Aiming High: Securing Education to Sustain the Recovery © 2022. World Bank Group This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank Group encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. 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TABLE OF CONTENTS ABBREVIATIONS ............................................................................................................................................................................................................................................................. i ACKNOWLEDGEMENTS............................................................................................................................................................................................................................................. ii EXECUTIVE SUMMARY................................................................................................................................................................................................................................................ iii THE STATE OF KENYA’S ECONOMY 1. Recent Economic Developments and Outlook ....................................................................................................................................................... 2 1.1. The global and regional economic recovery from the pandemic is slowing in the face of multiple pressures, including the invasion of Ukraine ............................................................................................................................................................................................................................ 2 1.2. The Kenyan economy rebounded in 2021 despite a contraction in agricultural output............................................................................... 2 1.3. Monetary policy has been tightened in response to emerging inflationary pressures .................................................................................. 4 1.4. The current account deficit is widening following the surge in commodity prices ......................................................................................... 7 1.5. A rebalance in government expenditure and a recovery in revenue enabled continued response to the pandemic............... 8 2. Outlook and Risks.............................................................................................................................................................................................................. 9 2.1. The economic outlook remains highly uncertain and risks to the forecasts are elevated............................................................................. 9 2.2. Uncertainty as to the outlook is elevated by existing and new downside risks .................................................................................................. 11 SPECIAL FOCUS 3. Education Spending and Priorities after COVID-19............................................................................................................................................... 14 3.1. Main challenges remaining in the education sector.............................................................................................................................................................. 18 3.2. COVID-19 impact ......................................................................................................................................................................................................................................... 23 3.3. Improving education financing to support reforms and address remaining challenges............................................................................... 24 REFERENCES ....................................................................................................................................................................................................................................................................... 28 ANNEX TABLES.................................................................................................................................................................................................................................................................. 29 LIST OF TABLES Table 1: Medium term growth projections............................................................................................................................................................................................... 10 Table 2: Gross domestic product by activity, growth rates............................................................................................................................................................. 11 Table 3: 12-month cumulative balance of payments........................................................................................................................................................................ 12 Table 4: Kenya - Fiscal operations (percent of GDP)............................................................................................................................................................................ 13 LIST OF FIGURES Figure 1: Confirmed new cases and deaths have plummeted since the end of the Omicron wave ................................................................... 3 Figure 2: Private consumption and investment were the major contributors to growth............................................................................................. 3 Figure 3: Transport equipment led the surge in investment (contribution to investment growth)...................................................................... 3 Figure 4: Services drove the economic recovery in 2021 (contribution to real GDP growth, percentage points)........................................ 4 Figure 5: …but with dispersion within subsectors (real value added in 2021 indexed at 2019=100).................................................................. 4 Figure 6: Headline inflation remains within the CBK band............................................................................................................................................................... 5 Figure 7: Food inflation has picked up.......................................................................................................................................................................................................... 5 Figure 8: Domestic fuel prices inflation has picked up in recent months…......................................................................................................................... 5 Figure 9: …as domestic retail fuel prices have recently been increased due to higher global market prices ............................................... 5 Figure 10: Tourist arrivals have increased considerably but remain below pre-COVID levels (number)................................................................ 7 Figure 11: The nominal and real effective exchange rates have recently been on a depreciating trend, facilitating economic adjustment to global shocks (an increase indicates depreciation)......................................................................................................................... 8 Figure 12: The recent increased uptake of concessional borrowing has reduced the share of commercial debt.......................................... 9 Figure 13: Summary of recommendations................................................................................................................................................................................................ 16 Figure 14: Trends in gross enrollment rates, 2012-2019.................................................................................................................................................................... 17 Figure 15: Pupils passing minimum proficiency threshold scores in class 3, 2016-18................................................................................................... 17 Figure 16: Learning adjusted years of schooling and GDP per capita, 2020 ....................................................................................................................... 17 Figure 17: Government expenditure on education as a share of GDP and TGE, 2020................................................................................................... 18 Figure 18: Government expenditure on education, total (% of GDP), 2019......................................................................................................................... 18 Figure 19: Survival rates in primary and secondary education, 2020........................................................................................................................................ 18 Figure 20: Students reaching minimum competency level, by subject and grade, 2018-19.................................................................................... 18 Figure 21: Learning Adjusted Years of Education by county, 2020............................................................................................................................................. 19 Figure 22: Map of Learning Adjusted Years of Education by county, 2020........................................................................................................................... 19 Figure 23: Learning outcomes decomposition for Grade 7 and Form 2................................................................................................................................. 20 Figure 24: Rate of non-enrollment by age and gender..................................................................................................................................................................... 20 Figure 25: Percentage difference in the share of students meeting minimum learning standards by gender, subject and grade 21 Figure 26: Average student to teacher ratios and teacher to classroom ratio by county, 2019............................................................................... 22 Figure 27: Student to teacher ratios and learning outcomes, 2019........................................................................................................................................... 22 Figure 28: Total amount of capitation grants, 2017-2021................................................................................................................................................................. 23 Figure 29: Share of students by level of proficiency, 2019-20........................................................................................................................................................ 24 LIST OF BOXES Box 1: The impact of global commodity price shocks on Kenya’s inflation rate.......................................................................................... ������������ 6 Box 2: Households' continued recovery from the COVID-19 pandemic and coping mechanisms...................................................................... 14 ABBREVIATIONS AIDS Acquired Immunodeficiency Syndrome KNBS Kenya National Bureau of Statistics ASAL Arid and Semi-Arid Lands LAYS Learning Adjusted Years of Education CDF Constituency Development Fund MLA Monitoring Learner Achievement CBC Competency Based Curriculum MoE Ministry of Education CBK Central Bank of Kenya MPC Monetary Policy Committee COVID-19 Coronavirus Disease of 2019 NASMLA National Assessment System for Monitoring Learning Achievement CPI Consumer Price Index NER Net Enrolment Rate DSA Debt Sustainability Analysis NPLs Non-Performing Loans DSSI Debt Service Suspension Initiative PER Public Expenditure Review ECF Extended Credit Facility PFM Public Financial Management EFF Extended Fund Facility PIM Public Investment Management EGMA Early Grade Mathematics Assessment PMI Purchasing Managers’ Index EPRA Energy and Petroleum Regulatory Authority RBF Results Based Financing EYS Expected Years of School SAGA Semi-Autonomous Government Agencies FDI Foreign Direct Investment SDR Special Drawing Rights FY Financial Year STEM Science, Technology, Engineering and Math GDP Gross Domestic Product STR Student Teacher Ratio GER Gross Enrolment Rate TARL Teaching at the Right Level GoK Government of Kenya TGE Total Government Expenditure H1 First Half TSC Teachers Service Commission H2 Second Half Q1 First Quarter HCI Human Capital Index Q2 Second Quarter HIV Human Immunodeficiency Virus Q3 Third Quarter ICT Information and Communications Technology Q4 Fourth Quarter IDA International Development Association SSA Sub-Saharan Africa IFMIS Integrated Financial Management TVET Technical and Vocation Education Information System and Training IMF International Monetary Fund US United States IPC Integrated food security Phase USD United States dollar Classification WTI West Texas Intermediate KCSE Kenya Certificate of Secondary Education VAT Value-added tax KEU Kenya Economic Update y/y Year-on-Year KES Kenyan Shilling June 2022 | Edition No. 25 i ACKNOWLEDGEMENTS The Kenya Economic Update (KEU) is a World Bank report series produced twice a year that assesses recent economic and social developments and prospects in Kenya, and places these in a longer-term and global context. Through special topics, the KEU also examines selected policy issues and medium-term development challenges in Kenya. It is intended for a wide audience, including policymakers, business leaders, financial market participants, and the community of analysts and professionals engaged in Kenya’s changing economy. The production of the KEU is led by the Macroeconomics, Trade and Investment (MTI) Global Practice team for Kenya. Part 1 (Recent Economic Developments and Outlook) was produced by Naomi Mathenge, Tasneem Alam Ghauri, Celina Mutie, Alex Sienaert and Angélique Umutesi (all MTI) with inputs from Alastair Haynes (EAEPV). Part 2 (Special Topic on Education) was produced by Pedro Cerdan-Infantes (Senior Economist, HAEE2), and Natasha De Andrade Falcao (Economist, HAEE2). The special topic includes analysis and materials from the forthcoming report “Module 2 Public Expenditure Review in Kenya”. Anne Khatimba provided logistical support, Keziah Muthembwa and Vera Rosauer managed communication and dissemination, and Robert Waiharo designed the report. The report benefited from peer reviews by Nobuyuki Tanaka (Economist, HEDGE) and Sergiy Kasyanenko (Economist, EPGDR). The report was prepared under the overall guidance of Vivek Suri (Practice Manager, EAEM1), Muna Salih (Practice Manager, HAEE2), Philip Schuler (Lead Economist, EA1M1), Allen Dennis (Program Leader, EAEDR), Asad Alam (Regional Director, EAEDR), Keith Hansen (Country Director, AECE2) and Camille Lampart Nuamah (Manager, Operations, AECE2). The report benefited from valuable regular discussions with officials at the National Treasury, Central Bank of Kenya, and the Kenya National Bureau of Statistics. The team also thanks Tobias Rasmussen (Resident Representative for Kenya), and the full International Monetary Fund staff team for Kenya for their excellent ongoing collaboration. The findings, interpretations, and conclusions expressed in this report do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. For questions about this report please email nmathenge@worldbank.org and asienaert@worldbank.org. For information about the World Bank and its activities in Kenya, please visit: https://www.worldbank.org/en/country/kenya ii June 2022 | Edition No. 25 EXECUTIVE SUMMARY Kenya managed to contain the health and economic cost of subsidizing fuel. The rebound in economic activity impacts of multiple COVID-19 waves in 2021, helped and ongoing tax reforms and revenue administration by targeted containment measures and progress improvements have boosted revenue collection. Revenue on vaccination, but is now facing a potentially large in the current fiscal year through Q3 remained on target and economic shock from the war in Ukraine. performed above the previous year’s outturn (12.3 percent of GDP in Q3 2021/22 against a target of 11.2 percent of Kenya’s economy has staged a remarkable recovery from GDP in Q3 2020/21). As a result, the fiscal deficit in Q3 the worst economic effects of the pandemic. Real GDP FY2021/22 shrank to 3.9 percent of full-year GDP from 4.4 increased by 7.5 percent in 2021, higher than the estimated percent a year earlier. However, the limited passthrough of growth in Sub-Saharan Africa of 4 percent. This growth was higher international oil prices to consumers is generating driven by the recovery of the services sector and expansion fiscal costs, with the total monthly cost of subsidizing fuel in industrial output. By contrast, the agriculture sector’s estimated to be approximately US$66 million. output contracted by 0.2 percent in 2021, affected by drought conditions in the arid and semi-arid lands (ASAL). Looking ahead, economic growth is expected to moderate in 2022 with real GDP projected to grow by 5.5 Kenya’s economic performance remained strong in percent in 2022 and 5.2 percent on average in 2023–24. the early months of 2022 but external challenges have Offsetting the continued recovery from the pandemic is mounted. Kenya’s exposure to the war in Ukraine through the impact of the war in Ukraine, which has clouded the direct trade linkages is moderate, with Russia and Ukraine outlook for the global economic recovery. Domestically, accounting for only 2.1 percent of total goods trade a key risk to the outlook is a further worsening of the between 2015 and 2020. Similarly, tourists from Ukraine current drought, which is having a devastating effect and Russia do not account for a significant share of Kenya’s on food security and livelihoods in affected parts tourism market. However, the economy is vulnerable of the country and is necessitating increased social to the commodity price shocks resulting from the war, spending on food assistance. For example, using the particularly through fuel, fertilizer, wheat and other food Integrated Food Security Phase Classification (IPC), it is imports. Global financial conditions have also tightened estimated that 3.1 million Kenyans (out of 13.6 million) sharply, increasing external financing costs. living in ASAL counties are food insecure. The baseline projections assume that the country will receive below The Central Bank of Kenya reoriented its accommodative average rains that will negatively affect agricultural monetary policy in view of elevated risks to the inflation performance and also account for the downside effects outlook. The Central Bank Rate has been raised by 50 of the ongoing war in Ukraine through increased global basis points (bps) to 7.5 percent in response to emerging commodity prices. inflationary pressures from the surge in global commodity prices and supply chain disruptions. Headline inflation One sector is critical to achieving Kenya’s development eased from Q4 2021 through February 2022 (5.1 percent goals, accounts for