Lensa Omune (IFPRI)
Kenya is a dynamic country and experienced rapid economic, social, and political changes over the past decade. Over the period 2009-2019, the economy grew at 5.5% per year on average and the national poverty rate declined from 46.6% in 2005/06 to 36.1% in 2015/16 (KNBS,2018; KIHBS 2015/16). Kenya’s policy landscape has also evolved over the last decade, as the government is implementing Vision 2030 through successive five-year Medium-Term plans (MTPs). These MTPs outline policies, programmes and projects designed to transform Kenya into an industrialized middle-income country offering high quality of life to all the citizens. Currently, the government is implementing its third MTP, which prioritizes the implementation of the Big 4 initiatives with the aim of increasing the manufacturing sector’s contribution to GDP from 9.2% as it was in 2015 to 15% by 2022,and increasing the share of total agricultural production that goes for agro-processing from 16% to 50% by the end of the plan; construction of at least 500,000 affordable houses across the counties; enhancing food and nutrition security through investments in irrigation, affordable inputs, and development of blue economy; and achieving 100% universal health coverage.
As the third MTP comes to an end in 2022, data and evidence-based decision making are key for designing and implementing new policies and investment plans to overcome continued challenges. For instance, Comprehensive Poverty Report 2020 for Kenya shows that more than half (53%) of the population or 23.4 million Kenyans are multidimensionally poor, while 36% of the population or 15.9 million are monetary poor. On the other hand, latest statistics on unemployment also shows a rate of 6.6 per cent in the first quarter of 2021, compared to 5.2 per cent registered in the first quarter of 2020(KNBS,2021). This is an indication that the number of poor and people without jobs are likely to further increase due to recent and ongoing shocks such as the COVID-19 pandemic, drought in the Northern, Eastern, and coastal regions, and the 2019/20 desert locust invasion in the Northern, Eastern, and central Kenya.
The International Food Policy Research Institute (IFPRI) Nexus Social Accounting Matrices (SAM) constructed by (Thurlow, 2021) provides a consistent data framework that captures the detailed socio-economic structure of Kenya to assess the impact of shocks and policy options for future MTPs and investment plans. The advantage of IFPRI’s Nexus SAM structure is that it provides a consistent, detailed, complete, updated, and comparable framework across countries. IFPRI in collaboration with both national and international partners have made great efforts over the past years to ensure such standardization in the construction and updating of SAMs, thus enabling a more robust cross-country comparisons of national socio- economic structure, especially agriculture-food systems.
The Kenya nexus SAM for the calendar year 2019 is available for download and use by national and international researchers and policy analysts. The SAM identifies 42 production activities across agriculture, industry, and services sectors. It also includes three broad categories of production factors (labour, land, and capital), whereas labour is further disaggregated across three educational attainment levels (low, medium, and high); representative households are differentiated by rural and urban location and expenditure quintiles. The SAM also includes enterprises, tax accounts, the government; a saving-investment account, and the rest of the world.
The 2019 SAM itself provides important insights into the structure of the Kenyan economy as described in the documentation As an example, Figure 1 below presents key highlights of the production and external trade structure in Kenya for the year 2019. The services sector accounted for the highest contribution to GDP at 45.2%, followed by agriculture at 37% and industry with 17.8%. Industry sector’s imports has the highest import share (83.5%), whereas the agriculture sector has the lowest share of imports to total imports (4.3%). The services sector has the highest export share (43.3%), while the industry sector has the lowest share of exports (26.0%) to total exports.
The SAM also provides important insights into distributional aspects of household incomes and expenditures (Table 1). Urban households have higher per capita consumption and total spending than the rural households. Rural households have the highest food share (75.1%) of their consumption spending and the lowest saving rate (9.4%). Conversely, urban households have the lowest food share (51.0%) of their consumption spending with the highest savings rate (24.1%).
Table1: Key highlights for annual consumption and total spending among households.
| Consumption spending | Total spending | ||||
| Share of total (%) | Per capita (1000 shillings) | Food share (%) | Per capita (1000 shillings) | Savings rate (%) | |
| Rural households | 55.3 | 1,041 | 75.1 | 1,158 | 9.4 |
| Urban households | 44.7 | 2,077 | 51 | 2,919 | 24.1 |
Source: James Thurlow
Note: Consumption spending is household spending only on goods and services while total spending is consumption spending plus taxes, savings, and outward remittances
Next steps
As the next steps for SAM construction in Kenya, IFPRI will increase its collaboration with national institutions such as Kenya National Bureau of statistics (KNBS), Kenya Institute of Public Policy Research and Analysis (KIPPRA) and others in the construction and updating of SAM. In this process, the team will use the updated information such as the supply and use tables for the year 2016, updated 2019 housing and population data, and other new data as they become available. Given Kenya’s devolved political structure, the team also aims to build a SAM that captures the socio-economic structures at county or county cluster levels.
[1] Thurlow, James. 2021. 2019 Social Accounting Matrix for Kenya: A Nexus Project SAM. Data Paper. Washington, DC: International Food Policy Research Institute (IFPRI). https://doi.org/10.2499/p15738coll2.134819
[2] 2019 Kenya SAM; https://ebrary.ifpri.org/utils/getfile/collection/p15738coll2/id/134819/filename/135022.pdf
[3]IFPRI training material; https://www.ifpri.org/publication/social-accounting-matrices-and-multiplier-analysis
[4] 2019 SAM documentation ; https://ebrary.ifpri.org/utils/getfile/collection/p15738coll2/id/134819/filename/135022.pdf
