to increase.

Food inflation for the month of January stood at 9%, meaning many Kenyans struggled to put food on the table.

The Kenya National Bureau of Statistics (KNBS) says that for the poorest households, where food accounts for around 36% of total expenditure, the burden is even higher.

Using the hashtag #lowerfoodprices, Kenyans this week slammed the government for failing to stem rising prices of staple foods which they say have made life unbearable.