a large share of government y/y), helped by a 15 percent electricity tariff cut. However, spending, and was hit hard by the COVID-19 pandemic: inflation subsequently increased sharply to 7.1 percent education. Accordingly, the special topic of this Kenya y/y in May 2022 as domestic food prices, and fuel prices Economic Update (KEU) is the performance and financing (in March to May), increased following the surge in global of the education sector, drawing on a forthcoming World commodity prices due to the war in Ukraine. The impact Bank Public Expenditure Review (PER) on education. It of the global oil price shock on domestic prices has been examines the impressive improvements which Kenya cushioned by government subsidies. has achieved in education outcomes, the remaining challenges in the sector including charting a successful A strong recovery in revenues has supported fiscal recovery from the pandemic, and how the allocation of performance but this is now being countered by the resources can contribute to resolving these. June 2022 | Edition No. 25 iii Executive Summary Kenya has significantly improved education outcomes. electricity and internet connectivity. There was significant Gross enrollment rates have increased to 78 percent in disruption to capital spending and to preparations for the early-childhood education and 70 percent in secondary new Competency Based Curriculum (CBC). education (whilst remaining above 100 percent in primary). Combining access and learning into Learning- The government now faces the challenge of ensuring Adjusted Years of Education (LAYS) shows that Kenya is that the pandemic does not leave lasting scars above what is expected by its level of income; a child in through its education effects, and to tackle the Kenya completes, on average, 11.6 years of education, remaining medium-term challenges. Key structural which, when adjusted by the level of learning relative to challenges include increasing the enrollment in post- other countries, results in 8.4 effective years of schooling. primary education, improving learning outcomes, and This is the highest LAYS in Africa. While Kenya does well for reducing deep inequalities. As Kenya already spends a its level of income, this does not mean that Kenya should comparatively high share of resources on education, not aim to further improve both access and, especially, meeting these challenges will require ensuring that quality of education in order to improve the LAYS and the resource allocations remain adequate, and improving World Bank’s Human Capital Index (HCI), which measures equity and efficiency in the use of resources. In particular, the level of development of human capital in a country. continuing and accelerating the improvements in the The HCI has shown strong correlation with both economic sector will depend on providing adequate resources growth and equity. to achieve sector objectives and implement ambitious reforms; equitable allocation of resources where they The COVID-19 pandemic has resulted in learning losses are most needed and are likely to have the most impact; and deepened inequalities in the education sector. and efficiency through improvements in management Around 17 million students and more than 320,000 practices at the school level, improving the management teachers were affected by the closure of 30,000 primary at the local level and providing extra support for regions and secondary schools during 2020. The partial reopening with the most difficulties. of schools began in October 2020, for students in grades 4, 8 and 12. In January 2021, all basic and tertiary education With continued efforts, Kenya can build on the strong institutions fully reopened. Efforts to provide remote foundations of its education system by continuing to learning revealed a significant digital divide, with over 50 improve access to and the quality of education, equipping percent of students not being able to engage in remote it to be a driver of growth towards becoming an upper learning opportunities mainly due to lack of devices, middle-income country, and reducing inequalities. A strong recovery in revenues has supported fiscal performance but this is now being countered by the cost of subsidizing fuel Photo: © Billy Kipyegon Mutai | World Bank iv June 2022 | Edition No. 25 The State of Kenya’s Economy Photo: © Billy Kipyegon Mutai | World Bank The State of Kenya’s Economy 1. Recent Economic Developments and Outlook 1.1. The global and regional economic accounting for 2.1 percent of Kenya’s total goods trade recovery from the pandemic is slowing in between 2015 and 2020. Similarly, tourists from Ukraine the face of multiple pressures, including and Russia do not account for a significant share of Kenya’s the invasion of Ukraine1 tourism market. However, the economy is vulnerable to The global economy’s recovery from the COVID-19 commodity price shocks resulting from the war in Ukraine. pandemic is losing steam as it faces a series of shocks. Kenya is a net oil importer; imports of refined fuel products The global economy is estimated to have rebounded by 5.5 amounted to $3.2 billion in 2021 (15% of total imports). percent in 2021 and prior to the Russian invasion of Ukraine Increased global prices are putting upward pressure on was projected to grow by 4.1 percent. Pent-up demand headline CPI, increasing the fiscal costs of fuel subsidies, for goods and constrained supply responses due to the and leading to a deterioration of the current account lingering effects of the pandemic led to a broad-based balance. The latter is also likely to be adversely affected by increase in the prices of commodities and other input weaker global demand and tourism from advanced and prices. Given the strong recovery in demand, major central developing countries. The impact of higher oil prices is banks started to gradually withdraw the unprecedented not only limited to a rise in the import bill but would also monetary policy stimulus deployed at the onset of the extend to increased cost of production and transportation pandemic. Russia’s invasion of Ukraine in February 2022 impacting the utilities, manufacturing and services sectors. adds new headwinds through rising commodity prices, Increased world prices for wheat products (2.3 percent of tighter financing conditions, trade and travel disruptions, total imports) and spillovers to other food products could new movements of migrants and refugees, and generally have adverse effects on inflation and food security. Higher increased economic volatility. These forces are weighing on prices for fertilizer (1.2 percent of total imports) could economic activity and leading to additional inflation and weigh on agricultural output. fiscal pressures, thus posing challenges to policymakers worldwide. Weighed down by the war in Ukraine and 1.2. The Kenyan economy rebounded China’s recent COVID-related lockdowns, global growth is in 2021 despite a contraction in projected to fall to 3.2 percent in 2022. The global outlook agricultural output remains highly uncertain and will depend on the duration Kenya managed to contain the health and economic and severity of the war. New coronavirus variants and impacts of multiple COVID-19 waves in 2021, helped outbreaks of COVID-19 also pose continuing risks to global by targeted containment measures and progress on economic activity. vaccination. The Delta and Omicron COVID-19 variant waves of the pandemic had only a relatively modest impact The economic recovery in Sub-Saharan Africa (SSA) on economic activity. Mobility levels remained above the has decelerated amid high volatility and uncertainty pre-pandemic baseline for most of the year. While the of external economic and financial conditions. In Sub- number of daily confirmed COVID-19 cases jumped with Saharan Africa, many countries’ economies are struggling to the onset of each wave (reaching a record high of 3,749 gain momentum amid the slowdown in global economic in late December 2021 during the Omicron wave), the activity, continued supply constraints, high inflation, and number of daily new deaths remained relatively low and rising fiscal risks due to high debt levels. The pace of has sharply declined since September 2021, with just four economic growth in the region is expected to moderate deaths reported since mid-March 2022 (Figure 1). This was in 2022, expanding by 3.6 percent, down from 4 percent supported by a pickup in the vaccine rollout following in 2021. improvement in vaccine availability since September 2021. As of May 30, 2022, Kenya had received a total of 35.1 Kenya faces a potentially large economic shock from million vaccines (sufficient to cover about 58 percent of the the war in Ukraine. Kenya’s exposure through direct adult population), with 18.2 million doses administered. trade linkages appears moderate, with Russia and Ukraine However, the dramatic recent declines in confirmed cases 1 This section draws on World Bank, Africa’s Pulse, April 2022. 2 World Bank, Global Economic Prospects, January 2022. 3 Spring Meetings 2022 Media Roundtable Opening Remarks by World Bank Group President David Malpass. 2 June 2022 | Edition No. 25 The State of Kenya’s Economy Figure 1: Confirmed new cases and deaths have plummeted services sector and expansion in industrial output since the end of the Omicron wave (Figure 2). Following a strong performance in 2020, the New cases Daily new_deaths (RHS) Total as of May 30, 2022 agriculture sector’s output fell by 0.2 percent in 2021 Cumulative cases 324,859, & Cumulative deaths 5,651 3000 45 affected by drought conditions in the arid and semi-arid Number of Cases (7-day rolling average) 40 lands. On the expenditure side, improving employment Daily number of Deaths 2500 35 2000 30 conditions and household incomes against the backdrop 1500 25 of resilient remittances and a strong recovery in services 20 1000 15 and industry increased household consumption by 6.2 500 10 percent in 2021 against a contraction of 2.5 percent a 5 0 0 year earlier. Growth in gross investment increased to 10.1 percent in 2021 from 2.5 percent in 2020, benefiting from 27 - Mar -20 27 - Apr -20 27 - May -20 27 - Jun -20 27 - Jul -20 27 - Aug -20 27 - Sep -20 27 - Oct -20 27 - Nov -20 27 - Dec -20 27 - Jan -21 27 - Feb -21 27 - Mar -21 27 - Apr -21 27 - May -21 27 - Jun -21 27 - Jul -21 27 - Aug -21 27 - Sep -21 27 - Oct -21 27 - Nov -21 27 - Dec -21 27 - Jan -22 27 - Feb -22 27 - Mar -22 27 - Apr -22 27 - May -22 improving business confidence, accommodative monetary policy, pent-up transport investment and government’s Source: Our World in Data continued focus on infrastructure and affordable housing, and deaths may be contributing to vaccine complacency, lifting investment’s contribution to economic growth from and the vaccination rollout has slowed down in recent 16.6 percent in 2019 to 28.1 percent in 2021. With the weeks. According to a recent global survey, the share of increase in imports significantly outpacing exports growth, unvaccinated people in Kenya willing to get vaccinated net exports subtracted 2.4 percentage points from GDP decreased from about 56 percent in December 2021 to growth in 2021. 40 percent in March 2022.4 With roughly 30 percent of adults (8.4 million people) having been fully vaccinated Services rebounded strongly overall but the recovery in as of May 30, 2022, it is important to maintain vaccination tourism and related activities has been partial. (Figure momentum to achieve the government’s target of fully 5). Services sector value-added increased by 9.8 percent inoculating the adult population of about 30 million by the in 2021 compared to a contraction of 1.8 percent in 2020. end of 2022. A major factor in this strong rebound is the impact on the national accounts of measured education sector output The economy staged a strong rebound in 2021 and normalizing.5 Beneath the overall buoyancy of the services output is now well above pre-pandemic levels, but the sector lies a mixed picture across sub-sectors, ranging from performances of the agriculture and non-agriculture a strong rebound to well above pre-crisis output in the sectors have diverged. Real GDP increased by 7.5 percent education subsector, to only a partial recovery in tourism in 2021, driven by a particularly strong recovery of the (as reflected by food and accommodation still being about Figure 2: Private consumption and investment were the major Figure 3: Transport equipment led the surge in investment contributors to growth (contribution to investment growth) Private consumption Government consumption Gross xed investment Dwellings Other buildings/structures Net exports GDP Transport equipment ICT equipment Other machinery/equipment All others 8 Total 7 12 6 9 5 Percent y/y Percentage points 4 6 3 3 2 1 0 0 -3 -1 -2 -6 2018 2019 2020 2021 2019 2020 2021 Source: KNBS Source: KNBS 4 COVID Behaviors Dashboard. Johns Hopkins Center for Communication Programs https://covidbehaviors.org/ 5 Education is largely provided by the public sector (mostly a non-market output) and hence gross value added (GVA) of the sector is derived using the cost approach (compensation of employees + intermediate consumption + consumption of fixed capital). In 2020, education GVA at current prices plunged as many of the private schools (that operate as businesses) were shut down and therefore produced no output. However, for the public sector the GVA was derived as usual since the teachers had a contractual agreement with the government and therefore were being paid and available for work. Given that fewer students were being taught while the government spent the same amount, KNBS adjusted the deflator accordingly, resulting in a large contraction in education GVA at constant prices. The recovery in 2021 (hence the spike) was the result of normalization where the number of students increased (due to resumption of normalcy in the sector as well as increases due to the natural increase of the learner population). June 2022 | Edition No. 25 3 The State of Kenya’s Economy Figure 4: Services drove the economic recovery in 2021 Figure 5: …but with dispersion within subsectors (real value (contribution to real GDP growth, percentage points)... added in 2021 indexed at 2019=100) Agriculture Industry Services Taxes GDP 140 Pre-COVID baseline 12 120 100 9 Index 80 60 6 40 Percentage points 3 20 0 0 Wholesale & retail trade Transport & Storage Finance Public admin. Prof/admin etc. Real estate Education Health Other Services ICT Accommodation & food -3 -6 1 2 3 4 1 2 3 4 1 2 3 4 2019 2020 2021 Source: KNBS Source: World Bank calculations based on KNBS data 50 percent below the pre-pandemic levels). A Central Bank in 2020. Agriculture output contracted by 0.2 percent in of Kenya (CBK) survey of hotels conducted in mid-March 2021, leading the sector to slightly pull back GDP growth 2022 showed that all the sampled hotels were open, with (compared to a 0.9 percentage point contribution to GDP employment in the sector increasing to about 83 percent growth in 2020). The 2021 production estimates indicate of the pre-COVID-19 levels from the low of 37 percent that poor rains reduced maize output by 3 percent, wheat in May 2020, and average bed occupancy rising to 57 by 28 percent and beans by 13 percent below 2020 levels. percent from its low of 10 percent in May 2020 (though Food security outcomes deteriorated in 2021 driven by the it remains below pre-COVID levels).6 International visitor three consecutive below-average rainy seasons resulting arrivals to Kenya were on a recovery path during most of in poor crop and livestock production, resource-based 2021, increasing to 692,938 in 2021 from 431,763 a year conflicts, and increased livestock disease and mortality. The earlier. However, this is still about 55 percent lower than government declared the drought a national emergency the pre-pandemic level recorded in 2019, and the Omicron in September 2021 and an assessment of the October- variant of COVID-19 subsequently caused additional travel December 2021 short rains indicated that the drought has disruptions in January–February 2022. left 3.1 million Kenyans food insecure in the pastoral and marginal agricultural areas. Food insecurity is rising in Kenya The industrial sector also staged a recovery, supported and up to 5.0 million people will need food assistance by by the easing of mobility restrictions and the policy September 2022. Addressing the challenges of climate focus on infrastructure and affordable housing. Value- change is key to achieving long-term food security and added in the manufacturing subsector increased by 6.8 sustainable agriculture. percent in 2021 compared to a 0.4 percent decline a year 1.3. Monetary policy has been earlier. Activity in the construction subsector remained tightened in response to emerging buoyant, increasing by 6.6 percent, supported by ongoing inflationary pressures infrastructure projects and the implementation of the Inflation remains within the central bank’s target range, affordable housing program. Utilities (electricity, gas and but has trended upward due to higher food and fuel water supply) expanded by 5.0 percent in 2021 compared prices. Headline inflation eased from Q4 of 2021 through to an increase of 0.6 percent a year earlier. February 2022, helped by a 15 percent electricity tariff cut. Inflation subsequently accelerated to 7.1 percent y/y in May Poor rains led to a contraction in agriculture output, 2022 as domestic food prices, and fuel prices (in March to exhibiting climate-related risks and the need to increase May), increased following the surge in global commodity resilience to climate change. With the agriculture sector prices due to the war in Ukraine. The overall inflation rate being predominantly rain-dependent, the sector has remained within the central bank’s target range of 2.5–7.5 been impacted by the below-average long and short percent (Figure 6). Products experiencing significant price rains in 2021 following a particularly strong performance increases in May 2022 included fortified maize flour (23.8 6 Central Bank of Kenya, Monetary Policy Committee Hotels Survey, March 2022. 