## 1. Nominal GDP Previous and Current ## Source details **Canonical URL:** [1. Nominal GDP Previous and Current](https://www.imf.org/-/media/files/publications/cr/2022/english/1kenea2022001.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2022/english/1kenea2022001.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2022/english/1kenea2022001.pdf.json) --- ### Summary of mission outcomes and priority recommendations - A Technical Assistance (TA) mission was conducted in July 2021 to review data sources and methods used to produce revised estimates of the Kenyan National Accounts (NA) for the period 2009–2019 and to provide guidance on producing a revision report to be published at the time of the release. - Comprehensive revisions were implemented to adopt latest international accounting standards and integrate improved data sources and methods. - Significant revisions observed across 2009–2019; the most significant revision relates to the estimate of crop production, with notable revisions in the 2016 benchmark year and throughout 2009–2019. - Sources for benchmark-year revisions include: Kenya Integrated Household Budget Survey (KIHBS), Census of Industrial Production (CIP), Integrated Survey of Services (ISS), Micro Small and Medium Enterprise Survey (MSMES), and trade statistics for exports and imports. - Non-benchmark year revisions mainly due to significant downward revisions in the price indexes used to estimate nominal crop production and small revisions to crop volumes (market and own-account production). - Revisions to other industries (manufacturing, wholesale and retail trade, land transportation, real estate, construction) tended to be upwards due to incorporation of new data sources and improved coverage of services (telecommunication, transportation, financial). - Mission recommendations for future research include: - Investigate use of taxes on products as published by the Ministry of Finance as the benchmark estimate of taxes on products. - Consider removing the stock of government securities from the stock of loans when calculating FISIM. - Investigate developing volume indicators for both FISIM and insurance services. - Work with the Ministry of Agriculture to improve annual estimates of the volume of crop production. - Review KNBS revision policy to ensure timely incorporation of source-data revisions into the national accounts. - The mission recommends KNBS develop and release a revisions report concurrent with the revised national accounts, including detailed explanations of new data sources, methods, and calculations, and provide advance notice to key stakeholders (Central Bank, Ministry of Finance, Ministry of Agriculture). ### Priority recommendations (selected) - Target Date: September 2021 — Develop clear, detailed explanations of the data sources, methods and calculations used to produce the revised 2009-2019 national accounts and incorporate these into a revision report. — Responsible: KNBS - Target Date: September 2021 — Provide key stakeholders advance notice of the release date well in advance of the release. — Responsible: KNBS - Target Date: September 2021 — Release the revisions report at the time of the release of the revised estimates. — Responsible: KNBS - Target Date: TBA — Seek funding (staff and operational) to sustain the quality improvements realized during this comprehensive revision; regularize receipt of new source data used to produce the revised estimates. — Responsible: KNBS ### Detailed technical assessment — priority actions and milestones - Revision report should include: - A section highlighting revisions to both the overall level of GDP and the constant price growth rates, with contextual information where large revisions occur. — Target Completion Date: September 2021 - A table comparing new data sources used for revised manufacturing output and value added with previous data sources. — Target Completion Date: September 2021 - A table comparing MOA crop production volumes with KNBS demand-based estimates to clarify choice of data sources. — Target Completion Date: September 2021 - Detailed tables and analysis of data sources, methods and calculations used to estimate current and constant price estimates of crop production for Kenya’s largest crops. — Target Completion Date: September 2021 - Work with MOA to conduct a regular agriculture survey to improve domestic crop production estimates. — Target Completion Date: