CEIC News@lert: Recalculation of Kenya’s National Accounts Data

October 31, 2014 HIGHLIGHTS Following the revision of Nigeria’s national accounts statistics, which was covered in a special CEIC News@lert in April this year, Kenya has now followed suit. The Kenya National Bureau of Statistics (KNBS) released its rebased gross domestic product (GDP) statistics on September 30, 2014. The new compilation is based on the latest version of the international statistics standard System of National Accounts (SNA) 2008, replacing the old standard SNA 1993. The base year of the data has also been changed from 2001 to 2009. Both measures were undertaken in order to provide a more comprehensive and up-to-date picture of the Kenyan economy, taking into account recent changes in the economic structure of the country. Under the new reclassification, Kenya’s GDP output at current prices was KES 4,757.5 billion (USD 55.2 billion) in 2013, which represents a 25.3% increase from the previous figure reported under the old standard. The revision also affects the seasonally-adjusted real GDP values and therefore the growth rate of the economy. After the revision the annual real growth rate in 2013, based on 2009 prices, is now 5.7% compared to 4.7% under the old methodology. The revised GDP values provide a better representation of the economy and capture the growing key sectors such as agriculture, manufacturing, transport, information and communication technologies (ICT), and real estate. These four sectors have experienced the most notable developments over the years and their contribution to national output was under-estimated using the old GDP classification system. The agriculture and forestry industry, now combined with fishing, comprised KES 1,249.7 billion in 2013, making it the largest sector. This represents an increase of 27.6% compared to the value under the old classification. However, the share of agriculture in the total economy remains relatively unchanged at 25-26% of GDP. Manufacturing also marked a substantial increase of 46.7% after the reclassification and now represents 10.4% of the economy compared to 8.9% under the old methodology. Other major changes stem from emerging sectors such as real estate, which has grown by 140%, and ICT, which is now a stand-alone sector comprising 1.4% of the economy in 2013. The recent reassessments of GDP data in Sub-Saharan Africa, first in Nigeria and now in Kenya, reveal the determination to provide a better presentation of the national accounts data. In these countries the recalculation has resulted in a huge positive difference in GDP values, thus boosting their image among international investors. The obvious advantages that a reassessment of the national accounts can bring may act as an incentive for other Sub-Saharan states to also recalculate their GDP data. Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. Back to Blog
31st October 2014 CEIC News@lert: Recalculation of Kenya’s National Accounts Data

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