4 June 2022 | Edition No. 25 The State of Kenya’s Economy Figure 6: Headline inflation remains within the CBK band Figure 7: Food inflation has picked up Overall in ation Core in ation Food in ation Housing, water, electricity, gas & other fuels + transport in ation 10.0 Core in ation 8 Upper bound 7 7.5 6 Percent y/y 5 Percent 5.0 4 3 2.5 Lower bound 2 1 0.0 0 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 May -20 Jun-20 Jul -20 Aug -20 Sep -20 Oct -20 Nov-20 Dec -20 Jan -21 Feb -21 Mar -21 Apr -21 May -21 Jun-21 Jul -21 Aug -21 Sep -21 Oct -21 Nov-21 Dec -21 Jan -22 Feb -22 Mar -22 Apr -22 May -22 Source: KNBS Source: KNBS percent y/y), cooking fat (44.6 percent y/y), cooking oil- prices to domestic fuel prices and electricity generation salad (47.1 percent y/y), wheat flour-white (28.4 percent costs by maintaining below-market retail price caps on y/y), kerosene (21.3 percent y/y), petrol (18.7 percent y/y), fuels and paying compensation to distributors for the loss. and diesel (21.5 percent y/y). Core inflation, which excludes This subsidization of fuels has helped to reduce inflation often volatile food and energy prices, remained little- pressure from higher global oil prices (see Box 1) but at a changed at 2.6 percent y/y in May 2022 (Figure 7). significant fiscal cost (see Section 1.5 below). The impact of the global oil price shock on domestic In March 2022, the Energy and Petroleum Regulatory prices has been cushioned by government subsidies, Authority (EPRA) increased the price of petrol and diesel generating fiscal costs. International energy prices were by 4.0 percent and 4.5 percent, and in April and May already elevated since H2 of 2021 on the back of the global increased petrol, diesel and kerosene prices by a further recovery from the pandemic and supply bottlenecks. KES 9.90 and KES 5.50 respectively. Consequently, fuel World prices of commodities, particularly oil, wheat, and price inflation increased by 2.5 percentage points from fertilizer rose sharply in March 2022 as the war in Ukraine February 2022 to 14.2 percent y/y in April 2022 (Figure 8 intensified and consequent international sanctions and Figure 9). However, prices still remain on the order of on Russia resulted in severe supply disruptions. Global 20 percent below cost-recovery levels, as the government energy prices surged by 24.1 percent in March 2022, led continues to significantly subsidize fuel prices. Conversely, by crude oil (20.2 percent m/m), coal (49.9 percent m/m), the 15 percent electricity tariff cut in December 2021 has and natural gas (38.3 percent m/m). The government lowered electricity prices (Figure 8). has partially blocked the passthrough of international oil Figure 8: Domestic fuel prices inflation has picked up in recent Figure 9: …as domestic retail fuel prices have recently been months… increased due to higher global market prices Fuel Electricity Gas (LPG) Kerosene Petrol Diesel 25 90 20 70 15 50 Percent y/y 10 30 Percent y/y 5 10 -10 0 -30 -5 -50 -10 Dec-20 Dec-21 Oct-20 Oct-21 Jun-20 Jun-21 Aug-20 Aug-21 Apr-21 Apr-22 Apr-20 Feb-22 Feb-20 Feb-21 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec -20 Feb-21 Apr-21 Jun-21 Aug-21 Oct-21 Dec -21 Feb-22 Apr-22 Note: Fuel inflation includes (Gas-LPG, Kerosene, Petrol & Diesel) Source: KNBS Source: KNBS June 2022 | Edition No. 25 5 The State of Kenya’s Economy Box 1: The impact of global commodity price shocks on Kenya’s inflation rate Kenya’s inflation rate faces a potentially large shock from the Russia-Ukraine war. To illustrate, this Box discusses the direct impacts of global oil and wheat prices on inflation rate given Kenya’s significant net fuel and wheat imports. Global commodity prices have been trending higher since Figure B1: The average prices of oil and wheat have surged mid-2020 and recently accelerated sharply due to the ongoing Wheat, average (US SRW& US HRW) Crude oil, average (RHS) 600 120 war in Ukraine. The average price of Brent, WTI and Dubai crude oil breached the $110 per barrel threshold in March 2022, last 500 100 seen over a decade ago—before easing to $103/bbl in April 400 80 US$/bbl US$/mt 2022. Average wheat prices reached $503.7 per metric tonne in 300 60 March 2022 and rose to $583.9 in April 2022. As of March 2022, 200 40 the average oil price and wheat price had risen to well above the pre-pandemic level (Figure B1). Similarly, the average price 100 20 of fertilizers increased by 9.7 percent (m/m) in April 2022. These 0 0 Jun-18 Jun-19 Jun-20 Jun-21 Apr-19 Apr-20 Apr-21 Apr-22 Aug-18 Aug-19 Aug-20 Aug-21 Feb-19 Feb-20 Feb-21 Feb-22 Dec-18 Dec-19 Dec-20 Dec-21 Oct-18 Oct-19 Oct-20 Oct-21 price increases and the possibility of prices remaining elevated in the medium-term have drawn attention to the threat they pose to price stability and the policy space to continue an Source: World Bank (Pink sheet) Note: US SRW denotes United States Soft Red Winter & US HRW denotes United States accommodative monetary stance. Hard Red Winter Potential global price shock impacts on inflation: Fuels- and directly related prices (e.g., taxi fares) have about a 5 percent weight in the CPI, and would also be expected to filter into a wide range of other prices in the economy by increasing transport costs. Wheat and bread-related items account for 3.2 percent of the CPI. Econometric estimates of inflation impact in Kenya from global crude oil prices tend to show only modest pass-through but are likely underestimated due to data constraints and past periods of retail price suppression. For policymakers, the key risk is that transient and product-specific price increases due to higher global oil prices feed into higher generalized inflation expectations, which would merit a monetary policy response to maintain overall price stability. The Central Bank of Kenya (CBK) raised the central bank The banking sector remains adequately capitalized. rate (CBR) from 7.0 percent to 7.5 percent. At its May 2022 The sector has weathered the COVID-19 shock, helped meeting, the Monetary Policy Committee (MPC) raised by the CBK’s emergency relief measures in response to the policy rate to 7.5 percent in response to inflationary the pandemic. As of end-December 2021, banks’ capital pressures posed by the surge in global commodity adequacy ratio stood at 19.6 percent, well above the prices and supply chain disruptions. The decision was statutory requirements. With an ample capital position predicated on the MPC’s view on the elevated risks to the and strong deposit growth, the banking sector as a whole inflation outlook and aimed at further anchoring inflation remains well-positioned to meet the economy’s credit expectations. needs and support the recovery, including by helping to meet the government’s financing requirements. The Credit to the private sector has picked up in recent gross non-performing loans (NPLs) ratio subsided to months but remains low in real terms. Credit to the 13.1 percent in December 2021 (after peaking at 14.6 private sector rose by 11.5 percent y/y in April 2022. The percent in March 2021) but since then has risen to 14.1 market segments recording the strongest credit growth percent in April 2022, as a result of specific challenges in were transport and communication (up 28.9 percent y/y), the manufacturing, trade, transport and communication, manufacturing (12.0 percent y/y), trade (10.7 percent and building and construction sectors. Banking sector y/y), consumer durables (16.1 percent y/y), and business profitability improved in 2021, with the return on assets and services (12.2 percent y/y). In real terms, however, private 7 return on equity increasing to 3.3 percent and 22.9 percent. sector credit growth has remained modest. Progress towards implementing a risk-based pricing framework should over time support more lending including to micro, small and medium-sized enterprises. 7 CBK, Press Release: Monetary Policy Committee, May 30, 2022. 6 June 2022 | Edition No. 25 The State of Kenya’s Economy 1.4. The current account deficit is widening nearly 2 million tonnes). In addition, Kenya imported $259 following the surge in commodity prices million worth of fertilizers in 2020, or 1.2 percent of total The current account deficit widened in 2021, driven by imports. Kenya thus faces a balance of payments shock from a larger trade deficit. Kenya’s deficit in trade of goods higher fuel, wheat and fertilizer import prices, although the and services increased to 10.0 percent of GDP in 2021, magnitude and duration of the shock is highly uncertain. from 8.3 percent in 2020, as the increase in imports more than outweighed increases in exports. Merchandise Official sector inflows have helped finance the current exports increased by 0.1 percentage point to 6.3 percent account deficit and maintain international reserve of GDP 2021, owing in part to improved external demand, coverage (Table 3). The capital and financial accounts while services exports have continued to strengthen recorded net inflows in 2021, mainly on account of as tourism and travel recover (Figure 10). Merchandise significant inflows from international financial institutions imports were driven up by a strong rebound in domestic including under the IMF’s ECF/EFF arrangements ($565.6 demand and uptick in international oil prices from mid- million in 2021)8, the IMF’s Special Drawing Rights (SDR) 2021. Consequently, oil and non-oil imports increased general allocation ($725.7 million, August 2021), and by 59.2 percent and 19.4 percent in 2021 (compared to World Bank development policy financing ($750m in a contraction of 34.0 percent and 7.1 percent in 2020). June 2021). In 2022, official sector inflows include World Moving into 2022, these trends have continued, with Bank development policy financing ($750 million, March export receipts growing by 24.5 percent y/y in the first 2 2022) and US$244 million from the third ECF/EFF review months of 2022 and import payments increasing by 27.6 once this is approved by the IMF Board. Foreign exchange percent y/y. The larger trade deficit was mitigated by reserves stood at US$ 8,179 million (about five months of buoyant diaspora remittances, reaching a record US$3,718 imports) as at May 30, 2022. Foreign direct investment in million in 2021, equivalent to about 3 percent of Kenya’s Kenya was low in the year to February 2022 (gross inflows GDP. In the first two months of 2022, diaspora remittances of $463.4 million on a 12-month cumulative basis and just increased by 22.6 percent y/y to reach $660.3 million. $1.6 million net of outbound FDI). Portfolio investment Overall, the current account deficit stood at approximately registered a small net inflow equivalent to 0.1 percent of 5.6 percent of GDP in the 12 months to February 2022. GDP in 2021, following significant net outflows in 2020 as global investor risk appetite fell due to the pandemic. Kenya’s current account deficit is likely to increase in 2022 as the war in Ukraine pushes up import prices. Kenya Kenya participated in the G20 DSSI from January 2021. imports significant amount of fuel, wheat and fertilizer. This reduced gross external financing needs, lowered In 2019 (latest available data), about 25 percent of wheat external liquidity risks, and freed fiscal space to sustain imports came from Russia and 10 percent from Ukraine. social and COVID-19 response spending. The deferred Domestic wheat production is significant but fluctuates debt service amounted to approximately US$514 million and is well below domestic needs (in 2019, for example, (equivalent to about 0.5 percent of GDP) and helped to Kenya produced 366,200 tonnes of wheat and imported preserve space for priority social expenditures. Figure 10: Tourist arrivals have increased considerably but remain below pre-COVID levels (number) The Kenyan shilling (KES) has depreciated gradually 180 against the US dollar since H2 2021. In nominal terms, 160 the shilling depreciated by 3.5 percent against the US 140 dollar (USD) in 2021. The KES has continued its gradual Number of tourist arrivals '000 120 depreciation trend against the USD so far in 2022, trading at 100 116.7 per USD as on May 31, 2022, to be lower by a further 80 3.2 percent. Against a trade-weighted basket of foreign 60 40 currencies, the KES has also depreciated modestly during 20 the review period on both a nominal basis and, to a lesser 0 degree, real (domestic price-adjusted) basis. This currency Jun -19 Jun -20 Jun -21 Jun -18 Sep -20 Sep -21 Sep -18 Sep -19 Mar -20 Dec -20 Mar -21 Dec -21 Mar -22 Mar -18 Dec -18 Mar -19 Dec -19 adjustment helps to absorb the global shocks affecting Kenya’s external balances and terms of trade (Figure 11). Source: KNBS 8 $307.5 million under the IMF’s ECF/EFF arrangements was disbursed in April 2021 and $258.1 million was disbursed in December 2021. June 2022 | Edition No. 25 7 The State of Kenya’s Economy Figure 11: The nominal and real effective exchange rates have The limited passthrough of higher international energy recently been on a depreciating trend, facilitating economic adjustment to global shocks (an increase indicates depreciation) prices to consumers is generating fiscal costs. The REER NEER government introduced a fuel subsidy in October 2021 110 through the petroleum development levy fund, with total allocations to fuel price stabilization for FY2021/22 100 amounting to KES 25.0 billion (0.2 percent of GDP).10 In Q3 FY2021/22, before the further surge in global energy Jan 2018=100 prices due to the war in Ukraine, total expenses on fuel 90 subsidies had already reached KES 34.1 billion (0.3 percent of GDP). Fuel prices were kept unchanged from October 80 2021 to February 2022, followed by increases in March and Feb-19 May -19 Aug -19 Nov -19 Feb-20 May -20 Aug -20 Nov -20 Feb-21 May -21 Aug -21 Nov -21 Feb-22 April 2022, for example, the applicable retail price of super petrol in Nairobi rose by 3.9 percent in March 2022 and 7.3 Source: Central Bank of Kenya percent in April 2022. At the prevailing prices at the time of 1.5. A rebalance in government expenditure the April price increase, petrol is being subsidized by KES and a recovery in revenue enabled 20.4 per liter, diesel by KES 27.6 per liter and kerosene by continued response to the pandemic KES 26.9 per liter, and the total monthly cost of subsidizing The rebound in economic activity and ongoing tax fuel is estimated to be approximately $66 million.11 reforms have boosted revenue collection. Revenue in the current fiscal year through Q3 remained on target and Sustained accumulation of pending bills remains a performed above the previous year’s outturn (12.3 percent substantial challenge to businesses’ cash flow and of GDP in Q3 2021/22 against a target of 11.2 percent of liquidity. Pending bills have accumulated both at the GDP in Q3 2020/21). This strong revenue performance has national and county level, despite the government’s been broad-based, with income tax and VAT increasing the policy of prioritizing payments of pending bills at the most as tax relief measures introduced at the onset of the beginning of every financial year. Pending bills rose from COVID-19 pandemic were unwound and tax expenditures KES 64.7 billion (0.7 percent of GDP) in June 2019 to KES were reduced by harmonizing exemptions. Additional 359.5 billion (3.2 percent of GDP) in June 2021 and further tax administration measures such as the Voluntary Tax to KES 434.5.7 billion (3.4 percent of GDP) in March 2022. Disclosure Program also increased revenue collection, At county level, pending bills stood at KES 10.8 billion (0.1 generating KES 5.9 billion in 2021.9 percent of GDP) in June 2021. The large stock of arrears reduces government suppliers’ liquidity and ability to plan Government expenditure has been reorganized to and finance expansion, and introduces greater uncertainty continue to support economic recovery. Government in the business environment. This highlights the urgency expenditure in Q3 2021/22 remained at 16.4 percent of of ongoing public financial management (PFM) reforms GDP, about the same as in Q3 2020/21, with an increase in to reduce the challenges of over-commitment of budgets recurrent spending being offset by reduced development and the low or late disbursement of funds that often result spending and below-target transfers to county in delayed payments of government’s suppliers. governments. The rise in recurrent expenditure has been driven by economic stimulus program-related spending (KES The government is making greater use of concessional 23.1 billion or 0.2 percent of GDP allocated for FY2021/22), borrowing to finance deficits amid elevated debt COVID-19 management including procurement and vulnerabilities. Persistently large budget deficits and, administering vaccines, preparations for general elections more recently, the pandemic and government actions scheduled in August 2022, and fuel subsidy spending. to mitigate its effects, increased Kenya’s public debt Coupled with the revenue outperformance, this resulted in to 67.8 percent of GDP as of March 2022, up from 50 the fiscal deficit in Q3 FY2021/22 shrinking to 3.9 percent of percent of GDP in June 2016. The rapid accumulation of full-year GDP from 4.4 percent a year earlier (Table 4). debt, combined with increased reliance on financing 9 Effective from January 2021, the Voluntary Tax Disclosure Program allows a person to disclose undeclared tax liabilities for the period of 1 July 2015 to 30 June 2020 and obtain full or partial relief of penalties and interest on the tax disclosed under the program (Source: KRA). 10 National Treasury, 2021/22 Supplementary Budget Estimates. 11 Energy and Petroleum regulatory Authority (EPRA), Maximum retail petroleum prices in Kenya for the period 15th March to 14th April 2022. 8 June 2022 | Edition No. 25 The State of Kenya’s Economy at commercial terms (prior to the pandemic), have Figure 12: The recent increased uptake of concessional borrowing has reduced the share of commercial debt increased Kenya’s debt-related vulnerabilities, resulting in 35 a rating of a high risk of debt distress as assessed by the 30 joint IMF/World Bank DSA.12 The government’s renewed prioritization of concessional borrowing (Figure 12) has 25 Percent of GDP begun to reduce external debt service costs, and debt 20 management reforms are ongoing.13 The government is 15 also working to lengthen the maturity profile of domestic 10 debt and reduce refinancing risk by relying more on 5 T-bonds instead of short-term T-bills, increasing the bonds 0 to 28.0 percent of GDP in April 2022 from 25.2 percent of Mar-20 Mar-21 Mar-22 GDP in April 2021, while bills declined by 1.4 percentage Bilateral Multilateral Commercial Export credit points to 5.1 percent of GDP in April 2022 from 6.7 percent Source: The National Treasury (Quarterly Economic and Budgetary Review, Q3 FY2021/22) of GDP in April 2021. 