Key alternative indicators of Kenya's economic growth

Kenya's economic growth: Notice the fluctuations. [Source: World Bank]

Is the economy doing well? The quick answer is to look at the official Gross Domestic Product (GDP) growth rates given by the government or other organisations like the World Bank or the International Monetary Fund (IMF).

It was 4.6 per cent last year.  The long-term data give a better picture. Politicians love a steady growth trajectory. It creates jobs, confidence and votes.

The reality is usually different because of international and external factors like COVID-19 and wars in the Middle East.

But GDP growth masks the economic reality, inequality and what drives it. An economy can grow while inequality grows, with poverty rising. The growth could be driven by huge capital investments with no trickle-down effect.

That is why GDP growth figures should be reported with the Gini index, the measure of inequality.

Data from the government or the World Bank and IMF should be supplemented with real-life observations. We often miss lots of knowledge and wisdom and must add money by demanding hard data to make decisions.

Yet some of the most critical decisions we make in our lives don’t need hard data. Examples include marriage or even career choices.

Most citizens have not done Economics 101, never read economic surveys, business or economic news, which is often written in jargon. How would I explain marginal propensity to consume to my 90-year-old mum?

Add the fact that the language of business and economics is English. That complicates data and its analysis. What would be GDP in your mother tongue?

Data analysis and interpretation are made worse by the ghosts of high school maths.  Many leave school vowing to keep off maths, because of the way it’s taught. With some humour and real-life applications, maths would be friendlier.

Let’s suggest other alternatives to hard economic data. The first alternative indicator is the money in our pockets for basic needs like food, rent and school fees.

We are not even adding emergencies. That is the question I get every day: if the economy is doing so well, why are my pockets empty? Surprised citizens go for handouts?

A better explanation for the state of the economy is savings. Have you covered your basic needs to save? Noted the popularity of online harambees? Despite occasional abuse, online harambees are a clear indicator that our pockets are not doing well

Two, is the time on traffic jams. With money, we buy more cars and travel more, clogging the roads. Empty roads show scarcity of money. Add the rise in the price of fuel, which pulls cars off the road.

Some prefer to work from home or use public means of transport. The availability of parking space in city centres or malls is an economic health check.

The third is behaviour. Have you noticed the uneasy quietness among Kenyans in matatus and other public spaces? Noted how long we take to respond to emails and SMS?

That is a sign of economic stress. Add the fact that without money, we are quick to anger.

Four, family quarrels, including divorces and separations. Economic hard times accentuate the differences, leading to scapegoating. What of suicides and unexplained deaths?

Five, dishonesty increases. Sent money to the wrong number? How was the reaction from the other party? Noted the increase in tricks to con us, particularly online? Add counterfeit products and shoddy services.

Seven, downgrading in schools, residences, holidays, attire, and other leisure activities. Luxury items are the first casualty of hard economic times. Think of fast food.

Eight, promotions and offers in supermarkets.  They no longer wait for Christmas!

Nine, more debt; not just non-performing loans in banks but personal loans. Note that now you can get loans for anything.

And the popularity of other collateral beyond land? Curiously, shylocks and auctioneers thrive when the economy is not doing well. It’s not just the government that is indebted.

Ten, and curiously, is the rise in the student population as we try to hedge against the economic misfortunes by acquiring new skills. Most students would opt to work instead of schooling.

Eleven, what of foreign investors snapping up our choice assets like banks? Would we let them go if we had the money?

Twelve, petty crime like snatching phones goes up when the economy is doing badly.

Thirteen. What of “sponsors”? Do they increase or decrease as the economy slows? They want to save their money, but the demand goes up. Any sponsor bold enough to talk? 

Fourteen: the increasing number of people walking to work to save on transport costs. Noted them walking from Westlands to town or from Upper Hill?

Add other routes like Waiyaki Way, Thika Road and Mbagathi Road.

Lastly, do we sire more or fewer children when the economy is doing badly?

What other indicators of the state of the economy have I left out?