Economy

Central Bank faults KNBS on agriculture growth numbers

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The Central bank of Kenya, Nairobi on Sunday, November 22, 2020. PHOTO | DENNIS ONSONGO | NMG

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Summary

  • Data from the Kenya National Bureau of Statistics (KNBS) shows that agriculture lagged by a wide margin the performance of other sectors of the economy last year.
  • In the first three quarters of the year, the sector recorded negative growth of 0.1 percent, 0.7 percent and 1.8 percent respectively, with estimates showing a further contraction of 1.3 percent in the last quarter of the year.
  • In 2022, the CBK projects that the agriculture sector will grow by 6.3 percent.

The Central Bank of Kenya (CBK) has flagged the reported economic performance of the agriculture sector for 2021, casting doubts on the numbers that show the sector contracted by an estimated 0.9 percent.

Data from the Kenya National Bureau of Statistics (KNBS) shows that agriculture lagged by a wide margin the performance of other sectors of the economy last year, attributed to erratic weather conditions in the key food growing areas.

In the first three quarters of the year, the sector recorded negative growth of 0.1 percent, 0.7 percent and 1.8 percent respectively, with estimates showing a further contraction of 1.3 percent in the last quarter of the year.

While admitting that the low growth numbers might be due to a high base effect—where a sector is coming from a stellar performance in the previous year— CBK governor Patrick Njoroge flagged the poor performance on concerns about data quality and expects it to be revised.

“2020 was a very good year for agriculture, but beyond that, there is some concern about the numbers. It is true that we had some unfavourable weather conditions such as uneven rain in the food growing areas…but this also points to some data issues,” said Dr Njoroge.

“We are working with the KNBS and the Ministry of Agriculture, which is the principal source of some of the numbers. We flag that and wouldn’t be surprised if this is revised once better numbers are provided.”

Overall, the CBK estimates that the economy grew by eight percent last year—compared to a contraction of 0.3 percent in 2020—buoyed by a strong recovery in sectors such as hospitality, education and services which had been the worst hit by Covid-19 in 2020.

A positive review of the performance of the agriculture sector would boost this overall performance, given the large share of the sector in contributing to overall GDP.

The sector accounts for 23 percent of Kenya’s GDP, making it the single largest contributor ahead of transport and storage at 10.8 percent and real estate at 9.3 percent.

In 2022, the CBK projects that the agriculture sector will grow by 6.3 percent.

This is the second time the CBK is differing with the KNBS over agriculture sector performance, having earlier done so over the first half of 2020 growth numbers.

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