2. Outlook and Risks 2.1. The economic outlook remains highly efforts depending on the government’s approach to uncertain and risks to the forecasts are passing the price increases on to retail fuel consumers. elevated In addition, increased world prices for wheat products Continuing the momentum on vaccination remains a and fertilizer are likely to have adverse effects on inflation, key factor in the outlook. Although confirmed new cases agricultural productivity and food security. The economy is are currently very low in Kenya, the future course of the also exposed to broad-based global investor risk aversion pandemic remains uncertain, including the possibility of and broad-based dollar appreciation, due to significant disruptive future waves of infections from any new variants external debt. of the coronavirus. This makes it important to achieve the government’s target of inoculating Kenya’s entire Growth will moderate in 2022, as pandemic rebound adult population against COVID-19 by end-2022. With effects fade and the war in Ukraine increases economic vaccinations slowing down recently, a concerted effort headwinds. Kenya’s real GDP is projected to grow by 5.5 is needed to maintain the momentum in the vaccination percent in 2022 and 5.2 percent on average in 2023–24, rollout and to counter vaccine hesitancy. a robust pace but lower than the 7.5 percent rate in 2021, which reflected a strong bounce-back from COVID-19. The war in Ukraine affects the Kenyan economy through Offsetting the strong economic momentum generated by several, mainly indirect channels and exacerbates the pandemic recovery is the impact of the war in Ukraine, uncertainty as to the economic outlook. Though Kenya which has clouded the outlook for the global economic has limited direct trade and financial links with Russia recovery. High commodity prices will increase import and Ukraine, the war is expected to impact the Kenyan costs, while the projected slowdown in global growth will economy through higher global commodity prices, tighter soften the demand for Kenyan exports. The war in Ukraine global financial conditions, and slower global growth. The and consequent sanctions are expected to subtract about baseline scenario assumes about 50 percent increase in 0.5 percentage points of GDP growth in 2022 and 0.3 global energy prices from 2021. This sharp rise in global percentage points in 2023 compared to the baseline prior energy prices significantly increases annual import costs, to the war, largely through indirect terms of trade losses. adds to inflation, and could undermine fiscal consolidation Notwithstanding the more adverse external economic 12 IMF Country Report No. 20/156. 13 In addition to the 2022 Budget Statement, the government has proposed to replace the current nominal debt ceiling with a debt anchor capping debt at 55 percent of GDP in net present value (NPV) terms. However, the debt can surpass the ceiling with a requirement that the Cabinet Secretary reports to Parliament when this happens, with time-bound remedial actions in pursuit of debt sustainability. June 2022 | Edition No. 25 9 The State of Kenya’s Economy Table 1: Medium term growth projections 2019 2020 2021 e 2022 f 2023 f 2024 f Real GDP growth, at constant market prices 5.2 -0.3 7.5 5.5 5.0 5.3 Private consumption 3.8 -1.9 4.6 4.0 3.7 3.9 Government consumption 5.6 3.0 5.7 6.6 5.3 5.2 Gross fixed capital investment 4.5 2.5 10.9 7.0 7.5 8.1 Exports (goods and services) -3.2 -8.8 12.9 6.2 7.4 7.8 Imports (goods and services) 1.8 -9.2 18.9 6.8 8.3 8.3 Real GDP growth, at constant factor prices 5.4 0.4 7.1 5.5 5.0 5.3 Agriculture 2.7 4.6 -0.2 1.3 3.8 4.2 Industry 4.0 3.3 7.2 3.5 3.6 4.3 Services 6.7 -1.8 9.5 7.4 5.8 5.9 Inflation (consumer price index) 5.2 5.3 6.1 7.0 5.5 5.0 Current account balance (% of GDP) -5.2 -4.8 -5.5 -6.0 -5.5 -5.0 Net foreign direct investment (% of GDP) 0.9 0.5 0.2 0.6 0.8 0.9 Fiscal balance (% of GDP)/1 -7.3 -7.5 -8.2 -8.1 -6.0 -4.4 Debt (% of GDP)/1 59.6 63.0 67.8 68.0 67.5 64.9 Primary balance (% of GDP)/1 -3.4 -3.4 -3.9 -3.3 -1.1 0.2 Source: World Bank computation and the National Treasury Note: e=estimate, f=forecast, /1 2019 = FY2018/19 environment, the growth projection for 2022 has still 22.8 percent by FY2023/24. Public debt is projected to been upgraded since the last KEU (4.9 percent), to take decline to 64.9 percent of GDP in FY2023/24, benefiting into account the stronger than expected recovery in 2021, from economic growth, fiscal consolidation and reduced feeding through to the annual growth comparison in 2022. borrowing costs due to increases in concessional debt in the financing mix. However, fiscal consolidation faces rising The government remains committed to the task challenges and risks, including from the increased spending of reducing the fiscal deficit, which faces renewed pressures from measures to contain the economic impact challenges. The government plans to implement fiscal of the war in Ukraine (such as the recent spending to consolidation, which is needed to reduce debt risks, subsidize fuels), potential election-related fiscal slippages, restore fiscal space for more development and social and the prospect of more expensive financing costs on the spending, and free up resources for private investment back of tighter global financial conditions. and sustainable job creation. The fiscal deficit is budgeted in the medium-term to narrow to 4.3 percent of GDP by The current account deficit is projected to widen in 2022 FY2023/24 through a balanced mix of expenditure restraint amid terms of trade losses. The upheaval in commodity and revenue enhancement. Measures on the revenue side, prices caused by the war in Ukraine will have an immediate including further reducing tax expenditures, introducing a and direct impact on the trade balance and in turn on the digital tax, and strengthening tax administration to expand current account balance in 2022. Imports are expected to the tax base and improve compliance, are expected to accelerate, partly due to recovering domestic demand, raise revenue from 16.3 percent of GDP in FY2021/22 to but the commodity price surge will play a dominant role 18.1 percent of GDP in FY2023/24. On the expenditure in the higher import bill expected through most of 2022. side, measures including tight recurrent spending control Growth in exports of tea, coffee, and cut flowers will slow and reducing inefficiencies in public investment (including down as the outlook for Kenya’s major export markets through the implementation of public investment weakens, and tourism and transport are also expected to management (PIM) regulations and rationalization of see a more sluggish recovery due to added headwinds for the public investment portfolio) will progressively lower global tourism. Consequently, the current account deficit is expenditure from 25 percent of GDP in FY2021/22 to projected to widen to 6.0 percent in 2022. 10 June 2022 | Edition No. 25 The State of Kenya’s Economy 2.2. Uncertainty as to the outlook is elevated Key sources of external uncertainty include any re- by existing and new downside risks intensification of the pandemic, sustained increases in Key domestic risks include a more virulent pandemic, commodities prices due to prolonged supply disruptions election-related disruptions to fiscal consolidation from the war in Ukraine, increasing financial stress, and and investment (general elections will take place in a larger than projected weakening of global growth. August 2022), and adverse environmental and weather Prior to the war in Ukraine, fertilizer prices were already developments (including if the severe drought currently increasing and, with Kenya importing all fertilizers, a further affecting north-eastern Kenya were to spread, or armyworm rise in fertilizer prices could worsen already volatile food infestations were to worsen). inflation and generate new food supply stresses. While the baseline projections account for the downside effects of As the agricultural sector is a cornerstone of the Kenyan the ongoing war in Ukraine through increased commodity economy and crops are primarily rain-fed, adverse prices, a prolonged war and the associated sanctions, weather conditions constitute the major domestic risk could raise commodity prices further, resulting in higher to the economic outlook. There was a delay in the start of domestic inflationary pressures. This could generate more the March – May 2022 long rains, which are expected to be fiscal costs, such as from the need for increased social below average.14 The baseline projections therefore assume protection spending, including food assistance. that the country will receive below average rains that will negatively affect agricultural performance this year. A more The global economy is projected to weaken as policy widespread drought, coupled with higher than anticipated accommodation is withdrawn to combat inflation, which input costs due to the war in Ukraine, could further reduce has been compounded by higher food and energy yields and increase food insecurity. This will increase prices due to the war in Ukraine. This is likely to lead to poverty levels as a large proportion of the population a reduction in tourist flows, notably from some of Kenya’s relies on the sector for their livelihoods. For example, using key European tourist markets that were yet to recover fully the Integrated Food Security Phase Classification (IPC), It from the effects of the COVID-19 pandemic, negatively is estimated that 3.1 million Kenyans (out of 13.6 million) affecting Kenya’s external position. living in ASAL counties are food insecure.15 Table 2: Gross domestic product by activity, growth rates 2020 2021 2019 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Agriculture 2.7 4.6 -0.2 4.5 8.0 -4.3 9.8 0.4 -0.5 0.6 -1.2 Mining & quarrying 4.3 5.5 18.1 6.5 3.9 5.6 6.0 10.7 10.9 16.4 34.5 Manufacturing 2.6 -0.4 6.9 1.4 -5.4 -2.2 4.3 2.1 11.3 10.2 4.9 Utilities 1.7 0.6 5.0 1.5 -4.5 0.8 4.6 3.6 7.2 6.4 2.8 Construction 7.2 10.1 6.6 8.9 6.0 10.2 15.2 6.8 6.8 6.7 6.0 Wholesale & retail trade 5.3 -0.5 7.9 5.5 -3.8 -5.1 1.4 7.5 9.2 6.4 8.4 Accommodation & food services 14.3 -47.7 52.5 -14.1 -57.2 -62.0 -57.7 -33.0 90.1 127.5 118.6 Transport & Storage 6.3 -7.8 7.2 2.1 -16.8 -10.2 -6.2 -7.9 18.6 14.2 6.5 ICT 7.0 6.3 8.8 7.8 4.9 4.9 7.5 10.1 17.1 4.1 5.3 Finance 8.1 5.9 12.5 6.2 3.2 3.3 10.6 11.8 17.3 11.8 9.9 Public admin. 8.4 7.0 5.6 4.7 4.5 8.3 10.2 6.8 7.6 4.8 3.3 Prof/admin/support services 6.8 -13.7 5.7 2.7 -25.5 -18.4 -12.5 -13.0 18.3 13.4 8.1 Real estate 6.7 4.1 6.7 4.1 3.6 3.8 4.8 6.7 7.4 7.1 5.7 Education 5.7 -9.3 21.4 4.8 -21.1 -16.1 -4.8 11.5 31.6 28.3 18.0 Health 5.5 5.7 6.0 7.1 9.0 4.4 2.9 5.8 6.2 4.1 7.8 Other services 4.3 -14.6 12.6 -3.6 -23.9 -13.9 -17.2 -8.4 28.8 17.7 16.8 FISIM 9.5 -1.8 5.5 -3.8 -0.2 -2.2 -1.1 4.9 2.8 5.1 8.7 Taxes 3.9 -8.1 11.9 5.5 -20.5 -8.5 -7.4 1.8 18.5 12.5 15.7 Total GDP 5.1 -0.3 7.5 4.4 -4.1 -3.5 2.3 2.7 11.0 9.3 7.4 14 https://fews.net/east-africa/kenya 15 FEWSNET KENYA Food Security Outlook report, 2022. June 2022 | Edition No. 25 11 The State of Kenya’s Economy Overall, while Kenya’s economy has been performing well, summary of recent survey-based evidence on households’ it continues to face elevated uncertainty and downside pandemic recovery and ongoing challenges, including risks, including from mounting external headwinds. food insecurity). Key measures in this regard include The challenging outlook underscores the importance of implementing reforms conducive to a more efficient public rapid, equitable vaccine distribution to maximize resilience sector and increased private sector investment, furthering against any possible re-intensification of the pandemic. the governance agenda, and maintaining progress on In addition, the inclusive and resilient growth needed to fiscal consolidation to reduce debt-related vulnerabilities benefit households, especially those at the lower end of and progressively open more fiscal space for development the income distribution can be accelerated (see Box 2 for a spending over the medium-term. Table 3: 12-month Cumulative Balance of Payments (BPM6 presentation, in millions of U.S. dollars, unless otherwise indicated) 2017 2018 2019 2020 2021e Actual Actual Actual Actual Estimate A. Current account -5,685 -5,048 -5,541 -4,619 -6,027 Trade balance -8,630 -8,605 -8,912 -8,075 -10,699 Total exports (good & services) 10,449 11,565 11,493 9,794 11,589 Merchandise exports 5,801 6,088 5,872 6,062 6,730 Tea 1,424 1370 1115 1226 1193 Horticulture 829 1055 991 950 1129 Manufactured Goods 393 377 403 380 507 Services exports 4,648 5,477 5,621 3,732 4,859 Total imports (good & services) 19,079 20,170 20,406 17,869 22,288 Merchandise imports 15,987 16,289 16,551 14,492 18,169 Oil products 2,728 3,386 3,310 2,185 3,480 Services imports 3,092 3,881 3,854 3,377 4,120 Primary and Secondary Incomes 2,944.91 3,556.87 3,370.92 3,456.33 4,672.55 Credit 4,650.40 5,252.81 5,569.31 5,169.72 6,399.62 Remittances 1,962 2,721 2,839 3,102 3,783 Debit 1,705 1,696 2,198 1,713 1,727 B. Capital account 184 263 208 131 195 C. Financial Account -5,563 -6547 -6233 -3023 -5331 Foreign Direct Investment ;net -1,010 -1463 -1132 -499 4 Portfolio investment ;net 789 -627 -1312 1279 -135 Financial derivatives: net 4 11.5 -5.4 -72.7 -35.0 Government borrowing 23667 27214 30044 32867 37106 D. Net Errors and Omissions -166 -720 154 38 1288 E. Overall Balance 108 -1030 -1059 1427 -788 Source: Central Bank of Kenya 12 June 2022 | Edition No. 25 The State of Kenya’s Economy Table 4: Kenya - Fiscal operations (percent of GDP) 2020/21 2021/22 July-March July-March Actual Budget 2020/21 2021/22 Revenues and grants 16.1 16.9 11.2 12.3 Revenue 15.8 16.4 11 12.1 Tax revenue 12.6 13.3 8.7 9.8 Income tax 6.1 6.5 4 4.6 Import duty 1.0 0.9 0.7 0.7 Excise duty 1.9 2.1 1.4 1.5 Value added tax 3.6 3.8 2.6 3.0 Non-tax revenue 3.2 3.1 2.3 2.3 Investment income 0.4 0.3 0.4 0.2 Other 0.8 0.7 0.7 0.6 Ministerial and departmental fees (AIA) 2 2.1 1.2 1.5 Grants 0.3 0.5 0.2 0.2 Expenditure and net lending 24.2 25.4 16 16.4 Recurrent expenditure 15.8 17.1 10.9 11.8 Interest payments 4.3 4.8 3.2 3.3 Domestic interest 3.4 3.8 2.5 2.6 Foreign interest 0.9 1 0.7 0.7 Wages and salaries 4.3 4.2 3.1 3.1 Civil service reform 0.0 0.0 Pensions and other consolidated fund services 1.0 1.1 0.7 0.7 Other 5.7 6.7 3.9 4.6 Transfer to counties 3.5 3.2 1.8 1.7 Development and net lending 4.9 5.1 3.3 2.9 Domestically financed 3 4.3 1.5 1.4 Foreign financed 1.9 0.7 0.8 0.5 Adjustments to cash basis 0 0 0.5 0.3 Overall balance (cash basis, including grants) -8.2 -8.1 -4.4 -3.9 Financing 8.4 8.1 4.3 3.6 Net domestic financing 2.9 2.8 0.2 -0.2 Net foreign financing 5.5 5.3 4.2 3.7 Total gross public debt 67.8 68.0 67.9 67.8 Domestic debt 35.2 33.9 35.1 34.0 External debt 32.6 34.1 32.8 33.8 Source: The National Treasury and Central Bank of Kenya June 2022 | Edition No. 25 13 The State of Kenya’s Economy Box 2: Households' continued recovery from the COVID-19 pandemic and coping mechanisms The share of working-aged individuals in employment has Figure B2-1: Labor force statistics (18-64) returned to pre-pandemic levels. The share of the working- Employed Unemployed Out of Labor Force age population in employment has returned to the same level Labor force statistics (Age 18-64 years) as before the pandemic (Figure B2-1). The employment share 100 14% dipped from 80 to 71 percent between July-October 2021 and 25% 31% 20% 26% 17% 18% 5% 40% November 2021-March 2022, likely driven by fewer households 80 4% 7% 11% 17% 9% Percent of population having to temporarily engage in additional income generating 11% 60 activities to cope with the pandemic (Figure B2-2). Overall, there 10% has been broad reversion towards pre-pandemic employment 40 76% 80% 71% 71% rates, and this has occurred across educational, geographical and 57% 63% 65% 50% gender groups. 20 0 A large share of households continues to use coping Q4 '19 May-Jun Jul-Sep Oct-Nov Jan-Mar Apr-Jun Jul-Oct Nov '21 -Mar (KCHS) '20 '20 '20 '21 '21 '21 '22 mechanisms. Just under 90 percent of households reported 16 using one or more strategies to cope in November 2021-March 2022, with no improvement across the second half of 2021 Figure B2-2: Coping mechanisms (Figure B2-2). The most common approaches are relying on May-Jun '20 Apr-Jun '21 Nov '21-Mar '22 savings (32 percent), and seeking additional income generating No action taken activities (31 percent), however, the share of households who Reduced food consumption Reduced nonfood consumption engaged these strategies has declined. Fewer households Relied on savings reduced their food and non-food consumption compared to Additional income generating activity July-October 2021, yet the strategy remains among one of the Puchased on credit most frequently used ones, pointing towards food insecurity. The Assistance from friends and family Delayed payments continued reliance on coping mechanisms suggests households Selling assets still lack disposable income, for instance, the use of credit Took loan remains at its highest level since the start of the pandemic (27 Borrowed from friends and family percent of households). Finally, 11 percent of households relied Assistance from Gov on government assistance, nearly twice as many as in and July- 0 5 10 15 20 25 30 35 40 45 Percent of households October 2021, following an increase in government assistance in 23 counties affected by drought.17 Food insecurity continues to affect one-third of households. One-third of households continue to go hungry due to a lack of food. Further, the share of households unable to access staple food has increased to 36 percent, with higher rates in rural households (38 percent versus 33 percent in urban households) (Figure B2-3). The proportion of households which are unable to access staple food due to increases in prices has increased sharply to over 50 percent (Figure B2-4). Figure B2-3: Share of households that could not access Figure B2-4: Reason for not being able to access staple food staple food Could not access staple food Reason for not being able to access staple food 45 Percent of hh that couldn't access staple food 80 40 Percent of Households 70 35 30 60 25 50 20 40 15 10 30 5 20 0 10 Jul-Oct '21 Jul-Oct '21 Jul-Oct '21 Jul-Oct '21 Jul-Oct '21 Oct-Nov '20 Oct-Nov '20 Oct-Nov '20 Oct-Nov '20 Oct-Nov '20 July-Sep '20 July-Sep '20 July-Sep '20 July-Sep '20 July-Sep '20 Nov '21-Mar '22 Nov '21-Mar '22 Nov '21-Mar '22 Nov '21-Mar '22 Nov '21-Mar '22 Apr-Jun '21 Apr-Jun '21 Apr-Jun '21 Apr-Jun '21 Apr-Jun '21 Jan-Mar '21 Jan-Mar '21 Jan-Mar '21 Jan-Mar '21 Jan-Mar '21 0 Jul-Sep '20 Oct-Nov '20 Jan-Mar '21 Apr-Jun '21 Jul-Oct '21 Nov '21-Mar '22 Jul-Sep '20 Oct-Nov '20 Jan-Mar '21 Apr-Jun '21 Jul-Oct '21 Nov '21-Mar '22 Jul-Sep '20 Oct-Nov '20 Jan-Mar '21 Apr-Jun '21 Jul-Oct '21 Nov '21-Mar '22 All Poor Non-poor Rural Urban Overall Poverty Status Location Prices have gone up Income has decreased Supply has decreased 16 Coping mechanisms refer to actions that the household has taken in the last 30 days that could be considered actions that help mitigate income losses, for example, reducing food consumption. 17 See for reference the announcement of a new emergency relief cash transfer program, starting in December 2021, to target 2.5 million Kenyans in the 23 ASAL counties affected by droughts in 2021. 