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DR DANIEL MUTEGI GITI: We are in economic crisis which we can manoeuver if we handle it well

The Economic Survey 2023 has finally been released by the Kenya National Bureau of Statistics (KNBS). It shows that we need to keep growing and nurturing our economy. The survey also shows that Kenyan economy measured through the Gross Domestic Product (GDP) grew by 4.8 percent in 2022 from a GDP growth rate of 7.6 percent in 2021. 
Treasury Cabinet Secretary Prof Njuguna Ndung'u. Kenya is facing myriad economic challenges ranging from debt, unemployment and poverty./STATE HOUSE KENYA

KNBS in collaboration with Counties also produces the County Gross Domestic Product (CGDP), which in 2021 showed that only Meru County contribution the GDP was above 3.2 percent and the other counties in the region were within the range of 3.2 percent and below, while Nairobi was at 27.5 percent and Machakos was at 3.5 percent. 

GDP is the widely used measure of economic development and growth globally. This is despite different stakeholders and scholars have of course advocated for more inclusive measures of the economic growth and development. In this class are persons that advocate for use of the Human Development Index (HDI) which focuses on people in a country and their capabilities and dwells on measures like on health, education and standards of living. Others advocate for use of Better Life Index (BLI) focusing on people and their well-being; and also, others want us to use the Genuine Progress Indicator, which focuses on cost and benefits trade-offs of economic development.  

The Economic Survey also shows that the economy's total value of goods and services was Kenya shillings 13.368 trillion. Kenya isn’t alone in the global economic growth slowdown as evidenced by the fact that the global economy grew by 3.4 per cent in 2022 compared to 6.0 percent in 2021. It means that our GDP has been growing above the global average, where in 2021, it was above with 1.6 per cent and in 2022, it was 1.4 per cent. 

It also means that we have a resilient economy that needs to be nurtured further by examining areas and sectors that can enhance more growth. The ongoing debates on the cost of living, the shortage of the dollar, the limited job opportunities facing many households and young people should not lead to any despair. We are in some crisis yes, but it does not spell doom if we handle it well. 

The word crisis in Chinese language has two components and meanings for that matter– on one side, the word spells and means danger, while on the other, it means and spells opportunity. This means that in every crisis, there is a chance for opportunity and danger. Counties and the Nation should therefore make the right choices and growth trajectories going forward. One major crisis that nations and countries face is the global and national economic and financial crises, which points to the likelihood of another financial depression/crisis. This will join the list of other great depressions that took place in 1930’s and 2007/2008, which also has the same impacts that arose from the 2020/2021 COVID 19 pandemic disruptions and economic downturns. Ecclesiastes 1:9 is instructive here …. there is nothing new under the sun. It is important to learn from others in dealing with issues that come up in counties and countries. 

The US under President Franklin D. Roosevelt faced the wraths of the 1930’s Depression and as such was in a crisis. The president and the government tapped onto the opportunity side of the crisis and developed the “New Deal” plan that was operationalized between 1933 to 1939. The New Deal was a set of programmes and projects, public works, financial reforms and regulations that supported farmers, elderly, youth and other unemployed persons. These programmes focused on three R’s, where the first “R” focused, and should focus for Kenya on the measures and programmes that would bring Relief to the unemployed and the poor who are mostly affected by such economic and financial crisis since they belong to the marginal social grouping. Such persons are marginalized and vulnerable to the economic and financial shocks and need the assistance of the public sector in crisis times.

The second “R” focused and should be the same for Kenya and its counties is the Recovery of the economy back to normal. 

The third “R” was and is true for Kenya and its counties on the need for reforming the economy to avoid Recurrence of the depression and financial crisis for our case. 

The first economic reform which our counties should do is on agricultural potential revival because agriculture is devolved according to the fourth schedule part II of the Kenyan Constitution 2010. This is because the Economic Survey 2023 has indicated that the agricultural sector declined from negative 0.3 per cent in 2021 to negative 1.9 percent in 2022. At the same time, production of key crops declined example tea from 537.8 thousand tonnes in 2021 to 535.0 thousand tonnes in 2022, Maize from 36.7 million bags in 2021 to 34.3 million bags in 2022; and wheat from 245.3 thousand tonnes in 2021 to 191.0 thousand tonnes in 2022. 

Maize and wheat and related products which are consumed by a majority of Kenyans. The need for agricultural revival is that it employs a majority of our people - 40 per cent of the total population and 70 per cent of the rural population. 

Three successes of the New Deal were – first, it put people back to work and hence revived the economic fortunes of the country. Secondly, it restored faith in the American financial system and it can do the same for the great financial and economic prowess for Kenya and its counties. Three, it restored the hope and survival of the people and the same is true for Kenya and its counties.

In Esther 4:14 we see Mordecai telling Esther, “…You are in the kingdom for such a time as this….”. Every leader is in a position they are in now for such a time as this when economic revival and development is needed from the county to the nation. 


Dr. Mutegi Giti is Urban Management, Public Private Partnerships (PPPs) & Environment Specialist.
Twitter: @DanielGiti.

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