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President Kenyatta did send billions to Mt Kenya counties, but misled on how much Kenya’s economy has grown under his watch

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President Kenyatta did send billions to Mt Kenya counties, but misled on how much Kenya’s economy has grown under his watch

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28th March 2022

By: Africa Check

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There are no permanent allies or enemies, only permanent interests, the well-travelled saying goes. 

An example of this is the lead up to Kenya’s August 2022 elections. Outgoing president Uhuru Kenyatta is campaigning hard for Raila Odinga, his former fierce rival. 

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On 23 February 2022, Kenyatta was in his political backyard of Mount Kenya to convince his supporters to back Odinga.

In the meeting at the Sagana State Lodge, the president made claims about his legacy, specifically the economy. He also brought in Andrew Wakahiu, the head of the president’s delivery unit, to outline his government’s contributions to the prosperity of the region.  

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“Mount Kenya” refers to a vote-rich political construct of the Kikuyu, Meru and Embu communities, and counties where these communities are the majority.  

There are officially 10 Mount Kenya counties. These are Tharaka-Nithi, Meru, Nyeri, Laikipia, Nakuru, Murang’a, Kiambu, Nyandarua, Embu and Kirinyaga. 

Kenyatta and Wakahiu made several claims. We checked four.

Claim: “Our counties have received KSh500-billion since 2013.”

Verdict: Understated

Wakahiu played up the national government’s work in Mount Kenya. Speaking in the Kikuyu language, he claimed there had been progress in equipping hospitals and building markets, polytechnics and roads. 

Africa Check contacted Wakahiu for the source of their data. He asked us to send an email, but despite several reminders he is yet to respond. We’ll update this report when he does.  

Kenya’s 47 county governments get money from the national government in two ways: 

  • Monthly payouts from the national treasury shared equitably across counties 
  • Conditional grants as set out in the county allocation of revenue act

These funds are called “exchequer issues”. The figures are recorded in monthly treasury bulletins and in the controller of budget’s annual reports.

Kenya’s county governments were established in March 2013. The most recent full financial year ended in June 2021. Between these dates, the data shows, the national government gave KSh535.8-billion (US$4.67-billion) to the 10 Mount Kenya counties.  

Kenya’s financial year runs from 1 July to 30 June of the following year.

For the current financial year, 2021/22, the national government has so far allocated KSh34.6-billion to the 10 counties. 

The total amount of money given to the Mount Kenya counties as of 31 January 2022 is therefore KSh570.4-billion. This figure would have been available to Wakahiu when he made the claim. 

Wakahiu understated the figure, missing a chance to claim even more gains.

Claim: “This is what we are transferring to Mount Kenya region every year now – KSh81-billion every year to our 10 counties.”

Verdict: Correct

Wakahiu said the national government’s annual transfers to the Mount Kenya counties had risen to KSh81-billion, from KSh39-billion when Kenyatta took office in 2013. 

The data shows that over the last three financial years, the 10 counties received an average of KSh81.7-billion. 

The claim is correct.

Claim: “Mount Kenya counties got KSh39-billion in 2013 when Kenyatta took office.”

Verdict: Mostly Correct

The first full financial year under the Kenyatta administration was 2013/14. In that time, the 10 Mount Kenya counties received KSh40.4-billion, according to data from the country’s controller of budget. 

In the three months after Kenyatta’s election in March 2013, the counties got KSh2.5-billion.

Claim: “Kibaki left me an economy worth KSh5-trillion. Today the one I hand over my government to, I will leave an economy worth KSh13-trillion”

Verdict: Misleading

Kenya’s economic performance under Kenyatta continues to be scrutinised. The country’s rising debt is also a source of public concern. The president played up his record by saying he had more than doubled the size of the economy during his tenure. 

“Kibaki left me an economy worth KSh5-trillion. Today the one I hand over my government to, I will leave an economy worth KSh13-trillion,” Kenyatta said in the Kikuyu language. 