14 June 2022 | Edition No. 25 Special Focus SPECIAL FOCUS Photo: © Sarah Farhat | World Bank June 2022 | Edition No. 25 15 Special Focus 3. Education Spending and Priorities after COVID-19 The education sector in Kenya provides education The recommendations of the report focus on ensuring services for over 16 million children and youth, with adequacy, equity and efficiency in the use of resources. In almost 500,000 teachers distributed in close to 90,000 pre- particular, continuing and accelerating the improvements primary, primary and secondary education institutions. in the sector will depend on (i) providing adequate The education system is expanding to accommodate resources to achieve sector objectives and implement more students, especially in pre-school and post-primary ambitious reforms by protecting spending in the short education. Between 2017 and 2019, the number of pre- term, prioritizing actions and mobilizing additional primary schools increased by 11 percent and the number resources in the medium term; (ii) allocating resources of secondary schools by 17 percent, while the number of more equitably, particularly development spending, primary schools only increased marginally. The number teachers and school capitation grants; and (iii) using of Technical and Vocational Education and Training resources efficiently by exploiting data more effectively (TVET) and tertiary education institutions doubled, as in management, particularly at the local level, as well as did enrollment numbers in tertiary. Provision is mostly improving coordination and reducing fragmentation in public; enrollment in public institutions accounts for 70 the management of the sector. percent of total enrollment in pre-primary, 84 percent in primary, 93 percent in secondary and 82 percent in Figure 13: Summary of recommendations tertiary education. Expanding the system, supporting This is a crucial time for the education sector in Kenya. ambitious reforms and improving equity The sector is recovering from the COVID-19 crisis after in outcomes Adequacy Equity Efficiency years of impressive improvements in outcomes, while i. Protecting spending in i. Increased and well 1. Data availability and use implementing ambitious reforms that started before the short term targeted development in management spending the pandemic. The system has expanded significantly ii. Prioritize actions 2. Coordination and ii. Teacher allocation reduced fragmentation in but education spending has kept up with increased iii. Mobilizing resources in management, including the medium term iii. Equity component in consolidating SAGAs enrollments. The country has also embarked on very capitation grants Detailed costing plan with Allocating resources where they Getting more results out of ambitious reforms aimed at improving quality of education, different scenarios are most needed resources including the implementation of a Competency Based Curriculum, reforming teacher professional development, textbook policy and improving management practices at the local level. Education Outcomes Have Improved Significantly Kenya has made impressive efforts in education: The World Bank recently completed a review of public increasing spending, increasing enrollments at all expenditure in education, focused on basic education, levels of education, and consistently improving learning which aims to provide recommendations on how to outcomes before the pandemic, making it one of the top use resources to sustain and accelerate improvements performers in education in the region. Primary education in the sector. The report highlights Kenya’s impressive is almost universal and secondary enrollment increased by achievements in education, explores remaining challenges more than 50 percent in the seven years before the pandemic. in the sector, and proposes ways in which education Recently, the country has emphasized improvements in financing can contribute to achieving ambitious sector quality, embarking on very ambitious reforms to modify the objectives. This KEU special topic provides an overview of curriculum, teacher professional development, textbook the main messages of the forthcoming report. policy and local management practices. 16 June 2022 | Edition No. 25 Special Focus Figure 15: Pupils passing minimum proficiency threshold Figure 14: Trends in gross enrollment rates, 2012-2019 scores in class 3, 2016-18 2012 2013 2014 2015 2016 2017 2018 2016 2018 120 80 69% 70% 70 100 60 53% 80 50 Percent 42% Percent 40 36% 38% 60 30 40 20 20 10 0 0 ECDE Primary Secondary Numeracy English Kiswahili Source: Basic Education Statistical Booklet (2015-2019) Source: Basic Education Statistical Booklet (2015-2019) Note: Proportion of pupils attaining ECED means Early Childhood Development and Education the 50 percent benchmark in test scores for each subject. Learning outcomes have also improved in recent years, The HCI has shown strong correlation with both economic both in numeracy and languages, and Kenya is a good growth and equity. If Kenya aims to continue to grow and performer among countries in the region. Testing in become a more equitable upper middle-income country, class three for mathematics, English and Kiswahili learning it will need to continue to improve access and quality of reveals that between 2016 and 2018, learning improved in education. all three subjects. The share of students meeting minimum Figure 16: Learning adjusted years of schooling and GDP per requirements increased by six percentage points in capita, 2020 numeracy, by 16 points in English, and by one point in 14 Kiswahili. Regionally, Kenya performs well in reading 12 Learning-adjusted years of school outcomes. Numeracy learning was lower in 2018 than in 10 Kenya comparable countries, however, more recently, early grade 8 mathematics assessments (EGMA) taken between 2015 6 and 2021 show that the proportion of children meeting minimum proficiency in mathematics is improving rapidly, 4 increasing from 71 percent in 2016 to 80 percent in 2021. 2 At the secondary level, while end of secondary exam (KCSE) 0 6 7 8 9 10 11 12 passing rates are still low, they have improved since 2017, Log Real GDP per capita at PPP increasing from 11 to 18 percent. Source: World Bank (2020) and EFW (2021) Combining access and learning into Learning-Adjusted These improvements in outcomes are in large part due Years of Schooling (LAYS) shows that Kenya is above to continuously high spending in education, which has what is expected by its level of income. A child in Kenya 18 reached established international benchmarks both as completes, on average, 11.6 years of education, which, a share of total government expenditure (TGE) and as when adjusted by the level of learning relative to other a share of GDP. The share of government expenditure on countries, results in 8.4 effective years of schooling. This education as a share of GDP reached 5.3 percent in 2018, is the highest LAYS in Africa. While Kenya does well for its higher than the average for other lower middle-income and level of income, this does not mean that Kenya should not upper middle-income countries, except for South Africa. aim to further improve both access and, especially, quality The share of the government budget going to education of education in order to improve the LAYS and the World has also increased, reaching 19 percent in 2020. Education Bank’s Human Capital Index (HCI), which aims to measure spending per capita is also relatively high. Compared to the level of development of human capital in a country. its regional peers, education spending per capita is higher 18 Learning adjusted years of schooling is a measure developed by the World Bank which adjusts the expected years of schooling by the learning levels relative to other countries. It is calculated as the expected years of schooling, multiplied by the ratio of harmonized test scores to a benchmark of 625. If the country performs as high as the benchmark on harmonized test scores, then the LAYS will be equal to the expected years of school (EYS). However, in most cases, countries’ harmonized test scores are below the benchmark, thereby multiplying the EYS by a number less than 1, and consequently LAYS tends to be lower than EYS. June 2022 | Edition No. 25 17 Special Focus Figure 17: Government expenditure on education as a share of Figure 18: Government expenditure on education, total (% of GDP and TGE, 2020 GDP), 2019 30 250 Education spending per capita, 2018-19 (US$, constant 2018) STP 28 LSO ZWE GHA Ethiopia (2015) KEN 26 200 COG Education as % of TGE 24 CIV ZZB ZMB SEN 22 Indonesia (2015) 150 Tanzania 20 Malaysia South Africa CMR Learning Ghana Kenya 18 100 SLE BFA TZA SSA TGO 16 LMIC UMIC MRT NER MOZ RWA BEN 14 Vietnam LBR 50 BDI MWI GMB GIN 12 MDG UGA Uganda Rwanda 10 0 1 2 3 4 5 6 7 8 0 500 1,000 1,500 2,000 2,500 3,000 Education as % of GDP GDP per capita 2019 (US$, constant 2018) Source: Education Finance Watch database (October 2020) Source: Calculated from UIS-UNESCO and World Bank Education Finance Watch. Note: LMIC: Lower Middle-Income Country; UMIC: Upper Middle-Income Country Note: Education spending per capita refers to countries in Sub-Saharan Africa with GDP per capita below USD 4,000 and per capita is the pre-primary to tertiary aged population than expected for Kenya’s GDP per capita. Increasing per 3.1. Main challenges remaining in the capita spending in education is a key factor in improving education sector quality. This level of spending is high compared to most The main challenges remaining in the education sector countries, highlighting Kenya’s commitment to education. are increasing the enrollment in post-primary education, improving learning outcomes and reducing deep While the high level of spending in education is a sign of inequalities. Enrollment in primary is almost universal but the commitment to the sector, it also means that these falls sharply when transitioning to secondary education. shares are unlikely to increase further in the future, Fourteen percent of the students who complete grade 8 limiting the ability of the education budget to grow of primary education do not enroll in form 1 of secondary beyond economic growth. While economic growth has 19 and about 40 percent of students who begin grade 1 do rebounded from the COVID-19 shock (as discussed in Part not complete form 4 (grade 12). Sharp drops observed in 1), the pace of growth may nonetheless prove insufficient promotion rates between grades 7 and 8 and between relative to increasing budget pressures. Having embarked form 3 and 4 coincide with the national examinations, in ambitious reforms that imply, among others, a significant which determine progress from primary to secondary and expansion in secondary education, Kenya will therefore from secondary to upper education levels in many SSA need to ensure that resources are used effectively to address countries (MoE, 2018). sector challenges in an efficient and sustainable way. Figure 19: Survival rates in primary and secondary Figure 20: Students reaching minimum competency level, education, 2020 by subject and grade, 2018-19 2009 2014 2018 Grade 3 Grade 7 Grade 10 / Form 2 120 80 68 100 70 59 60 53 80 Percent 50 44 60 40 41 40 37 Percent 40 29 30 20 20 17 20 10 6 0 0 Form 1 Form 2 Form 3 Form 4 Grade 1 Grade 2 Grade 3 Grade 4 Grade 5 Grade 6 Grade 7 Grade 8 0 Kiswahili English Mathematics Science* Source: KNBS (2020) Source: NASMLA Grade 3 (2018), Grade 7 (2019) and MLA Form 2 (2018) Note: Science is not included in Grade 3 as a subject. The graph presents the average for science as the average of Chemistry (24%), Physics (29%) and Biology (8%) in Form 2/ Grade 10. 19 Al-Samarrai, Cerdan-Infantes and Lehe, 2019. 18 June 2022 | Edition No. 25 Special Focus Learning has improved but the share the share of in addition to low access, low learning is also concentrated in students achieving minimum performance levels is those counties. Figure 22 maps the LAYS by county, showing still low, decreasing sharply after grade 3. The National the regional concentration in low outcomes. Assessment System for Monitoring Learner Achievement Figure 22: Map of Learning Adjusted Years of Education by (NASMLA) assesses students in grades 3 and 7 of primary county, 2020 education. The Monitoring Learner Achievement (MLA) assesses students in form 2 of secondary education. In grade 3, approximately 68, 53 and 59 percent of students attained the 50 percent benchmark in each of the achievement tests for Kiswahili, English and Mathematics. The problem of low learning achievement in SSA emerges in the early grades and the teaching of reading is crucial to children’s progress through school.20 As evidenced in Figure Learning-Adjusted Years of School 20, as students progress through the system, the share of 4.54 - 8.14 8.14 - 9.15 those who attain at least the 50 percent benchmark in the 9.15 - 9.53 9.53 - 10.13 10.13 - 11.34 subjects tested decreases significantly. For instance, only Source: World Bank calculations on sub-national Human Capital Index (2020) 29 and 6 percent achieve minimum competency levels in mathematics in grade 7 and form 2 respectively. Learning outcomes in reading are particularly concerning. Nationwide, less than 50 percent of students There are very large regional inequalities in all education achieve the minimum high order proficiency level in outcomes, with very low outcomes concentrated in a reading. In 21 out of the 47 counties, the share is less than a few counties in the north and northeast of the country, third. Reading and comprehension are a foundational skill in arid and semi-arid areas. Figure 21 shows the expected that is required to absorb any curriculum, and thus very years of schooling (EYS) and LAYS, which adjusts the EYS by low reading outcomes are a severe limitation for students the relative learning outcomes in each county. The figure in progressing adequately through the system. This shows that EYS range from almost 14 years in Nyeri to 6.5 shortcoming in reading needs to be addressed urgently if in Garissa, with most counties exceeding 12 EYS, meaning both enrollment and learning outcomes in higher grades that an average student in those counties is expected are going to continue to increase. to complete secondary education. Ten counties have less than 12 EYS. Adjusting for learning reduces effective In addition to differences in learning levels across years of education by 2 years (about 40 percent) across counties, students’ performance differs across schools counties and only Nairobi is near completing 12 years of within counties, and within schools. More than half of the LAYS. Importantly, counties with low EYS also experience the difference in learning performance is attributable to the largest reductions when adjusting for learning, meaning that students within the same schools, which has important Figure 21: Learning Adjusted Years of Education by county, 2020 Learning-Adjusted Years of School Expected Years of School 14 12 10 8 6 4 2 0 Nyeri Kisii Nyamira Kericho Taita Taveta Migori Machakos Kirinyaga Uasin Gishu Elgeyo Marakwet Bomet Embu Nandi Bungoma Kisumu Tharaka Nithi Makueni Kitui Kiambu Nyandarua Nakuru Vihiga Homa Bay Kakamega Siaya Busia Mombasa Nairobi Murang'a Trans Nzoia Baringo Meru Kajiado Lamu Kwale West Pokot Laikipia Tana River Isiolo Samburu Wajir Mandera Turkana Marsabit Garissa Narok Kili Source: World Bank calculations on sub-national Human Capital Index (2020) 20 Bashir, Sajitha, Marlaine Lockheed, Elizabeth Ninan, and Jee-Peng Tan. 2018. Facing Forward: Schooling for Learning in Africa. Africa Development Forum series. Washington, DC. June 2022 | Edition No. 25 19 Special Focus Figure 23: Learning outcomes decomposition for Grade 7 and While gender differences have been reduced in recent Form 2 years in primary education, girls still drop out earlier % variance from counties % variance from schools % variance from students than boys. Gender disparities in school participation are concentrated in the most educationally disadvantaged Form 2 11% 19% 69% counties, mainly in the north-eastern and coastal regions. Barriers to girls’ school participation and retention include poverty and high school fees, poor infrastructure and long distances to schools, insecure learning environments and Grade 7 17% 29% 53% increased exposure to violence and sexual harassment or abuse. Early pregnancy contributes to girls’ higher dropout rates in secondary school (averaging 80.5 births per 1,000 0 20 40 60 80 100 Percent girls under the age of 18). Reasons include poverty and Source: NASMLA Grade 7 (2019) and MLA Form 2 (2018) educational attainment (33 percent of girls 15 to 19 years old with no education have begun childbearing), while policy implications. Targeting of specific counties or teenagers from the poorest households (26 percent) are schools for support is relatively simple but addressing more likely to have begun childbearing than those from inequalities within schools requires a different pedagogical the wealthiest (10 percent). Ensuring adequate access to approach, one that targets instruction to the different water and sanitation in schools can improve education levels of learning of students. These are generally referred outcomes, especially for girls. to as “teaching at the right level” (TARL) and can involve a range of practices (tutoring, grouping of students by Differences in learning outcomes by gender paint a level, use of technology). Importantly, as shown in (Figure 21 mixed picture, with girls performing better than boys in 23), the share of the variance attributed to within school language (Swahili and English) and worse in mathematics differences is higher for form 2 than for grade 7. This shows and science at all levels of education. In third grade, girls that if these within school differences are not addressed outperform boys in all subjects. However, in higher grades, early on, they continue to grow; students who are falling boys outperform girls in mathematics and science, while behind fall farther. Implementing TARL strategies requires girls continue to perform better in English and Kiswahili. measuring learning through formative assessments and The gender gap in mathematics and science grows as implementing differential strategies in the classroom and students progress through the system, indicating that early school, implying holistic on-site support for teachers and actions to correct these gaps are fundamental to address school principals. future gender inequities. Returns to education for science, technology, engineering and math (STEM) programs are also higher, so these differences can lead to life-long wage gaps. Figure 24: Rate of non-enrollment by age and gender 6 to 13 years old 14 to 17 years old Share of out of school among female population 70 60 50 Percentage 40 30 20 10 0 Nyeri Nandi Homa Bay Uasin Gishu Bomet Makueni Kisumu Siaya Kericho Kirinyaga Nyamira Vihiga Kisii Kiambu Kakamega Bungoma Nyandarua Murang'a Elgeyo Marakwet Trans Nzoia Machakos Kitui Nakuru Migori Busia Tharaka Nithi Embu Mombasa Taita Taveta Laikipia Kajiado Lamu Kwale Meru Baringo West Pokot Tana River Isiolo Samburu Marsabit Mandera Turkana Wajir Garissa Narok Nairobi Kili Source: Census 2019 21 See https://www.teachingattherightlevel.org/ for more information on the evidence and the approach. 