Kenya’s GDP contracted 0.3% in 2020, courtesy COVID-19: Economic Survey

The Government of Kenya has recognised the information, communications and technology sector as a key contributor to the country’s GDP

By Madhumita Paul
Published: Wednesday 15 September 2021
A panoramic view of Nairobi. Photo: Daryona via Wikimedia Commons
A panoramic view of Nairobi. Photo: Daryona via Wikimedia Commons A panoramic view of Nairobi. Photo: Daryona via Wikimedia Commons

Real Gross Domestic Product (GDP) in Kenya contracted by 0.3 per cent in 2020, mainly due to the novel coronavirus disease (COVID-19), according to the annual Economic Survey 2021 released by the Kenya National Bureau of Statistics (KNBS).

Accommodation and food serving activities, education, professional and administrative service activities suffered in Kenya in 2020 due to COVID-19, according to the survey.

The Kenyan government ordered a temporary closure of international boundaries, imposed curfews and restricted movements in 2020. These policy measures affected both international and domestic trade, tourism and international travel.

As a result, the year registered reduced international trade with the sharpest drop occurring in the second quarter of 2020. The total volume of trade declined to Kenya Shillings (KSh) 2,287.2 billion in 2020, from KSh 2,403.0 billion in 2019.

The Kenyan government suspended international passenger flights from March 25-July 31, 2020 to contain the spread of COVID-19.

This led to the number of international visitor arrivals declining by 71.5 per cent, to 580,000 in 2020, from 2,035,000 in 2019. So, the tourism earnings declined by 43.9 per cent to KSh 91.7 billion in 2020, from KSh 163.6 billion in 2019.

According to the survey, the economy was somewhat supported by accelerated growth in agricultural production (4.8 per cent), construction activities (11.8 per cent), financial and insurance activities (5.6 per cent) and health services activities (6.7 per cent).

The government has recognised the Information, Communications and Technology (ICT) sector as a key contributor to the country’s GDP.

The Kenyan government encouraged the use of ICTs through provisions of e-government services, e-health programmes and e-education as part of efforts to contain the spread of the COVID-19 pandemic.

Kenya’s information technology market was valued at $635 million at the end of 2020, according to research firm Business Monitor International. Kenya is often referred to as Africa’s ‘Silicon Savannah.’

The value of output from the ICT sector increased by 2.5 per cent to KSh 538.3 billion in 2020, a slower growth compared to the 5.8 per cent registered in 2019.

Total mobile money transfers grew by 20.0 per cent in 2020, one of the largest increments recorded in the last five years, to stand at KSh 5.2 trillion.

The value of the mobile commerce transactions grew by 35 per cent to KSh 9.4 trillion in the same period. This increment was driven by preferences to cashless transactions in the wake of COVID-19 and the reduction of mobile money transfer tariffs, the survey said.

According to the survey, other key sectors like manufacturing and transportation are likely to rebound and support the country’s economic growth.

The survey is an annual publication prepared by the KNBS that provides socio-economic information covering a five-year period.

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