TBD - A table/chart comparing manufacturing output with related economic indicators (exports, number of manufacturing firms). — Target Completion Date: September 2021 - A table and analysis comparing previous and revised electricity generation data sources. — Target Completion Date: September 2021 - A section summarizing the special study undertaken to develop revised trade margins, including sample size, industries covered, and treatment of online sales. — Target Completion Date: September 2021 - Sections outlining new data sources used to estimate telecommunication output and value added by service (product); include provider and services coverage comparisons. — Target Completion Date: September 2021 - Analysis of output of mobile money services and mobile money transactions. — Target Completion Date: September 2021 - A section describing new data sources used to estimate passenger transportation services, confronted with fuel sales, gasoline imports, and tourist arrivals. — Target Completion Date: September 2021 - A detailed breakdown of revisions to household final consumption expenditure with explanations of how revisions to crop production, telecommunication services, financial services, and transportation impacted household spending composition. — Target Completion Date: September 2021 - Medium-priority research agenda items (Target Completion Date: TBD): - Examine use of a weighted average of actual lending and borrowing rates to calculate the reference rate. - Examine allocation of FISIM consumed by non-financial corporations by economic activity or by output shares as a second-best alternative. - Develop estimates of exports and imports of financial services. - Investigate alternative volume measures for insurance output (number or value of policies enforced). - Develop estimates of total space/rooms rented to refine imputed and actual rental income; consider differentiating IC for owner-occupiers from actual renters. - Adjust total output of construction to exclude construction material consumed by households. ### Background and overview of revision process - Report figures reflect work-in-progress estimates prepared by KNBS and may differ from published revised national accounts. - KNBS initiated a comprehensive revision and rebasing project in 2017; revised national accounts benchmarks were established for 2016 (previous benchmark year 2009). - Technical support provided by IMF East AFRITAC (AFE) (backstopped by IMF Statistics Department) and Statistics Sweden. - KNBS presented highlights of revised estimates in March 2021 for dissemination in April; concerns about significant downward revision in GVA for agriculture, forestry, and fishing required peer review. - Revised 2016 benchmarks incorporate new sources including: 2015/2016 KIHBS, ISS 2017, CIP 2018, NPISH 2019, Survey of Informal Transportation and Other Personal Services, 2016 MSMES, COE 2016, Corporate Income Tax data (CIT) for 2016, 2019 Study of Trade Margins, and 2019 Population and Housing Census (KPHC). - National accounts compilation aligned with the 2008 SNA. Supply and Use Tables (SUT) were produced for 2016 following 2008 SNA recommendations. - 2016 benchmark estimates were used to update the NA time series for 2009–2019; 2012 revised estimates were retropolated to 2009 using previous growth rates in most activities. - For activities with limited data, output indicators used to derive output estimates and benchmark input-output ratios applied to derive intermediate consumption (IC) at constant prices; weighted IC price indices used as "reflators" to estimate IC at current prices. ### Revisions to nominal and real GDP — key statistics and findings - GDP in current prices was revised upwards by 8.1 percent in 2016 with all activities revised upwards except Agriculture and Forestry and Fishing activity which was revised downwards by 30.3 percent. - Annual GDP growth in constant prices was revised downward by an average of - 0.8 percentage points over the period 2009–2019. - The revision in the benchmark year (2016) was -1.8 percentage points. - The largest upward revision observed was +0.3 percentage points in 2012. - The largest downward revision observed was -0.8 percentage points in 2016. - The rebasing to 2016 reflected structural changes: increased shares of Transport and Storage, Information and Communication, Accommodations and Food Services, Manufacturing, Construction and Real Estate; crop