20 June 2022 | Edition No. 25 Special Focus Figure 25: Percentage difference in the share of students meeting Development spending accounts for only 6 percent of minimum learning standards by gender, subject and grade the total education budget (KNBS, 2020). The share of the Grade 3 Grade 7 Form 2 / Grade 10 budget that goes to development has remained relatively 15 Percentage di erence between girls and boys 12% constant, except for a notable increase in fiscal year 10 7% 8% 7% 2016/17. Over 94 percent of spending covers the recurrent 6% 5 3% costs of education provision. The State Department for 0% Early Learning and Basic Education, together with the TSC, 0 account for 69 percent of the total recurrent expenditure, -5 while University education and TVET account for 22 and -4% -5% -10 -9% 3 percent of the total. Development spending is shared -11% almost equally across primary, secondary and tertiary -15 English Kiswahili Mathematics Science education. In order to expand the system, increase Source: NASMLA Grade 3 (2018), Grade 7 (2019) and MLA Form 2 (2018) enrollments and provide adequate infrastructure, the country will need additional development spending. Education outcomes are much lower in rural areas and for lower income populations. Net enrollment rates There are inequalities in the allocation of teachers. (NER) are significantly higher in pre-primary, primary and While the ratio of teachers to classrooms is relatively equal secondary education for those children from households across counties, the ratio of teachers to students varies in the top 20 percent of the income distribution when significantly. According to national staffing norms, one compared to those in the bottom 20 percent. At the teacher is assigned per primary classroom, irrespective tertiary level, while the gross enrollment rate (GER) for of the number of students. Nonetheless, for those grade youth from non-poor families is 22 percent, it is as low as 3 7 students assessed in 2019, that ratio varied between percent for those from the poorest households. Inequities 0.7 teachers per classroom in Tana River and 2.3 in at the start of the education cycle, whether across gender, Bungoma counties. In secondary, the number of teachers income, or urban/rural setting, consistently grow to large is determined by the subjects taught and administrative gaps by post-secondary, and hence must be addressed at duties for each school. When accounting for the number their inception. of students, however, there are very large disparities. The student to teacher ratios (STR) range across counties Distribution of Resources and Outcomes in Education from 23 to 80 in public primary schools, while in public Addressing the remaining challenges in the sector secondary schools they are lower, ranging from 19 to 43 and reducing inequalities in outcomes will require (Figure 26). more resources, particularly in development spending, distributed more equitably, with a focus on teachers and Despite higher needs, arid and semi-arid counties have school grants. The education budget has not increased a smaller allocation of teachers and lower enrollment significantly in the past two years and development rates overall. In primary education, schools in the most spending is low, limiting the ability to improve infrastructure disadvantaged counties have higher STRs since teacher and quality in lagging regions and schools. Teacher allocation is lower. In secondary education, given lower shortages are particularly concentrated in some areas, student progression and higher dropout rates, the number which tend to be in low performing counties, increasing of students and teachers are among the lowest in the inequalities. In 2018, the Teacher Service Commission (TSC) country. These are the counties with the lowest results in issued a plan to address teacher shortages, which is under terms of access and learning. The TSC has an ambitious implementation.22 School capitation grants could contribute plan to reduce teacher shortages and to try innovative to greater equity by establishing a minimum amount for approaches for areas where teacher shortages are hardest small schools and, to the extent possible, differentiation by to solve (for example, those with conflict), using live socioeconomic characteristics of the population. streaming lessons. 22 Teacher Service Commission, 2018, “Detailed and Costed Strategy for Addressing Teacher Shortage”, Nairobi, Kenya. June 2022 | Edition No. 25 21 Special Focus Figure 26: Average student to teacher ratios and teacher to classroom ratio by county, 2019 STR Teacher classroom ratio 100 2.5 90 80 2.0 70 60 1.5 50 40 1.0 30 20 0.5 10 0 0.0 Tana River Kirinyaga Wajir Murang'a Kitui Makueni Homa Bay Machakos Migori Kajiado Meru Uasin Gishu Samburu Vihiga Laikipia Nyandarua Nyamira Kwale Kisii Elgeyo Marakwet Trans Nzoia Nyeri Baringo Nandi Bomet Mombasa Garissa Mandera Kakamega Siaya Isiolo West Pokot Busia Nakuru Taita Taveta Kisumu Turkana Lamu Marsabit Nairobi Kericho Kiambu Embu Bungoma Tharaka-Nithi Narok Kili Sources: NASMLA (2019) and Ministry of Education (2019) Capitation grants play a crucial role in promoting student amount of KES 1,420 (approximately USD 12) per access to education by eliminating fees and in quality year in primary school and KES 22,244 (approximately USD of education by providing funding directly to schools. 188) in secondary school, with a top-up of KES 2,300 and Capitation grants are a significant and reliable source of KES 35,000 for learners with special needs and disabilities in funding for schools and have been a key contributor to primary and secondary schools. This is a limitation for small the increase in access at primary and secondary. Transfers schools, since the fixed cost of operating a school is likely to schools are divided into two accounts with different to surpass the amount provided, especially for the general amounts: the general services account (to cover the cost purposes grant. The cost of transportation, non-teaching of electricity, phone, transportation, and non-teaching staff, electricity, sanitation, and various other components staff wages) and the school instructional materials account have important fixed costs and are not directly proportional (to cover the cost of textbooks, notebooks, and teacher to the number of students, especially for small schools. guides). The amount is provided on a per student basis, A school with 100 students, for example, would receive based on an average cost of each component of each type approximately KES 68,900 per year for operating the of transfer, and schools receive three tranches a year at the school through the general purpose account, which is beginning of each term (50 percent in the first term, 30 not likely to cover the actual cost. Establishing a minimum percent in the second and 20 percent for the third term). amount for small schools would increase the equity of the capitation grants. There is room to improve the equity of the allocation of capitation grants. The per student amount is the same for The socioeconomic characteristics of the students and all schools and it is considerably larger in secondary schools the conditions at the school also determine the cost than in primary schools. In 2021, schools received a per of provision, especially to achieve the same outcomes. Increasing the capitation amount for schools that start Figure 27: Student to teacher ratios and learning outcomes, 2019 from worse conditions, have a shortage of teachers, or Standardized Mathematics Standardized English serve more disadvantaged students, would also contribute Linear (Standardized Mathematics) Linear (Standardized English) to reducing gaps and inequities in outcomes. This is true 650 Standardized NASMLA Grade 7 Scores both for the general purposes account and the student 600 instructional materials accounts. It is especially relevant in 550 cases where parental contributions for accessory materials 500 are limited or may prevent students from accessing schools. 450 Children from poorer backgrounds need additional support to achieve the same results as better off students. 400 Because smaller schools tend to be in rural areas and serve 350 20 30 40 50 60 70 disadvantaged students, it is important that the criteria for Student teacher ratio in primary capitation grants are revised to increase the amount for Sources: NASMLA (2019) and MoE (2019) these disadvantaged schools. 22 June 2022 | Edition No. 25 Special Focus The contribution of households to education spending 3.2. COVID-19 impact is high despite existing capitation grants for schools. The COVID-19 pandemic has resulted in learning losses In 2018, household spending represented 33 percent of and deepened inequalities in the education sector. total education spending in the country.23 Although more Around 17 million students and more than 320,000 recent data on household spending are not available, teachers were affected by the closure of 30,000 primary contributions likely continue to be high, especially in and secondary schools during 2020. The partial reopening secondary education. The median households were paying of schools began in October 2020, for students in grades less than one tenth of the poverty line for items associated 4, 8 and 12. In January 2021, all education institutions (in with primary enrollment (e.g., books, uniforms, and primary, secondary and tertiary education) fully reopened. tuition), and 50 percent of the poverty line in secondary Efforts to provide remote learning have revealed a enrollment. Since the amount of capitation grants has not significant digital divide, with over 50 percent of students grown in nominal terms in recent years (Figure 28), it is not being able to engage in remote learning opportunities, likely that households continue to contribute significantly mainly due to the lack of appropriate electronic devices, to education spending. access to electricity and internet connectivity.25 Figure 28: Total amount of capitation grants, 2017-2021 Resource allocation to education stagnated while there 14,000 was a shift from important development spending to 12,000 the fight against the pandemic. Between the 2018/19 and 2019/20 fiscal years, the budget allocated to education 10,000 Million KSH (current) increased by 11 percent. However, the allocation only grew 8,000 by 2 percent the following year, to KES 505 billion, before 6,000 slightly decreasing to KES 504 billion in 2021/22. In addition, 4,000 the restrictions related to the COVID-19 pandemic caused delays in the completion of ongoing capital projects 2,000 intended to expand and equip learning institutions, and 0 2017 2018 2019 2020 2021 also impacted the implementation of the CBC and the training of teachers on the new curriculum. Source: Ministry of Education (2021) There are opportunities to improve efficiency in Assessments carried out after school closures show spending by reducing fragmentation, particularly in significant learning losses, especially for those at the semi-Autonomous Government Agencies (SAGA). bottom of the learning distribution.26 Basic skills like Twenty-nine SAGAs housed within all state departments listening, speaking and reading out loud saw large increases play a central role in education management.24 SAGAs in the share of students not meeting expectations (Figure undertake specific development and strategic activities 29), suggesting those at the bottom of the distribution and have administrative and financial independence. They fell further behind on achieving functional literacy. For receive funding from the government, as well from as their more advanced skills like reading comprehension, the own income generating activities. SAGAs do not transact share of students achieving or exceeding expectations via the financial management system (IFMIS) so their decreased from 51 percent to 37 percent, a sharp drop financials are not tracked. The proliferation of SAGAs and of 14 percentage points. Learning losses were observed the fact that they are outside the regular IFMIS presents a among top performers but were much greater at the management challenge in the sector. bottom of the learning achievement distribution. While 23 Ministry of Education (2019), Basic Education Statistical Booklet. 24 Education sector SAGAs include: Education Standards and Quality Assurance Council; Kenya Institute of Curriculum Development (KICD); Kenya National Examinations Council (KNEC); Kenya Education Management Institute (KEMI); Kenya Institute of Special Education (KISE); Jomo Kenyatta Foundation (JKF); Kenya Literature Bureau (KLB); Centre for Mathematics, Science and Technology in Africa (CEMASTEA); Kenya National Commission for UNESCO; National Council for Nomadic Education in Kenya (NACONEK); National Education Board; Technical and Vocational Education and Training Authority (TVETA); TVET Funding Board (TVETFB); TVET Curriculum Development, Assessment and Certification Council (TVET CDACC); Kenya National Qualifications Authority (KNQA); National Commission for Science, Technology and Innovation (NACOSTI); Kenya National Innovation Agency (KENIA); National Research Fund (NRF); Biosafety Appeals Board (BAB); Higher Education Loans Board (HELB); Commission for University Education (CUE); Universities Funding Board (UFB); Kenya Universities and Colleges Central Placement Service Board (KUCCPS); Universities and Constituent Colleges; and The Pan African University of Science, Technology and Innovation (PAUSTI). 25 The high-frequency phone survey on the socio-economic impacts of COVID-19 in Kenya is implemented by the World Bank, in collaboration with the Kenyan National Bureau of Statistics (KNBS) and the United Nations High Commissioner for Refugees (UNHCR) as well as the University of California, Berkeley. 26 The National Assessment Monitoring Learning Achievement (NASMLA) 2019 for Grade 3 English Literacy and the Learning Continuity in Basic Education (LCBE) 2020 for Grade 4 English Literacy were the two most comparable assessments conducted closest to school closures before and after. In fact, they were conducted with the same cohort and measured similar domains. June 2022 | Edition No. 25 23 Special Focus Figure 29: Share of students by level of proficiency, 2019-20 2019 2020 2019 2020 Listening and Speaking Reading Aloud 40 40 36% 31% 32% 29% 29% 31% 30 30 26% 26% 24% 24% 25% 25% Percent Percent 20% 20 19% 20 14% 10 9% 10 0 0 Exceding Meeting Approaching Below Exceding Meeting Approaching Below Expectations Expectations Expectations Expectations Expectations Expectations Expectations Expectations 2019 2020 2019 2020 Reading Comprehension Writing Skills 40 40 36% 33% 33% 33% 31% 30% 30 28% 30 27% 26% 23% 23% Percent Percent 22% 20 18% 20 14% 14% 10% 10 10 0 0 Exceding Meeting Approaching Below Exceding Meeting Approaching Below Expectations Expectations Expectations Expectations Expectations Expectations Expectations Expectations Source: National Assessment Monitoring Learning Achievement (NASMLA) 2019 for Grade 3 English Literacy; Learning Continuity in Basic Education (LCBE) 2020 there are drops of up to 10 percentage points in the share 3.3. Improving education financing of students exceeding expectations, the increase in the to support reforms and address share of students below expectations for each type of skill remaining challenges is 1.5 to 2 times as large. The recommendations of the report focus on ensuring adequacy, equity and efficiency in the use of resources. In Teenage girls are among the most vulnerable particular, continuing and accelerating the improvements populations when considering the impacts of Covid-19 in the sector will depend on (i) providing adequate school closures. 27 Recent evidence shows that girls resources to achieve sector objectives and implement were disproportionately affected by the pandemic. Girls ambitious reforms; (ii) resources being allocated equitably experiencing COVID-19 containment measures had twice where they are most needed and are likely to have the most the risk of falling pregnant prior to completing secondary impact; and (iii) used efficiently through improvements in school, three times the risk of dropping out of school, and management practices at the school level, improving the 3.4 times the risk of school transfer prior to examinations management at the local level and providing extra support relative to pre-COVID-19 learners. Girls in the COVID-19 for regions with the most difficulties. cohort were more likely to be sexually active and less likely to report their first sex as desired. These girls reported increased hours of non-school-related work. Girl-focused interventions are critical to reverse these impacts. 27 Zulaika G, Bulbarelli M, Nyothach E, et al. Impact of COVID-19 lockdowns on adolescent pregnancy and school dropout among secondary schoolgirls in Kenya. BMJ Global Health 2022. 