Kenya’s economy shrinks by 0.3pc in year of Covid-19 pandemic

National Treasury and Ministry of Planning Cabinet Secretary Ukur Yatani during launch of the 2021 Economic Survey Report on September 9, 2021/Daily Nation Jeff Angote.

By Daily Nation

Kenya’s economy contracted by 0.3 per cent in 2020 compared to a 5 per cent growth in 2019, as it took a hit from the Covid-19 pandemic.

The Economic Survey 2021 released on Thursday shows that accommodation and food serving activities, education, and professional and administrative service activities recorded significant declines in 2020. This comes at a time when Kenya rebased its economy in a move that has seen the economy expand to Sh10.753 trillion in 2020 compared to Sh10.256 trillion in 2019.


The report says that employment in the various sectors of the economy was adversely affected by containment measures instituted to curb the spread of Covid-19. Most employment (83 per cent) was in the informal sector. A total of 2.9 million jobs were reported in the formal sector, the report says.

The total employment outside small-scale agriculture and pastoralist activities contracted by 4.1 per cent to 17.4 million in 2020. Agriculture was among the best preforming sectors of the economy in 2020 after it recorded a growth of 4.6 per cent, mainly driven by tea and sugarcane sectors.

“This was mainly as a result of increased production of tea and food crops such as beans, rice, sorghum and millet,” Treasury Cabinet Secretary Ukur Yatani said as he released the report on Thursday.

The CS said there was need to balance timeliness of the report and accuracy as he apologised to stakeholders for a four-month delay. Here are key highlights of the survey:

Agriculture, forestry and fishing real value added growth accelerated to 4.8 per cent in 2020. Wage employment in private sector declined. Wage employment in public sector increased. Informal sector employment contracted.

A total of 2.9 million jobs reported in the formal sector in 2020.

Manufacturing sector declined. Credit advanced to the sector rose by 11.8 per cent to Sh80.5 billion, Construction sector recorded a growth of 11.8 per cent compared to 5.6 per cent growth in 2019, Cement consumption increased in the year under review.

Earnings from Tourism declined by 43.9 per cent to Sh91.7 billion, Performance of Transport and Storage sector was affected by Covid containment measures. Volume of commercial cargo traffic handled decreased by 8.9 per cent.

ICT sector grew by 4.8 per cent owing to increase in mobile money transactions and use of ICT to facilitate out-of-school learning