Monday, May 1, 2017

Economic survey report should guide planning

The 2016 Economic Survey report reveals priority areas for planning. This report provides the state of the economy across multiple sectors between 2011- 2015.

Kenya’s economic growth structure remains problematic. Agriculture accounts for 30 percent of Kenya’s GDP. Manufacturing contributes a paltry 10 percent. Retail, transportation, financial services, construction, education, information, telecommunication and other service sectors account for 60 percent of GDP. 

The report reveals that enrollment in secondary education increased by about 44 percent, from about 1.77 million in 2011 to 2.56 million in 2015. In the same period enrollment in primary school grew by 4.2 percent from 9.6 million to 10 million. The proportion of pupils who transition from primary to secondary has increased only marginally from 60 percent to 63 percent between 2012 and 2015. However, the rate of completion of secondary school is only 48 percent.

Development spending in education has remained flat over the last five years at about Ksh. 21 billion.  But here is what is truly depressing. Both development and recurrent expenditure for youth polytechnics and training declined by about 280 percent, from about Ksh. 1.45billion to a miserable Ksh. 383 million. Such low levels of investment in technical and vocational training are disconcerting especially when one considers the massive skills gap in technical and vocational fields.

The report reveals that pneumonia and cancer and not malaria and HIV/AIDS are now the top causes of mortality in Kenya. While the incidence of malaria has declined by about 47 percent between 2011 and 2015, the incidence of respiratory infections increased by 63 percent in the same period.  Inequalities in health still persist. For example more than 35 percent of registered births in 2015 in Narok, Wajir, Mandera, Marsabit and Tana River occurred at home.

Data on healthcare personal is worrying, with critical deficit in qualified individuals in the fields of nutrition, medical imaging science, medical laboratory science, registered of BSc trained nurses in metal health and psychiatry, optical and dental technology. There is an opportunity here to ramp up investment in technical and vocational training to respond to the enormous manpower needs in the health sector.

On employment, 83 percent of Kenya’s workforce is employed in the informal sector. Furthermore 60 percent of those employed in the informal sector work in retail, food and hospitality sector, where wages are low. The informal sector is characterized by poor working conditions, and attracts very low wages. While the informal sector is the largest employer, the rate of growth of new jobs is about 4.2 percent. Formal sector, which accounts for only 17 percent of jobs, grew at an average of 16 percent between 2011 and 2015. 

I don’t know who the audience for Economic Survey report is. But I think the department of planning and finance must pay attention to report, especially with respect investing in quality education, health and priorities for skill development. Job growth in the informal sector is plateauing. But job growth in the formal remains sluggish. What is the plan?

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