24 June 2022 | Edition No. 25 Special Focus (i) Ensuring an Adequate Level of Financing: ii. Basic education, particularly secondary a. Protecting education spending in the short term education. The reform plans are ambitious and and mobilizing resources to increase spending in will need to be matched by additional resources the medium term. Reforms cannot be implemented for infrastructure, equipment and capitation without adequate resources and there is a risk that grants, among others. This is particularly true the rapid expansion of the student population will for secondary, where the 100 percent transition result in worse quality of education services if the rate target requires resources to enroll and resources do not keep up with enrollment. The retain students through secondary, especially GoK has not reduced spending in recent years and the most vulnerable ones. continuing to protect education spending will iii. ICT and resilience of the system. The COVID-19 be important. A detailed costing of different reform pandemic evidenced the need to ensure scenarios would help prioritize and sequence reforms that the education system is resilient to face to adjust the implementation to available resources. increased uncertainties of crisis, including those b. Prioritizing public spending on expanding access from climate change. There already over two and improving retention in basic education, million devices in schools but less than a third especially development spending, and on of devices are regularly used. Digital content increasing the school grant amount. A realistic and was developed for all grades 1-12 (available at detailed financing strategy for the sector would https://kec.ac.ke) but it is still not widely used. Prioritizing connectivity and teacher training help prioritize and identify trade-offs and actions on ICT is critical to get returns from these in the short and medium term, but some priorities investments in devices and content. In order identified include: to support students broadly in the recovery i. Development spending. Resources are required phase of the crisis, school feeding and school for development expenditures, with a focus on health programs (addressing HIV/AIDs, mental availability of electricity, water and sanitation, health and early pregnancies) are critical for and textbooks in order to improve students’ the retention and well-being of students and retention and performance. teachers, especially the most disadvantaged. Protecting education spending in the short term and mobilizing resources to increase spending in the medium term. Photo: © Billy Kipyegon Mutai | World Bank 28 See Evans and Acosta (2021), How to Recruit Teachers for Hard-to-Staff Schools: A Systematic Review of Evidence from Low- and Middle Income Countries, Center for Global Development. https://www.cgdev.org/sites/default/files/how-recruit-teachers-hard-staff-schools-systematic-review-evidence_0.pdf 29 See Peter Barrett, Alberto Treves, Tigran Shmis, Diego Ambasz, and Maria Ustinova (2019). The Impact of School Infrastructure on Learning A Synthesis of the Evidence, World Bank. June 2022 | Edition No. 25 25 Special Focus (ii) Improving Equity in Financing for more Equitable implemented under a single targeting scheme to Education Outcomes. In order to close gaps in reduce fragmentation and implementation costs. education outcomes, the availability of both physical d. Introducing equity aspects in formula funding at the and human resources needs to improve in regions school level. An effective capitation grants program that are lagging in access and learning. In addition, should have three components: (i) covering the schools with worse infrastructure, fewer teachers and cost of basic provision of services in a reliable more vulnerable populations need more resources per and systematic manner; (ii) accounting for equity student, as both their needs and the cost of serving considerations of providing services in small schools, disadvantaged population groups are larger. in rural areas and for disadvantaged populations a. Improving equity in teacher deployment / allocation. and (iii) providing incentives to improve results Since the deployment of teachers is formally related at the school level. Kenya has made impressive to the number of classrooms, where infrastructure is progress in the basic cost provision, establishing insufficient, so is teacher allocation. There is a need reliable and consistent financing for all schools in to reduce student-teacher ratios in counties with both primary and secondary. Building on this system, extremely high ratios. Salary allowances, hardship Kenya could consider introducing equity aspects in the payments or career rewards have proven effective in formula and introducing results-based mechanisms in some contexts but in regions affected by insecurity, the financing of schools linked to achieving milestones threats of violence and living conditions tend to in their School Improvement Plans. limit the pool of teachers willing to move to these i. Adjusting grants to the higher cost of provision for areas despite the allowances.28 Significant efforts are small schools, schools with poor infrastructure and under way by the TSC to reduce teacher shortages serving poorer students. Rural schools, especially and implementing innovative approaches like live in semi-arid and arid regions, tend to have higher streaming classes in hard to staff areas. cost of provision, as schools are small and distances b. Targeting infrastructure investments to areas necessary to acquire inputs are longer. Minimum with growing demand and those most in need, amounts for small schools should be established to with adequate standards. Infrastructure matters enable them to cover their fixed costs. For increased for both access and learning,29 but both the equity, Kenya could adjust the current financing targeting (where infrastructure is built), the quality formula to better support schools and learners (adequate learning environments, WASH facilities, with the lowest school participation and learning inclusive infrastructure) and proper maintenance outcomes, and schools for special needs learners. are key to maximize the return of infrastructure ii. Introducing results in the allocation of school investment. The GOK has carried out an assessment capitation grants. While existing evidence on the of infrastructure needs in the country. Addressing impact of results-based financing (RBF) in school those needs is crucial to ensure access and improve financing is scarce, it suggests that the use of RBF equity in the sector. in school financing can lead to improvements c. Consolidating bursary and scholarship programs in results especially when it is accompanied by and expanding coverage (including a school complementary interventions such as supporting kit), and a structured mentorship program could school management.30 The design of the results also support the retention and transition from primary matters; results should be verifiable, emphasizing to secondary schools, particularly for those girls the importance of reliable data, and be under the from the poorest households. Different bursary and control of schools. scholarships programs could be consolidated and 30 Lee and Medina (2020). Results-Based Financing in Education: Learning from What Works. REACH, World Bank. 26 June 2022 | Edition No. 25 Special Focus (iii) Increase efficiency in spending. While adequacy b. Improving coordination among state departments, and equity in financing are two crucial objectives, TSC and SAGAs. There is a need to strengthen since resources are limited, there is a need to increase coordination for effective implementation of the efficiency, prioritize actions and increase the impact of National Educational Sector Support Program current funding, especially school grants. (NESSP) and for collaboration with county a. Improve data availability and use in management. governments, the private sector, development Kenya needs to complete the harmonization of partners and other stakeholders implementing the different education data for improved sectoral various programs. Kenya lacks a national education planning. At present there is no data harmonization account system that could improve the practice for pre-school, primary, secondary, TVET and of public financial management at all levels. This university levels, as well as across different areas such should be a priority to ensure coordination of as financing and learning outcomes. This affects resources from government, non-government and planning and policy implementation. Increased data constituency development funds (CDFs). availability, however, is not enough to elicit change c. Streamlining SAGAs. There is also scope for improved if data are not used effectively across the sector. efficiency and better coordination of SAGAs by The evidence on the importance of management streamlining their functions. Consolidation of practices to achieve education results is growing.31 SAGAs into three main areas could take place There is a need to improve the use of data at all according to their backgrounds and mandates: levels, starting with school planning.32 At the central innovation and research, funding for university level, using information about the needs of schools education, and vocational education qualifications is crucial in the implementation of policies. and frameworks. Improve data availability and use in management. Kenya needs to complete the harmonization of the different education data for improved sectoral planning Photo: © Billy Kipyegon Mutai | World Bank 31 Adelman, Melissa; Lemos, Renata. 2021. Managing for Learning: Measuring and Strengthening Education Management in Latin America and the Caribbean. International Development in Focus. Washington, DC: World Bank. 32 Cerdán-Infantes, P., & Zavala, F. 2017. Reporte del Monitor Escolar. Bogotá: World Bank; de Hoyos, Rafael; Ganimian, Alejandro J.; Holland, Peter. 2017. Teaching with the Test: Experimental Evidence on Diagnostic Feedback and Capacity Building for Public Schools in Argentina. Policy Research Working Paper; No. 8261. World Bank, Washington, DC. June 2022 | Edition No. 25 27 REFERENCES Al-Samarrai, Cerdan-Infantes and Lehe, 2019. Mobilizing Resources for Education and Improving Spending: Effectiveness Establishing Realistic Benchmarks Based on Past Trends. Policy Research Working Paper 8773. Washington, DC: World Bank. Adelman, Melissa; Lemos, Renata. 2021. Managing for Learning: Measuring and Strengthening Education Management in Latin America and the Caribbean. International Development in Focus. Washington, DC: World Bank. Bashir, Sajitha, Marlaine Lockheed, Elizabeth Ninan, and Jee-Peng Tan. 2018. Facing Forward: Schooling for Learning in Africa. Africa Development Forum series. Washington, DC. Cerdán-Infantes, P., & Zavala, F. 2017. Reporte del Monitor Escolar. Bogotá: World Bank; de Hoyos, Rafael. Evans and Acosta (2021), How to Recruit Teachers for Hard-to-Staff Schools: A Systematic Review of Evidence from Low- and Middle-Income Countries, Center for Global Development. https://www.cgdev.org/sites/ default/files/how-recruit-teachers-hard-staff-schools-systematic-review-evidence_0.pdf Energy and Petroleum regulatory Authority (EPRA). 2022. Maximum retail petroleum prices in Kenya for the period 15th March to 14th April 2022. Ganimian, Alejandro J.; Holland, Peter. 2017. Teaching with the Test: Experimental Evidence on Diagnostic Feedback and Capacity Building for Public Schools in Argentina. Policy Research Working Paper; No. 8261. World Bank, Washington, DC. International Monetary Fund (IMF). 2020. Kenya Country Report No. 20/156: Kenya National Bureau of Statistics. 2022. “Economic Survey 2022”. Lee and Medina (2020). Results-Based Financing in Education: Learning from What Works. REACH, World Bank. Ministry of Education (2019), Basic Education Statistical Booklet. Peter Barrett, Alberto Treves, Tigran Shmis, Diego Ambasz, and Maria Ustinova (2019). The Impact of School Infrastructure on Learning: A Synthesis of the Evidence, World Bank. The National Treasury and Planning. 2022. “Medium Term Budget Policy Statement”. February 2022. Nairobi. The National Treasury. 2022. Quarterly Economic and Budgetary Review. Third Quarter, Financial Year 2021/2022, period ending 31st March, 2022. The National Treasury and PlanNing, 2022. 2021/22 Supplementary Budget Estimates. Teacher Service Commission, 2018, “Detailed and Costed Strategy for Addressing Teacher Shortage”, Nairobi, Kenya. World Bank. (2022) “Africa's Pulse: Boosting Resilience: The Future of Social Protection in Africa” Washington, D.C., April 2022: https://openknowledge.worldbank.org/handle/10986/37281. World Bank. (2022). “Global Economic Prospects”, Washington, D.C., January 2021: https://www.worldbank.org/ en/publication/global-economic-prospects Zulaika G, Bulbarelli M, Nyothach E, et al. 2022. Impact of COVID-19 lockdowns on adolescent pregnancy and school dropout among secondary schoolgirls in Kenya. BMJ Global Health 2022. 28 June 2022 | Edition No. 25 ANNEX TABLES Table A1: Selected economic indicators, 2019-2024 2019 2020 2021 2022 2023 2024 Act. Act. Act. Proj. Proj. Proj. Output and prices (Annual percentage change, unless otherwise indicated) Real GDP 5.2 -0.3 7.5 5.5 5.0 5.3 Agriculture 2.7 4.6 -0.2 1.3 3.8 4.2 Industry 4.0 3.3 7.2 3.5 3.6 4.3 Services 6.7 -1.8 9.5 7.4 5.8 5.9 Private consumption 3.8 -1.9 4.6 4.0 3.7 3.9 Government consumption 5.6 3.0 5.7 6.6 5.3 5.2 Gross fixed capital investment 4.5 2.5 10.9 7.0 7.5 8.1 Exports, goods and services -3.2 -8.8 12.9 6.2 7.4 7.8 Imports, good and services 1.8 -9.2 18.9 6.8 8.3 8.3 GDP deflator 3.1 3.5 3.7 4.0 4.2 4.5 CPI (period average) 5.2 5.3 6.1 7.0 5.5 5.0 Money and credit (Annual percentage change, unless otherwise indicated) Broad money (M3) 5.6 13.2 6.1 .. .. .. Credit to non-government sector 7.1 8.4 8.6 .. .. .. Policy rate (CBR) 8.9 7.2 7.0 .. .. .. NPLs (percent of total loans) 12.0 14.1 13.9 .. .. .. Central government (fiscal year i.e 2019 = 2019/20) (Percent of GDP, unless otherwise indicated) Total revenue & grants 16.5 16.0 17.3 17.7 18.4 18.4 Tax revenues 16.4 15.7 16.8 17.4 18.1 18.1 Non-tax revenues 3.3 3.6 3.5 2.9 2.8 2.9 Grants 0.2 0.3 0.5 0.3 0.3 0.3 Expenditure 24.2 24.2 25.4 23.7 22.8 22.2 Current 15.5 15.8 17.1 15.7 15.1 14.8 Capital 5.6 4.9 5.1 5.1 5.0 5.0 Primary balance -3.4 -3.8 -3.3 -1.1 0.2 0.5 Overall balance including grants -7.5 -8.2 -8.1 -6.0 -4.4 -3.9 Financing 4.2 5.5 5.3 4.1 3.1 3.3 Net domestic borrowing 3.2 2.8 2.8 2.0 1.2 0.5 Foreign financing 3.2 2.9 3.3 2.0 1.2 0.5 Public debt stock (fiscal year i.e 2019 = 2019/20) (Percent of GDP, unless otherwise indicated) Public gross nominal debt 63.0 68.2 68.1 67.5 64.9 62.1 External debt 33.1 35.4 33.9 32.6 30.5 27.9 Domestic debt 29.9 32.7 34.2 34.9 34.4 34.2 Memo: GDP at current market prices (KES billion) 10,238 10,716 12,098 13,760 15,373 15,374 Source: World Bank, based on data from Kenya National Bureau of Statistics, National Treasury and Central Bank of Kenya Table A2: GDP growth rates for Kenya and EAC (2015-2021) 2015 2016 2017 2018 2019 2020 2021e Kenya 5.7 4.2 3.8 5.6 5.2 -0.3 7.5 Uganda 5.2 4.8 3.8 6.3 6.4 3.0 3.2 Tanzania 6.2 6.9 6.8 5.4 5.8 2.0 4.3 Rwanda 8.9 6.0 4.0 8.6 9.5 -3.4 10.1 Burundi -3.9 -0.6 0.5 1.6 1.8 0.3 2.0 EAC 4.4 5.5 4.6 6.5 6.7 0.3 6.3 Source: World Bank Note: “e” denotes an estimate EAC Average excludes South Sudan Table A3: Kenya annual GDP (2010-2021) GDP, GDP, 2016 GDP/capita, Years GDP growth current prices constant prices current prices KSh Millions KSh Millions US$ Percent 2010 3,598,000 5,794,000 952 8.1 2011 4,163,000 6,090,000 972 5.1 2012 4,767,000 6,368,000 1,137 4.6 2013 5,311,000 6,610,000 1,210 3.8 2014 6,004,000 6,942,000 1,316 5.0 2015 6,884,318 7,287,024 1,337 5.0 2016 7,594,064 7,594,064 1,411 4.2 2017 8,483,396 7,885,521 1,811 3.8 2018 9,340,307 8,330,891 1,987 5.6 2019 10,237,727 8,756,946 2,110 5.1 2020 10,716,034 8,735,040 2,068 (0.3) 2021 12,098,200 9,391,684 2,236 7.5 Source: Kenya National Bureau of Statistics and World Development Indicators June 2022 | Edition No. 25 31 Table A4: Contribution by sub-sectors (percentage points) Industry by sub sector contribution Services by subsector contribution 32 Year Quarterly Agriculture Industries Accommo- Information Services Mining and Electricity and Transport and Financial and Manufacturing Construction dation and Real estate and communi- Education Other quarrying water supply storage insurance restaurant cation Q1 0.8 0.0 0.6 0.1 0.2 0.9 0.0 0.5 0.4 0.2 0.1 0.9 1.0 3.1 Q2 1.0 -0.2 0.6 0.1 0.4 0.9 0.0 0.5 0.4 0.2 0.1 0.9 0.7 2.8 2015 Q3 0.8 -0.3 0.7 0.1 0.5 0.9 0.1 0.5 0.5 0.4 0.1 0.8 0.9 3.2 Q4 1.1 -0.5 0.3 0.0 0.5 0.4 0.1 0.8 0.6 0.3 0.0 0.9 0.7 3.5 June 2022 | Edition No. 25 Q1 0.3 -0.2 0.3 0.1 0.3 0.6 0.1 0.8 0.8 0.2 0.1 0.2 0.6 2.8 Q2 0.4 -0.1 0.3 0.1 0.2 0.4 0.0 0.7 0.9 0.2 0.1 0.1 0.9 2.8 2016 Q3 0.2 -0.1 0.0 0.1 0.3 0.3 0.1 0.9 0.9 0.3 0.1 0.4 1.1 3.8 Q4 0.2 0.0 0.1 0.1 0.4 0.6 0.1 0.8 0.9 0.3 0.1 0.4 1.1 3.6 Q1 0.0 0.0 0.3 0.1 0.5 0.9 0.0 0.8 0.7 0.2 0.4 0.2 1.1 3.5 Q2 -0.5 0.1 0.0 0.1 0.2 0.4 0.1 0.5 0.6 0.2 0.4 0.4 1.1 3.3 2017 Q3 -0.1 0.0 -0.1 0.1 0.3 0.3 0.1 -0.2 0.6 0.2 0.4 0.3 1.2 2.7 Q4 -0.4 0.0 0.1 0.1 0.3 0.4 0.2 0.3 0.6 0.2 0.4 0.3 1.0 3.0 Q1 0.9 0.0 0.5 0.1 0.3 1.0 0.2 0.4 0.6 0.2 0.4 0.2 0.9 2.9 Q2 1.1 0.0 0.3 0.1 0.4 0.7 0.1 0.7 0.6 0.2 0.3 0.1 1.2 3.2 2018 Q3 1.1 -0.1 0.2 0.1 0.4 0.6 0.1 0.6 0.6 0.2 0.3 0.1 1.3 3.2 Q4 1.3 -0.1 0.3 0.1 0.2 0.5 0.2 0.8 0.7 0.3 0.3 0.5 1.4 4.1 Q1 1.0 0.0 0.2 0.1 0.3 0.6 0.2 0.7 0.7 0.2 0.2 0.5 0.9 3.4 Q2 0.7 0.1 0.4 0.0 0.4 0.9 0.1 0.9 0.7 0.2 0.2 0.7 1.3 4.0 2019 Q3 0.2 0.0 0.2 0.0 0.4 0.8 0.1 0.5 0.7 0.2 0.3 0.8 1.1 3.7 Q4 0.2 0.1 0.1 0.0 0.4 0.5 0.2 0.5 0.6 0.2 0.4 0.4 0.9 3.2 Q1 0.9 0.1 0.1 0.0 0.5 0.7 -0.2 0.2 0.4 0.2 0.2 0.4 0.9 2.3 Q2 1.6 0.0 -0.5 -0.1 0.3 -0.2 -0.6 -1.7 0.3 0.1 -1.0 0.2 -1.2 -3.7 2020 Q3 -0.7 0.0 -0.2 0.0 0.6 0.5 -0.7 -1.1 0.4 0.2 -0.8 0.3 -0.7 -2.4 Q4 1.6 0.1 0.4 0.1 0.8 1.4 -0.8 -0.6 0.5 0.2 -0.2 0.9 0.0 0.0 Q1 0.1 0.1 0.2 0.1 0.4 0.8 -0.3 -0.8 0.6 0.3 0.5 0.9 0.4 1.7 Q2 -0.1 0.1 0.9 0.2 0.4 1.6 0.4 1.6 0.8 0.5 1.2 1.4 2.2 8.1 2021 Q3 0.1 0.2 0.9 0.2 0.4 1.6 0.5 1.4 0.8 0.1 1.2 1.0 1.5 6.6 Q4 -0.2 0.3 0.4 0.1 0.4 1.2 0.6 0.6 0.6 0.2 0.8 0.9 1.4 5.1 Source: World Bank, based on data from Kenya National Bureau of Statistics Note: Other = Wholesale and retail trade + Public admistration + Proffessional, admistration and support services + Education + Health +Other services + FISIM Table A5: National fiscal position Actual (percent of GDP) 2017/18 2018/19 2019/20 2020/21 2021/22** Revenue and grants 17.4 17.7 16.5 16.0 17.3 Total revenue 17.1 17.5 16.4 15.7 16.8 Tax revenue 15.3 15.4 14.8 13.8 14.3 Income tax 7.2 7.0 6.7 6.1 6.5 VAT 4.0 4.2 3.6 3.6 3.8 Import duty 1.1 1.1 0.9 1.0 0.9 Excise duty 1.9 2.0 1.8 1.9 2.1 Other revenues 1.2 1.0 1.8 1.2 1.1 Railway levy 0.0 0.0 0.0 0.0 0.0 Appropriation in aid 1.8 2.1 1.5 2.0 2.5 Grants 0.3 0.2 0.2 0.3 0.5 Expenditure and net lending 24.1 25.0 24.2 24.2 25.4 Recurrent 15.1 15.7 15.5 15.8 17.1 Wages and salaries 4.4 4.3 4.2 4.3 4.2 Interest payments 3.6 3.9 4.1 4.4 4.8 Other recurrent 7.1 7.6 7.2 7.1 8.1 Development and net lending 5.3 5.6 5.6 4.9 5.1 County allocation 3.7 3.7 3.1 3.5 3.2 Parliamentary service 0.3 0.3 0.3 0.3 0.3 Judicial service 0.1 0.1 0.1 0.1 0.1 Equalization of funds - 0.1 - - 0.1 Fiscal balance Deficit including grants (cash basis) -7.0 -7.3 -7.5 -8.2 -8.1 Financing 7.1 7.4 7.4 8.4 8.1 Foreign financing 4.0 4.3 3.2 2.8 2.8 Domestic financing 3.1 3.1 4.2 5.5 5.3 Total public debt (gross) 56.5 59.6 63.0 68.2 68.1 External debt 28.7 31.0 33.1 35.4 33.9 Domestic debt 27.8 28.6 29.9 32.7 34.2 Memo: GDP (Fiscal year current market prices, Ksh bn) 8,922 9,746 10,621 11,353 12,646 Source: 2022 Draft Budget Policy Statement (BPS) and Quarterly Budgetary Economic Review (first quarter, Financial Year 2021/2021), National Treasury Note: *indicate Preliminary results; ** projection June 2022 | Edition No. 25 33 34 Table A6: 12-months cumulative balance of payments BPM6 Concept (US$ million) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 A. Current Account, n.i.e. (1,701) (2,423) (3,921) (4,391) (5,427) (6,442) (4,415) (4,036) (5,685) (5,048) (5,541) (4619) (6027) Merchandise A/C (4,948) (6,234) (8,354) (9,314) (10,220) (10,775) (8,368) (7,692) (10,186) (10,201) (10,679) (8430) (11439) Goods: exports f.o.b. 4,530 5,230 5,835 6,213 5,870 6,155 5,963 5,746 5,801 6,088 5,872 6,062 6,730 June 2022 | Edition No. 25 Goods: imports f.o.b. 9,479 11,464 14,189 15,527 16,089 16,929 14,331 13,437 15,987 16,289 16,551 14,492 18,169 Oil 2,192 2,673 4,082 4,081 3,838 4,026 2,500 2,086 2,728 3,386 3,310 2,185 3,480 Services 1,091 1,710 1,893 2,429 2,318 1,676 1,315 1,432 1,556 1,596 1,767 355 740 Services: credit 2,914 3,789 4,131 4,990 5,130 5,023 4,633 4,164 4,648 5,477 5,621 3,732 4,859 Services: debit 1,822 2,079 2,239 2,561 2,813 3,347 3,319 2,732 3,092 3,881 3,854 3,377 4,120 Income 2,156 2,101 2,540 2,494 2,475 2,657 2,638 2,223 2,945 3,557 3,371 3,456 4,673 B. Capital Account, n.i.e. 261 240 235 235 158 275 262 205 184 263 208 131 195 C. Financial Account, n.i.e. (3,782) (3,252) (3,425) (5,565) (5,204) (7,398) (3,826) (5,186) (5,563) (6,547) (6,233) (3,023) (5,331) Direct investment: net (1,452) (1,117) (1,364) (1,142) (920) (746) (379) (523) (1,010) (1,463) (1,132) (499) 4 Portfolio investment: net (81) (156) 1 (218) (273) (3,716) 155 350 789 (627) (1,312) 1,279 (135) Financial derivatives: net - - - - - - (16) 11 4 11 (5) (73) (35) Other investment: net (2,249) (1,979) (2,062) (4,205) (4,011) (2,936) (3,603) (5,012) (5,342) (4,457) (3,789) (3,730) (5,166) D. Net