production as a share of GDP was revised downwards over the entire period. ### Recommendation (specific) - Mission found overall revisions to nominal and real GDP were in line with changes in source data and methods adopted in this revision. - Mission recommends KNBS include a section in the revision report highlighting revisions to both the overall level of GDP and the constant price growth rates, and where large revisions occur include contextual information demonstrating alignment with major economic events, policy implementation and related social indicators. --- ### Crop production — summary of revisions, rationale, methodology, and implications - Summary of revisions: - On average annual crop production was revised downward by 32.3 percentage points. - Average revision to constant prices growth rates in crop production was -1.9 percentage points. - Market production in the 2016 benchmark year was revised downward for all crops in both current price (CP) and constant price (KP) output. - Own account crop production revisions: most important crops such as maize, potatoes and vegetables revised downwards; slight upward revisions to rice and sugar cane. - Selected revisions to nominal output (2016, KSh Million): - maize Market: 97,374 (Revised) vs 128,573 (Previous) - maize own account: 58,409 vs 74,055 - other cereals market: 11,528 vs 33,514 - beans and legumes market: 81,438 vs 129,978 - beans and legumes own account: 29,063 vs 61,608 - rice market: 1,727 vs 1,662 - rice own account: 1,743 vs 1,458 - Potatoes and other root crops market: 140,542 vs 385,482 - vegetables market: 286,411 vs 513,255 - Total: 832,989 (Revised) vs 1,506,043 (Previous) - Demand-side versus supply-side (2016 illustrative comparisons): - Maize: - Maize Production (Million Bags – per MOA): 37.8 - Price (KSh/kg)- Annual Average: 35.4 - Output (MOA based Supply Side) KSh Million: 120,430.8 - Output (Use Side) KSh Million: 155,783.1 - Difference: -35,352.3 - % difference: -22.7% - Potatoes: - Potatoes Production (Million Tonnes): 1.9 - Price (KSh/kg)- Annual Average: 40.3 - Output (Supply Side) KSh Million: 74,667.6 - Output (Use Side) KSh Million: 185,451.6 - Difference: -110,784.0 - % difference: -59.7% - Beans: - Beans Production (Million Bags): 8.1 - Price (KSh/kg)- Annual Average: 76.6 - Output (Supply Side) KSh Million: 55,841.4 - Output (Use Side) KSh Million: 110,501.2 - Difference: -54,659.8 - % difference: -49.5% - Overall conclusion: Supply side (MOA) underestimates output for maize, potatoes, and beans; potatoes show a significant underestimation. - Rationale for demand-side approach: - KNBS deems coverage of demand-side sources better at capturing output produced and consumed by households (output for own final use). - MOA collects crop yield information but KNBS determined MOA estimates do not adequately capture own final use, leading to underestimation by point level agricultural estimates. - Reconciling production with exports and imports has posed challenges (example: 2017 MOA maize yields rose from 37.8 million bags in 2016 to 39.5 million bags in 2017 while imports more than doubled and exports were halved, indicating a maize shortage). - Revisions to volumes and series incorporation (selected crops, previous vs revised): - Maize (Million Bags) examples: - 2015: 45.1 vs 42.1 - 2016: 37.8 vs 37.8 - 2017: 39.5 vs 36.4 - 2020: 44.4 vs 44.6 - Beans (Million Bags) examples: - 2014: 3.6 vs 6.4 - 2015: 4.4 vs 8.5 - 2019: 9.3 vs 9.8 - 2020: 9.9 vs 10.1 - Potatoes (Million Tonnes) examples: - 2014: 1.6 vs 1.6 - 2015: 1.8 vs 1.9 - 2016: 1.6 vs 1.9 - 2019: 2.4 vs 2.2 - New indicator - Volume Index for Potatoes: - 2014: 87.8; 2015: 105.1; 2016: 100.0; 2017: 105.0; 2018: 102.5; 2019: 118.7; 2020: 118.7 - Revisions to agriculture aggregates at current prices (KSh Million) — Current vs Previous (selected years): - Output at basic prices — Current: 2016 1,283,508; 2017 1,536,943; 2018 1,603,422 - Output at basic prices — Previous: 2016 1,982,337; 2017 2,670,379; 2018 2,857,539 - % difference Output at basic prices: -35.3 (2016), -42.4 (2017), -43.9 (2018) - Value added, gross — Current: 2016 1,061,955; 2017 1,277,805; 2018 1,340,437 - Value added, gross — Previous: 2016 1,700,542; 2017 2,325,549; 2018 2,466,172 - % difference Value added, gross: -37.6 (2016), -45.1 (2017), -45.6 (2018) - Agriculture output at current prices was revised downwards by 34.7 percent in 2016 (text statement). - Methodology