Gross domestic product, or GDP, is a widely used measure of the health of an economy. It is the market value of all final goods and services produced in a country in a given period, usually a year.

Kenya’s national statistics office gives the size of the country’s economy as KSh4.7-trillion in 2013. The most recent annual statistics survey provisionally estimates GDP to be KSh10.8-trillion in 2020, a figure also used by the World Bank. 

The national treasury provisionally estimates that GDP will be KSh12.6-trillion in 2022. Kenyatta is set to leave office this year, after serving the constitutional limit of two terms.  

While these numbers appear to support the claim, they only tell half the story.  

First, Kenya’s GDP was rebased twice in the period between 2013 and 2022 – in 2014 and in 2021. This was to account for changes in “new sectors, new products and new technologies, and consumer behaviour and tastes … over time”. 

Dr Abraham Rugo is the Kenya country manager for the International Budget Partnership, a budget transparency think tank. He told Africa Check the rebasing “measures productive elements of the economy that were not measured before”. 

“Not all of it is new growth,” Rugo said. “This is a case where Kenyatta is giving the right numbers in the wrong context. The nuance about the rebasing is missing.”

Africa Check has previously explained the problem with using GDP as a measure of economic progress. (Note: Also see box below.)  

'Think of it as a credit card economy'

Rugo also highlighted the increase in debt. “There has been a lot of economic activity, in building the railway and roads, but a lot of it is funded through borrowed money. Think of it as a credit card economy,” he said, signalling the repayments will put a strain on the economy. 

Prof Charles Wheelan is a senior lecturer at Dartmouth College in the US and author of Naked Statistics, among other works. 

He told Africa Check that ignoring the effect of rebasing and a debt-fuelled economy when discussing GDP numbers gives a partial picture. 

“If [the rebasing] is not taken into account, then the comparison is apples to oranges,” Wheelan said. 

He agreed the brisk increase in debt to fund projects under the Kenyatta administration should also be considered. 

“The indebtedness matters, too; there are plenty of countries that have had debt-fuelled spells of growth only to end up with a fiscal crisis later on when the debt can't be paid off,” Wheelan said. 

In a February 2022 report, Kenya’s national treasury puts the country’s total public debt at KSh8.2-trillion by December 2021. 

How should a president use GDP to show economic progress? 

“Real” GDP, which considers inflation, is a better way to measure economic growth, according to Prof Charles Wheelan, a senior lecturer at Dartmouth College in the US. Naked Statistics is one of his many books.  

President Kenyatta used “nominal” GDP, which ignores changes in inflation and population growth. Both are key factors in calculating GDP. 

Not taking inflation into account usually distorts the value of an economy, John Kinuthia, a senior programmes officer at the International Budget Partnership (IBP), has previously told Africa Check.  

Per capita GDP – total GDP divided by the population– could also be used, said Dr Abraham Rugo, the IBP’s Kenya country manager. But he warned that it created an inaccurate picture, as it downplayed or ignored inequalities in the population.

Kinuthia told Africa Check it was worth looking at the revenue data relative to the GDP, to check if the claimed economic growth was reflected in how much money the government made. 

In 2013, with a GDP of KSh4.7-trillion, government revenues totalled KSh1-trillion, just 21% of GDP.  In 2020 with a GDP of KSh10.8-trillion, the revenues were KSh1.9-trillion, 18% of GDP. 

This means that while the size of the economy was said to have doubled in nominal terms, government revenue shrank. This was perhaps a result of jobless growth – when GDP grows but employment doesn’t – and a debt-fuelled economy, Rugo said. 

An explainer on the International Monetary Fund website says: “When GDP is growing, especially if inflation is not a problem, workers and businesses are generally better off than when it is not.” 

Based on the data and expert insight, we rate the president’s claim as misleading.

Written by Alphonce Shiundu, Kenya editor & Makinia Juma Sylvia, Senior researcher; Africa Check

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