Errors and Omissions (1,227) (894) (635) (186) 434 221 18 (1,238) (166) (720) 154 38 1288 E. Overall Balance (1,115) (174) 896 (1,223) (369) (1,453) 293 (106) 108 (1,030) (1,059) 1,427 -788 F. Reserves and Related Items 1,115 174 (896) 1,223 369 1,453 (293) 106 (108) 1,030 1,059 (1,426.8) 787.7 Reserve assets 1,322 154 246 1,455 859 1,333 (360) 39 (228) 885 905 (818.5) 1,127.5 Credit and loans from the IMF 199 (34) 284 193 177 (119) (66) (67) (120) (145) (154) 608.3 846.7 Exceptional financing 8 13 858 38 312 - - - - - - - (507) Gross Reserves (US$ million) 5,064 5,123 6,045 7,160 8,483 9,738 9,794 9,588 9,646 11,516 12,851 12,992 14,199 Official 3,847 4,002 4,248 5,702 6,560 7,895 7,534 7,573 7,332 8,231 9,116 8,297 9,491 Commercial Banks 1,217 1,121 1,797 1,458 1,923 1,843 2,259 2,015 2,314 3,286 3,735 4,695 4,708 Imports cover (36 months import) 3.9 3.9 3.7 4.3 4.5 5.1 4.8 5.0 5 5 6 5 6 Memo: Annual GDP at Current prices (US$ million) 37,022 45,410 46,874 56,394 61,667 68,287 70,120 74,815 82,036 92,203 100,418 100,667 110,347 Source: Central Bank of Kenya Table A7: Inflation Year Month Overall Inflation Food Inflation Energy Inflation Core Inflation January 4.7 1.6 12.1 3.4 February 4.1 1.1 11.4 3.1 March 4.4 2.8 8.8 3.1 April 6.6 8.2 7.5 3.1 May 5.5 6.3 6.7 3.0 June 5.7 7.0 6.3 2.9 2019 July 6.3 8.5 6.2 2.7 August 5.0 7.1 4.0 2.3 September 3.8 6.3 1.3 2.1 October 5.0 8.7 1.5 1.9 November 5.6 9.6 2.3 1.9 December 5.8 10.0 2.5 1.8 January 5.8 14.9 4.7 2.2 February 6.4 9.6 5.5 2.3 March 5.5 11.9 4.5 1.9 April 5.6 11.6 4.9 2.0 May 5.3 10.6 5.0 1.8 June 4.6 8.2 5.4 1.6 2020 July 4.4 6.6 6.1 2.0 August 4.4 5.4 7.6 2.1 September 4.2 5.2 7.6 1.9 October 4.8 5.8 8.2 2.5 November 5.3 6.1 7.8 2.9 December 5.6 7.2 8.1 2.9 January 5.7 7.4 8.7 2.7 February 5.8 6.9 10.1 2.7 March 5.9 6.7 11.1 2.7 April 5.8 6.4 10.5 2.7 May 5.9 7.0 10.0 2.8 June 6.3 8.5 9.5 2.8 2021 July 6.4 8.8 8.2 3.0 August 6.6 10.7 6.5 2.7 September 6.9 10.6 7.6 2.9 October 6.5 10.6 7.0 2.4 November 5.8 9.9 7.2 2.0 December 5.7 9.1 7.2 1.9 January 5.4 8.9 6.0 1.9 February 5.1 8.7 4.7 2.0 2022 March 5.6 9.9 4.3 2.2 April 6.5 12.2 6.2 2.4 May 7.1 12.4 6.2 2.6 Source: World Bank, based on data from Kenya National Bureau of Statistics June 2022 | Edition No. 25 35 36 Table A8: Credit to private sector growth (%) Total Private Building and Transport and Finance and Mining and Private house- Consumer Business Other Year Month sector annual Agriculture Manufacturing Trade Real estate construction communication insurance quarrying holds durables services activities growth rates January 3.0 -0.2 6.5 6.6 1.4 -6.5 15.4 -2.6 -14.5 5.6 15.4 0.0 -27.2 February 3.4 -2.6 7.7 6.4 2.6 -0.7 13.1 -2.9 -13.4 6.6 16.1 0.3 -33.1 March 4.3 0.2 7.2 8.7 -7.0 5.7 10.2 -0.1 -11.4 8.0 13.9 -0.4 -31.7 April 4.9 2.5 7.9 8.4 -6.5 6.4 13.3 -0.7 -12.5 7.9 16.4 1.1 -29.6 May 4.4 2.7 6.5 7.6 -4.1 6.2 6.7 -0.5 -7.9 7.8 18.0 -1.2 -32.0 June 5.2 3.9 11.4 5.5 -6.3 5.8 4.7 1.0 -4.3 7.6 21.3 -3.2 -22.6 June 2022 | Edition No. 25 2019 July 6.1 7.6 10.3 8.0 -5.4 6.4 5.3 0.5 -13.5 7.1 23.6 1.6 -17.2 August 6.3 6.6 7.5 8.4 -6.0 5.8 8.2 2.4 -10.8 8.6 23.0 -0.1 -14.4 September 7.0 5.5 7.5 7.6 -5.3 5.0 14.5 2.2 -5.1 8.8 28.4 3.2 -13.6 October 6.6 -5.2 6.4 10.2 -5.5 4.8 15.1 0.4 0.1 5.3 28.6 -0.4 12.7 November 7.3 -6.1 7.5 8.8 -6.1 9.8 15.8 1.9 -3.2 6.1 25.9 -0.3 30.9 December 7.1 -2.4 9.2 8.9 1.6 8.1 0.4 1.5 -5.8 5.6 26.0 2.4 16.0 January 7.3 -4.8 12.7 6.0 4.0 9.9 -1.1 3.5 -9.4 5.6 21.4 1.5 24.4 February 7.7 0.2 10.4 9.5 -0.5 7.4 1.9 3.4 -14.6 5.9 20.6 2.4 33.4 March 8.9 1.4 15.3 9.4 9.5 7.1 6.6 2.2 3.9 3.4 24.1 3.3 36.8 April 9.0 2.8 20.1 10.3 7.7 9.1 3.1 4.8 11.0 2.2 19.6 1.2 14.3 May 8.2 2.6 18.2 8.0 5.7 5.7 8.4 4.4 5.8 3.2 16.7 2.7 16.9 June 7.7 2.2 11.1 9.4 4.6 14.9 3.2 4.9 10.0 3.6 15.2 5.3 -3.7 2020 July 7.9 1.1 10.0 9.1 5.5 20.7 3.5 5.0 11.3 5.4 13.8 3.2 -6.7 August 8.3 0.9 13.1 8.1 5.2 19.0 4.6 6.8 12.0 5.1 13.7 3.4 -7.6 September 7.6 1.7 12.6 6.6 4.1 20.6 -3.3 6.6 8.2 3.5 15.6 4.1 -5.8 October 7.7 17.0 7.8 2.5 8.2 21.1 -2.2 7.6 -14.2 7.3 15.7 5.9 -10.4 November 8.3 19.3 10.0 4.0 7.4 17.5 0.2 9.1 -15.4 6.2 18.8 2.7 -14.5 December 8.3 15.3 12.0 3.8 3.4 13.6 7.1 8.7 -12.9 4.3 18.1 4.0 14.0 January 9.3 15.6 12.6 5.5 2.5 14.4 14.0 8.8 -6.1 4.7 18.7 6.5 5.8 February 9.6 13.4 15.8 3.9 5.2 19.0 9.0 8.8 21.6 4.2 20.3 5.0 3.8 March 7.7 12.3 10.7 2.1 2.9 17.4 7.5 7.7 -3.6 2.9 17.6 5.7 5.2 April 6.7 10.0 4.0 0.9 3.4 13.3 7.6 5.8 -8.8 4.5 19.3 7.2 24.3 May 7.1 4.3 1.5 3.8 4.5 16.3 6.7 5.7 -18.1 3.1 22.0 6.9 39.8 June 7.7 3.7 8.1 1.9 2.0 11.8 11.5 4.0 -13.0 3.2 23.4 5.2 65.2 2021 July 6.1 2.8 9.4 1.3 0.4 0.2 8.9 3.2 -22.1 2.4 21.7 4.9 58.0 August 7.0 1.4 9.3 2.7 1.7 11.8 7.7 2.8 -23.1 2.0 20.1 5.8 56.0 September 7.7 3.3 9.8 4.7 0.5 10.9 11.7 2.9 -8.4 2.6 17.6 7.6 59.5 October 7.8 2.7 10.9 5.5 -0.5 9.6 8.9 2.4 6.2 2.7 16.5 8.2 64.1 November 7.7 1.3 11.5 6.1 2.8 8.3 7.1 1.1 8.3 3.3 15.3 10.8 55.2 December 8.6 0.5 13.1 8.5 1.9 14.3 5.8 0.6 42.9 3.7 15.0 9.5 38.9 January 8.8 1.3 9.7 9.6 2.9 20.7 3.5 0.5 24.9 4.3 14.6 8.4 46.8 2022 February 9.1 3.0 7.6 8.9 7.9 24.1 3.6 0.7 -10.7 5.0 14.0 11.6 49.7 Source: Central Bank of Kenya Table A9: Mobile payments Number of Number of Value of Year Month Number of agents customers transactions transactions (Millions) (Millions) (Billions) January 201,336 40.3 154.2 368.0 February 212,252 50.0 144.5 328.2 March 226,957 50.4 161.4 368.4 April 230,220 52.0 155.8 360.2 May 224,825 52.2 153.3 364.3 June 222,484 46.8 149.7 346.8 2019 July 222,087 53.9 153.0 366.4 August 222,479 54.8 151.8 368.5 September 224,959 55.7 151.2 365.9 October 223,176 56.3 156.1 366.9 November 222,211 58.0 153.1 359.3 December 224,108 58.4 155.0 382.9 January 231,292 59.2 150.2 371.9 February 235,543 58.7 148.5 350.5 March 240,261 58.7 150.7 364.5 April 242,275 59.4 125.0 308.0 May 243,118 60.2 135.9 357.4 June 237,637 61.7 143.1 392.2 2020 July 234,747 62.1 157.8 451.0 August 252,703 62.8 163.2 473.5 September 263,200 64.0 163.3 483.2 October 273,531 65.3 174.1 528.9 November 275,960 65.8 170.0 526.8 December 282,929 66.0 181.4 605.7 January 287,410 66.6 173.9 590.4 February 294,111 67.2 164.2 568.0 March 293,403 65.9 182.3 537.8 April 294,706 67.1 173.4 502.2 May 298,883 67.8 180.8 536.7 June 301,457 67.8 175.8 532.6 2021 July 303,718 68.5 184.0 588.0 August 304,822 68.1 184.5 586.5 September 305,831 67.7 180.9 585.4 October 295,105 66.9 190.1 618.1 November 299,053 67.2 186.0 601.0 December 298,272 68.0 189.8 622.1 January 299,860 68.28 181.8 585.8 February 301,108 67.94 171.4 568.7 2022 March 302,837 68.62 195.8 664.3 April 295,237 68.72 188.2 663.5 Source: Central Bank of Kenya June 2022 | Edition No. 25 37 Table A10: Exchange rate Year Month USD UK Pound Euro January 101.6 130.8 116.0 February 100.2 130.3 113.8 March 100.4 132.3 113.5 April 101.1 131.8 113.6 May 101.2 130.1 113.2 June 101.7 128.8 114.7 2019 July 103.2 128.8 115.8 August 103.3 125.6 115.0 September 103.8 128.2 114.4 October 103.7 133.7 114.4 November 102.4 132.0 113.2 December 101.0 132.9 112.7 January 101.1 132.1 112.3 February 100.8 130.8 109.9 March 103.7 128.5 114.7 April 106.4 131.9 115.6 May 106.7 131.3 116.1 June 106.4 133.4 119.8 2020 July 107.3 135.3 122.5 August 108.1 141.9 127.8 September 108.4 140.9 128.0 October 108.6 140.9 127.9 November 109.2 144.1 129.1 December 110.6 148.4 134.3 January 109.8 149.7 133.8 February 109.7 151.8 132.6 March 109.7 152.2 130.9 April 107.9 149.3 129.1 May 107.4 151.1 130.4 June 107.8 151.4 130.1 2021 July 108.1 149.4 127.9 August 109.2 150.9 128.6 September 110.2 151.5 129.8 October 110.9 151.6 128.6 November 111.9 151.0 127.9 December 112.9 150.2 127.6 January 113.4 153.6 128.4 February 113.7 153.7 128.8 2022 March 114.3 151.0 126.2 April 115.4 150.1 125.5 May 116.3 145.1 122.9 Source: Central Bank of Kenya 38 June 2022 | Edition No. 25 Table A11: Nairobi securities exchange (NSE 20 Share Index, Jan 1966=100, End - month) Year Month NSE 20 share index January 2,958 February 2,894 March 2,846 April 2,797 May 2,677 June 2,633 2019 July 2,628 August 2,468 September 2,432 October 2,643 November 2,619 December 2,654 January 2,600 February 2,338 March 1,966 April 1,958 May 1,938 June 1,942 2020 July 1,804 August 1,795 September 1,852 October 1,784 November 1,760 December 1,868 January 1,882 February 1,916 March 1,846 April 1,867 May 1,872 June 1,928 2021 July 1,974 August 2,021 September 2,031 October 1,961 November 1,871 December 1,903 January 1,889 February 1,887 2022 March 1,847 April 1,801 Source: Central Bank of Kenya June 2022 | Edition No. 25 39 Table A12: Central bank rate and Treasury bills Year Month Central Bank Rate 91-Treasury Bill 182-Treasury Bill 364-Treasury Bill January 9.0 7.6 8.9 10.0 February 9.0 7.0 8.6 9.6 March 9.0 7.1 8.3 9.4 April 9.0 7.4 8.1 9.4 May 9.0 7.2 7.9 9.3 June 9.0 6.9 7.6 9.2 2019 July 9.0 6.6 7.4 8.8 August 9.0 6.4 7.1 9.2 September 9.0 6.4 7.1 9.6 October 9.0 6.4 7.2 9.8 November 8.5 6.6 7.6 9.8 December 8.5 7.2 8.2 9.8 January 8.3 7.2 8.2 9.8 February 8.3 7.3 8.2 9.9 March 7.3 7.3 8.1 9.2 April 7.0 7.2 8.1 9.1 May 7.0 7.3 8.2 9.2 June 7.0 7.1 7.9 8.9 2020 July 7.0 6.2 6.7 7.6 August 7.0 6.2 6.6 7.5 September 7.0 6.3 6.7 7.6 October 7.0 6.5 6.9 7.8 November 7.0 6.7 7.1 8.0 December 7.0 6.9 7.4 8.3 January 7.0 6.9 7.5 8.4 February 7.0 6.9 7.6 8.8 March 7.0 7.0 7.8 9.1 April 7.0 7.1 7.9 9.4 May 7.0 7.1 8.0 9.3 June 7.0 7.0 7.6 8.4 2021 July 7.0 6.6 7.1 7.5 August 7.0 6.6 7.1 7.4 September 7.0 6.8 7.3 7.8 October 7.0 7.0 7.4 8.1 November 7.0 7.1 7.7 8.7 December 7.0 7.3 7.9 9.1 January 7.0 7.3 8.1 9.5 February 7.0 7.3 8.1 9.7 2022 March 7.0 7.3 8.1 9.8 April 7.0 7.4 8.3 9.7 May 7.5 7.7 8.7 9.8 Source: Central Bank of Kenya 40 June 2022 | Edition No. 25 Table A13: Interest rates Short-term Long-term Year Month Overall 91-Treasury Central Average Interest Interbank Savings weighted Bill Bank Rate deposit rate Rate Spread lending rate January 3.3 7.6 9.0 7.3 5.1 12.5 5.2 February 2.5 7.0 9.0 7.3 5.2 12.5 5.2 March 3.7 7.1 9.0 7.2 5.1 12.5 5.3 April 4.2 7.4 9.0 7.2 4.7 12.5 5.3 May 5.6 7.2 9.0 7.2 4.7 12.5 5.3 June 3.0 6.9 9.0 7.2 4.8 12.5 5.3 2019 July 2.3 6.6 9.0 7.0 4.8 12.4 5.4 August 3.7 6.4 9.0 6.9 4.5 12.5 5.6 September 6.9 6.4 9.0 7.0 4.6 12.5 5.5 October 6.9 6.4 9.0 7.0 4.4 12.4 5.5 November 4.2 6.6 8.5 6.6 4.5 12.4 5.8 December 6.0 7.2 8.5 7.1 4.0 12.2 5.1 January 4.4 7.2 8.3 7.1 4.3 12.3 5.2 February 4.3 7.3 8.3 7.1 4.2 12.2 5.1 March 4.4 7.3 7.3 7.1 4.2 12.1 5.0 April 5.1 7.2 7.0 7.0 4.2 11.9 4.9 May 3.9 7.3 7.0 7.0 4.2 11.9 5.0 June 3.3 7.1 7.0 6.9 4.2 11.9 5.0 2020 July 2.1 6.2 7.0 6.8 4.1 11.9 5.2 August 2.6 6.2 7.0 6.6 4.1 12.0 5.3 September 2.9 6.3 7.0 6.4 3.8 11.8 5.3 October 2.7 6.5 7.0 6.3 3.4 12.0 5.7 November 3.3 6.7 7.0 6.3 3.4 12.0 5.7 December 5.3 6.9 7.0 6.3 2.7 12.0 5.7 January 5.1 6.9 7.0 6.3 2.7 12.0 5.7 February 4.5 6.9 7.0 6.5 3.4 12.0 5.6 March 5.2 7.0 7.0 6.5 3.5 12.0 5.6 April 5.1 7.1 7.0 6.3 2.7 12.1 5.8 May 4.6 7.1 7.0 6.3 2.5 12.1 5.8 June 4.6 7.0 7.0 6.4 2.5 12.0 5.6 2021 July 4.2 6.6 7.0 6.3 2.5 12.1 5.8 August 3.1 6.6 7.0 6.3 2.6 12.1 5.8 September 4.7 6.8 7.0 6.3 2.6 12.1 5.8 October 5.3 7.0 7.0 6.4 2.6 12.1 5.7 November 5.0 7.1 7.0 6.4 2.6 12.1 5.7 December 5.2 7.3 7.0 6.5 2.6 12.2 5.7 January 4.3 7.3 7.0 6.5 2.6 12.1 5.6 February 4.7 7.3 7.0 6.6 2.6 12.2 5.6 2022 March 4.8 7.3 7.0 6.5 2.5 12.2 5.7 April 4.7 7.4 7.0 May 4.6 7.7 7.5 Source: Central Bank of Kenya June 2022 | Edition No. 25 41 Table A14: Money aggregate (Growth rate y-o-y) Year Growth rates (yoy) Money supply, M1 Money supply, M2 Money supply, M3 January 7.4 8.4 10.5 February 5.6 7.3 10.3 March 11.7 10.8 12.5 April 6.8 8.7 10.7 May 6.7 8.3 8.7 June 10.5 9.8 9.2 2019 July 5.3 6.9 7.0 August 6.0 6.1 6.3 September 5.8 6.7 6.5 October 3.0 6.3 7.5 November 3.6 5.6 5.9 December 3.2 5.4 5.6 January 4.1 5.7 5.5 February 7.3 8.1 7.9 March 4.9 6.4 7.2 April 6.2 7.5 8.6 May 7.2 8.5 9.9 June 5.8 9.6 9.1 2020 July 11.4 11.9 11.3 August 12.1 11.1 10.8 September 14.1 11.0 10.7 October 17.8 11.5 11.5 November 20.5 13.6 14.2 December 12.8 11.9 13.2 January 12.6 11.0 13.2 February 10.6 9.9 12.4 March 7.6 7.7 10.1 April 7.7 7.9 9.3 May 7.8 6.9 7.6 June 5.1 4.6 6.4 2021 July 6.3 5.6 6.9 August 10.0 8.8 10.0 September 6.3 7.2 8.7 October 4.9 6.6 7.3 November 3.5 6.1 7.1 December 7.4 5.6 6.1 January 4.5 4.6 4.7 2022 February 5.6 4.7 4.4 March 4.6 4.9 4.7 Source: Central Bank of Kenya and World Bank 42 June 2022 | Edition No. 25 Table A15: Coffee production and exports Exports value Year Month Production MT Price KSh/Kg Exports MT KSh Million January 4,167 453 3,469 1,499 February 5,724 449 4,567 1,903 March 4,057 298 4,351 2,256 April 5,307 203 4,552 2,501 May 4,084 201 5,490 2,700 June 2,021 192 4,549 1,964 2019 July 672 197 5,115 1,713 August 1,647 217 3,932 1,462 September 1,522 233 3,145 1,113 October 2,541 260 3,986 1,390 November 1,117 332 3,664 1,176 December 771 435 1,906 634 January 3,049 439 2,639 985 February 4,410 427 3,169 1,687 March 4,845 422 4,604 2,410 April 2,242 295 4,396 2,590 May 1,125 276 4,313 2,279 June - - 5,414 2,956 2020 July 1,310 358 3,546 1,799 August 1,209 525 3,182 1,484 September 1,913 484 3,391 1,607 October 1,329 527 2,732 1,322 November 1,318 568 3,594 1,837 December 1,667 660 2,405 1,285 January 3,824 697 2,129 1,342 February 5,325 664 3,481 2,161 March 4,318 544 6,065 4,557 April 2,196 436 3,337 2,307 May 4,430 3,010 June 502 551 3,437 2,272 2021 July 1,278 674 2,696 1,764 August 1,479 684 2,504 1,658 September 1,889 664 2,480 1,735 October 999.1 671 2432.2 1674.37 November 3538.5 775 2170.19 1740.12 December 2815.88 789 2314.35 1918.64 2022 January 3238.6 2633.51 Source: Kenya National Bureau of Statistics June 2022 | Edition No. 25 43 Table A16: Tea production and exports Exports value Year Month Production MT Price KSh/Kg Exports MT KSh Million January 48,386 234 48,623 11,831 February 31,445 216 41,027 9,638 March 26,462 214 42,457 9,910 April 26,131 228 36,884 8,631 May 37,759 242 36,994 9,293 June 42,425 219 29,355 7,154 2019 July 31,458 205 33,657 7,788 August 37,200 218 41,276 9,458 September 35,533 229 36,325 8,463 October 46,305 242 45,374 11,065 November 45,087 235 43,650 10,735 December 50,660 225 39,312 9,484 January 53,636 232 48,770 11,452 February 49,201 214 47,570 11,022 March 55,733 207 51,441 11,665 April 49,656 225 57,722 13,193 May 47,004 210 48,594 11,289 June 46,378 198 46,399 10,293 2020 July 36,554 194 46,851 10,014 August 38,525 217 47,035 10,269 September 43,413 220 44,725 10,200 October 48,275 215 43,656 9,937 November 47,680 218 46,353 10,611 December 54,412 215 46,167 10,301 January 48,896.13 223 48,812 11,379 February 43,398.65 230 50,390 11,726 March 48,692.71 219 53,432 12,673 April 44,299.46 207 51,899 11,576 May 45,321.64 205 50,042 11,071 June 43,468.95 196 43,993 9,548 2021 July 34,732.37 189 43,844 9,204 August 33,635.04 230 44,421 9,874 September 43,185.49 244 36,308 8,566 October 48,956.89 268 40,078 10,316 November 50,719.16 278 45,318 12,181 December 50,526.36 296 47,922 12,725 2022 January 45,585 12,629 Source: Kenya National Bureau of Statistics 44 June 2022 | Edition No. 25 Table A17: Local electricity generation by source Hydro KWh Geo-thermal Thermal KWh Wind KWh Total KWh Year Month Million KWh Million Million Million Million January 279 417 114 148 966 February 254 374 99 146 880 March 283 445 99 144 979 April 192 398 181 142 921 May 243 427 110 164 952 June 272 413 146 92 932 2019 July 269 440 133 125 975 August 251 425 132 151 968 September 234 454 105 153 953 October 268 494 70 137 977 November 299 482 62 114 965 December 361 464 62 46 940 January 358 477 55 90 986 February 342 431 54 100 934 March 359 460 56 86 969 April 298 412 36 88 841 May 319 392 56 106 881 June 334 421 62 88 913 2020 July 358 433 61 110 969 August 358 424 71 119 977 September 356 381 89 140 973 October 373 440 80 122 1023 November 385 397 60 148 997 December 400 393 77 135 1012 January 330 465 75 138 1015 February 281 422 106 110 926 March 305 461 63 200 1037 April 308 425 60 165 964 May 369 385 116 130 1008 June 318 409 84 185 1003 2021 July 286 463 123 153 1037 August 274 453 109 190 1043 September 262 440 107 187 1014 October 309 388 118 201 1039 November 293 378 135 196 1025 December 339 349 167 131 1014 2022 January 320 311 206 156 1026 Source: Kenya National Bureau of Statistics June 2022 | Edition No. 25 45 Table A18: Soft drinks, sugar, galvanized sheets and cement production Soft drinks litres Galvanized sheets Year Month Sugar MT Cement MT (thousands) MT January 53,585 53,060 20,124 485,178 February 55,218 46,139 22,749 470,146 March 61,413 45,463 26,313 507,037 April 58,230 35,312 23,214 501,921 May 53,086 36,307 22,501 486,301 June 46,074 28,545 24,667 477,432 2019 July 47,149 25,097 23,260 527,115 August 49,248 32,835 21,918 512,470 September 53,234 33,356 22,641 519,370 October 47,586 35,259 22,619 504,615 November 50,715 30,898 21,871 479,085 December 55,398 38,325 22,547 496,517 January 52,654 53,155 23,397 530,404 February 49,406 51,083 21,989 548,818 March 49,494 52,699 18,527 559,424 April 46,015 45,468 12,469 509,197 May 34,129 46,350 18,042 511,961 June 44,829 49,681 23,730 594,421 2020 July 44,394 53,131 24,493 666,341 August 39,290 53,532 23,226 712,701 September 52,436 54,873 20,801 707,033 October 47,215 54,830 22,868 731,253 November 42,916 50,227 23,268 668,507 December 64,707 38,834 20,854 666,855 January 52,537 58,044 17,788 652,883 February 44,421 61,508 19,716 612,980 March 53,498 66,194 20,676 721,444 April 51,749 58,404 21,056 695,953 May 51,201 57,796 22,017 717,669 June 51,954 58,968 21,505 698,424 2021 July 35,980 57,513 19,519 876,998 August 42,744 64,134 18,838 896,825 September 50,983 45,347 16,655 853,688 October 49,899 17,041 892,975 November 60,022 22,856 848,198 December 802,564 2022 January 855,393 Source: Kenya National Bureau of Statistics 46 June 2022 | Edition No. 25 Table A19: Tourism arrivals Year Month JKIA MIA TOTAL January 113,362 15,727 129,089 February 107,058 12,864 119,922 March 106,001 9,732 115,733 April 104,418 5,096 109,514 May 98,788 3,689 102,477 June 126,822 2,454 129,276 2019 July 150,286 8,663 158,949 August 150,723 11,000 161,723 September 124,001 9,208 133,209 October 115,828 10,940 126,768 November 111,548 12,339 123,887 December 121,912 12,391 134,303 January 114,873 12,214 127,087 February 108,578 11,092 119,670 March 43,346 3,950 47,296 April 12 - 12 May 1,229 - 1,229 June 534 2 536 2020 July 617 1 618 August 13,371 548 13,919 September 19,403 761 20,164 October 28,451 1,184 29,635 November 30,719 1,156 31,875 December 44,279 3,127 47,406 January 43,234 3,045 46,279 February 32,047 3,005 35,052 March 37,214 3,194 40,408 April 27,850 3,037 30,887 May 32,153 1,735 33,888 June 46,494 2,038 108,102 2021 July 64,498 4,532 147,122 August 72,291 6,257 167,278 September 66,667 3,633 154,658 October 67,608 5,201 159,407 November 71,271 5,435 165,589 December 82,867 7,637 195,978 January 62,585 6,651 152,770 February 67,560 6,390 160,888 2022 March 76,336 5,073 179,905 April 77,379 3,949 181,891 Source: Kenya National Bureau of Statistics Note: JKIA (Jomo Kenyatta International Airport, MIA (Moi International Airport) June 2022 | Edition No. 25 47