President Kenyatta gave a speech on Wednesday in which he defended his government’s record in areas including job creation, the public debt, security and health services. Nation Newsplex checked the facts for you.

EASE OF DOING BUSINESS

"As result of the substantial changes we have made to our business policy framework, for two year in a row Kenya has been ranked as the third-most improved country globally, according to the World Bank Ease of Doing Business Index.”

In both 2017 and 2016, Kenya was named among 10 countries that had improved most across three or more areas measured by Ease of Doing Business 2017 report. However, it is not clear if Kenya was the third-most improved in both years. It definitely was the third-most improved in 2017, when it had the third-most change in Distance to Frontier (DTF) score of 3.52 among the top 10.

However, in 2016, Ease of Doing Business did not publish the DTF score. Interestingly, before 2016, the last time Kenya earned a place among the most improved countries was in 2008, based on the 2006/2007 financial year, before post-election violence wiped out many of the country’s economic gains. While Kenya was ranked the third-most reformed country in the World Bank’s Ease of Doing Business and it climbed 21 places in 2017 from the previous year, the country’s overall rank is 92 out of 190 economies. MOSTLY TRUE

ECONOMIC GROWTH

“Our gross domestic product (GDP) has expanded at a strong average annual growth rate of 5.9 per cent since 2013, this against a global average of three per cent.”

According to the Kenya National Bureau of Statistics (KNBS), the economy grew by 5.6 per cent in 2015, 5.3 per cent in 2014 and 5.7 per cent in 2013. This translates to an average GDP growth rate of 5.5 per cent for those three years, not 5.9 per cent. To maintain an average GDP growth rate of 5.9 per cent from 2013, the economy would need to have grown by seven per cent in 2016, but it is on course to miss that target.

According to KNBS, in the first three quarters of 2016, GDP grew by 5.9, 6.2 and 5.7 percentage points, respectively, averaging 5.9 per cent, which is within the World Bank’s projections of 5.9 in 2016.
In Real GDP or GDP adjusted for inflation, growth in the three years to 2015 was five per cent. However, many Kenyans are not feeling the effect of this growth because average and minimum wages have stagnated even as the cost of basic goods escalates. For instance, month-on-month inflation rate in February this year stood at 9.04 per cent, the highest rate in four years and nine months. MOSTLY TRUE

JOBS

"The stable economic environment over the past four years has seen the cumulative addition of 2.3 million new jobs. From this perspective, the state of our economy is robust."

To get this figure, Newsplex found out the difference between jobs created in 2013 and 2012 (735,900), 2014 and 2013 (802,200), and 2015 and 2014 (841,600). The three numbers from the Economic Surveys added up come to 2,379,700 jobs. TRUE

PUBLIC DEBT

“Our debt is about 50 per cent of our GDP. Of that amount, less than half is in foreign currency. Our debt has grown almost proportionally to our GDP.”

It is true that the debt-to-GDP ratio rose from 37 per cent of GDP in 2011/2012 to 50 per cent of GDP in 2015/2016. As at end of September 2016, our national public debt stood at Sh3.6 trillion, up from Sh1.5 trillion at the end of 2012, making the debt at the end of September 2016 more than double what it was in 2012. Much of this has been incurred for large projects such as the standard gauge railway.

The outstanding debt is made up of Sh1.7 trillion foreign and Sh1.85 trillion domestic debt, and both have increased at about the same rate. In the Budget Review Outlook Paper of 2015, the debt-to-GDP ratio was projected to reach 63 per cent in the fiscal year 2018/2019, meaning debt is projected to growing faster than GDP.

A study by the World Bank found that if the debt-to-GDP ratio exceeds 64 per cent in emerging markets, it slows economic growth by two per cent each year. A high debt-to-GDP ratio may make it more difficult for a country to pay debts and could lead creditors to seek higher interest rates when lending.

The composition of debt has also changed. Four years ago, 60 per cent of our foreign debt was owed to multilateral lenders (World Bank, IMF, African Development Bank) and one third to bilateral lenders (that is, government-owned development finance institutions). In 2015, that proportion fell to 26 per cent. China was, by far, Kenya’s largest bilateral lender, holding 9.7 per cent of all debt and more than half (57 per cent) of all bilateral debt. UNPROVEN

POLICE

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