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Economy

Nairobi’s economic output much lower

Jane Kiringai
Chairperson of the Commission on Revenue Allocation (CRA) Jane Kiringai. FILE PHOTO | NMG 

The new study by the Kenya National Bureau of Statistics (KNBS) on economic performance of the 47 counties has dispelled the long held notion that Nairobi contributes more than half of Kenya’s annual economic output, also known as gross domestic product (GDP).

While Nairobi County’s contribution to the GDP stands at 21.7 per cent, according to the report, the contribution is far lower than had been widely perceived.

Earlier estimates had put the capital’s contribution to national wealth at more than 60 per cent.

“The new report has shattered several myths. We now know that Nairobi does not contribute over 60 per cent of the country’s GDP,” said the chairperson of the Commission on Revenue Allocation (CRA) Jane Kiringai.

She called for a rethink of the country’s revenue sharing formula between the national government and the counties and within the counties.

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The notion that the capital governed by Mike Sonko generates the most to Kenya’s wealth has often been cemented by reports that have characterised Nairobi as the region’s hub for economic activity with a bustling real estate and financial services sectors.

“Counties that are largely dominated by urban centres notably Nairobi City and Mombasa, have had their shares of GCP (gross county product) consistently decline over the period, mostly due to growth in agriculture’s contribution to gross domestic product,” says the KNBS report.

“On the other hand counties with strong presence of agricultural activities, particularly horticulture have consistently improved their share of the GCP over the period (2013-2017).”

A September 2018 report by the New World Wealth saw Nairobi emerge number one as East Africa’s wealthiest city and the sixth in Africa after Durban, Cape Town, Cairo, Lagos and Johannesburg.

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