Economic growth figures under President Uhuru Kenyatta face scrutiny as analysts reveal discrepancies between nominal and real GDP calculations. A 2021 study examines milk production data and national income accounting methods to challenge reported economic expansion, citing 2019 KNBS records and 2023 revenue projections.
Consumer milk prices illustrate inflation trends: Sh60 per liter in 2012 (Sh30 for a 1.2-liter packet) rose to Sh110 in 2020. KNBS data shows farmers received Sh31 per liter in 2012 and Sh33 in 2020, while marketed production increased from 330 million to 460 million liters—a 39% rise. Nominal value-added in milk processing rose from Sh9.6 billion in 2012 to Sh35.4 billion in 2020, reflecting a 270% increase, but this includes rising margins rather than pure output growth.
Economists differentiate between nominal GDP (current prices) and real GDP (constant prices). Using 2012 as a base year, 2020 milk production valued at 2012 prices amounts to Sh13.3 billion, aligning with the 39% physical output growth. This method reveals that real GDP growth under Uhuru amounts to 45%, not the 3.7-fold increase claimed. A 2023 revenue plan projection references these metrics in context.
Inflation adjustments further complicate the narrative. At 7% annual inflation, Sh11 trillion nominal GDP in 2020 equates to Sh6.4 trillion in 2012 prices—a 45% increase. This contrasts with the 11.4% nominal growth rate. The discrepancy highlights how price gouging by industry players may distort economic indicators, as noted in 2019 KNBS data discrepancies.
Statistical inconsistencies also emerge. KNBS reports 2012 GDP in 2009 prices and 2020 GDP in 2016 prices, complicating direct comparisons. However, growth rates remain consistent regardless of base years. Applying a 4.4% annual real growth rate to 2012 GDP yields a 2020 value of Sh6.2 trillion, corroborating the 45% expansion figure. Historical context reveals further complexities: under former President Mwai Kibaki, the economy doubled between 2002 and 2012, despite 10% annual inflation.
