Rising Graft Mars a Year of Strong Growth

Peter Leftie

17 May 2011

Nairobi — The standard of living for Kenyans improved last year but corruption got worse, according to official statistics.

More than half a million new jobs were created in the economy and average incomes rose by slightly over Sh1,000, according to the annual economic survey released Tuesday.

The figures showing Kenyans are moderately better off will surprise many families battling high food and fuel prices. This is because the survey, though an important official barometer of welfare, has statistics which are slightly out of date.

Monthly income rose by Sh1,111, putting the income of the average Kenyan at Sh32,844, up from Sh31,733 the previous year. This probably confirms the widening income gap: the minimum wages in Nairobi and other urban areas range between Sh8,364 a month to Sh10,606.

The average income is obtained by adding up all money earned from employment and investment and divided among the workers in the economy.

In 2008, the average monthly earning of a Kenyan stood at Sh30,325, according to the Kenya National Bureau of Statistics which prepares the survey.

The number of corruption cases reported to the Kenya Anti-Corruption Commission rose to 6,018 from 4,473 in 2009.

Releasing the report, Planning minister Wycliffe Oparanya warned of an impending economic crisis if the current population growth is not reversed.

“Among the policy interventions we must put in place is to control our population which is currently dangerous to our economic growth,” Mr Oparanya said.

Most of the new jobs created are in the building and construction, the transport and communication industries. Some were also created in the wholesale and retail trade as well as in hotels and restaurants.

The informal sector alone accounted for 440,000 of the jobs, while 69,000 others became self employed or worked in family enterprises.

“This is attributable to improved economic conditions that prevailed in 2010 coupled with increased access to affordable credit mainly from banks, the Women Enterprise and the Youth Development funds,” Mr Oparanya explained.

The two funds have enabled more women and youth to start or expand their businesses, resulting in more job opportunities to Kenyans.

Loans by the two funds also cushioned thousands of retrenched workers from sinking into poverty, the minister noted.

The improved living standards appear to have contributed to an increase in the birth rate and a decline in the death rate. The birth rate rose from 51.5 per cent in 2009 to 55.1 per cent last year, while the death rate dropped from 48.3 per cent in 2009 to 47.2 per cent.

Favourable weather conditions coupled with government interventions also saw farmers record good yields and higher earnings for their produce compared to the previous two years.

The turnaround in the agricultural sector, from 4.1 per cent and 2.6 per cent in 2008 and 2009 respectively, to 6.3 per cent last year, was attributed to the good weather conditions and policy interventions such as the provision of subsidised fertilizers and seeds.

Maize production rose to 35.8 million bags last year, up from 27 million bags in 2009. Rice production nearly doubled, from 37,000 tonnes in 2009 to 72,000 tonnes last year, while wheat harvest rose from 129,000 tonnes in 2009 to 199,000 tonnes.

In the Energy sector, the number of families connected to the national grid rose to 251,056, up from 205,287 in June 2009.

The government however reduced the money allocated to poor citizens aged 65 and above to enable them attain better standards of living from Sh550 million in 2009 to Sh530 million.

It however increased the monthly cash rations to orphans and other vulnerable children under the Cash Transfer for Orphans and Vulnerable Children programme from Sh815 million to Sh827 million.

The survey also reported considerable growth in the mobile telephony sector, from 17.4 million subscribers in 2009 to 20.1 million subscribers last year.

In the transport sector, fewer 14-seater matatus were registered last year, largely due to the planned phasing out of the vehicles in major towns.

The number of newly registered buses and coaches went up by nearly 20 per cent as Kenyans rushed to cash in on the policy shift.

The function was also attended by Assistant ministers Peter Kenneth (Planning) and Dr Oburu Oginga (Finance).

“We must strengthen policies in youth employment to avoid witnessing what we saw in North African countries recently,” Mr Oparanya said.

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