for non-benchmark years: - KNBS uses demand-side BM estimates and extrapolates each demand component with a volume or constant price indicator, then reflates with appropriate price indices. - Nominal estimates obtained by reflating extrapolated constant price estimates with different price indices depending on crop and use (examples provided in source). - Price index issues: - KNBS started collecting farm gate prices in 2019; farm gate price indices backcasted using rural market prices. - In 2019 significant downward revision to some food components of the CPI for 2014–2019; previous CPI for vegetables had grown over 600 percent from 2009–2019, whereas recalculated CPI for vegetables grew by 12 percent over the same period. Recalculated lower crop prices resulted in significant downward revision in nominal crop production from 2014 through 2019. - Detailed examples (beans and potatoes, selected figures, KSh): - Beans — Total nominal estimates for beans: 2015 87,091; 2016 104,519; 2017 103,060 - Potatoes — Total nominal estimates for potatoes: 2015 155,260; 2016 178,304; 2017 217,977 - Implications: - Large downward revisions to nominal crop production largely due to previously overstated price indices used in nominal calculations. - Revisions affected HFCE significantly because food is an important household expenditure component. - Supply side MOA data without adjustment understates output for key crops. - Recommendation: - KNBS should include detailed tables in the revision report that document data sources, methods, and calculations for current and constant price estimates of crop production for Kenya’s largest crops. --- ### Manufacturing output revisions (section 29) - KNBS revised nominal manufacturing output and value added upward over the entire time-period for overall manufacturing and sub-sectors, driven by incorporation of data from CIP 2018, MSMEs, corporate tax information for 2016, and KIHBS to estimate household manufacturing activity. - Revisions to constant price manufacturing output and value added were minimal. - Recommendation: - Include a comparison table in the revision report showing previous data sources versus revised data sources. - Selected Table 8 figures (Output, IC, Volumes — Food, Beverage, Tobacco — preserved exactly): - Food Output — previous: 2012 634,041; 2014 748,230; 2016 901,605; 2019 1,100,536 - Food Output — current: 2012 635,645; 2014 778,727; 2016 899,851; 2019 1,063,428 - Food Volumes — previous: 2012 476,176; 2016 603,098; 2019 658,652 - Food Volumes — current: 2012 714,790; 2016 899,851; 2019 980,432 - Beverage Output — previous: 2012 108,919; 2016 168,357; 2019 224,064 - Beverage Output — current: 2012 121,679; 2016 180,043; 2019 215,661 - Tobacco Output — previous: 2012 19,201; 2016 18,061; 2019 16,944 - Tobacco Output — current: 2012 14,523; 2016 18,964; 2019 18,157 --- ### Electricity supply — methodology and revisions - KNBS produced separate estimates for electricity generation, steam production, transmission, and distribution. - Generation data: KenGen financial statements; Kenya Power financial statement includes data for independent power producers. Gross output based on sale of fuel and non-fuel to electricity distributors; output extrapolated by generation in Giga Watt Hour (GWH) and reflated using the producer price index for electricity. - Steam production: Data from Geothermal Development Corporation (GDC) financial statement. - Transmission: Data from KETRACO annual financial statement; gross output based on wheeling revenue. - Distribution: Data from Kenya Power annual financial statement; gross output derived as a margin (sale of electricity less cost of power purchased for resale); IC from expenditure components. - Table 9 — Value added (2012–2019) preserved exactly: - Generation: 28,781 32,220 55,751 58,293 59,731 68,444 64,854 70,649 - Steam production: 5,640 5,351 5,851 7,618 7,272 7,529 7,655 6,422 - Transmission: 79 36 223 527 788 1,153 1,496 1,739 - Distribution: 19,697 22,700 25,635 39,173 54,224 58,476 65,787 62,798 - Total VA: 54,196 60,306 87,460 105,611 122,016 135,602 139,792 141,607 - Total VA - Previous: 48,194 53,901 55,190 89,358 131,617 141,255 154,339 163,643 - Recommendation: - Include a table in the revision report comparing previous data sources used to compile electricity generation etc. with the revised data sources. --- ### Wholesale and retail trade; margins, IC/O ratios, and impact - KNBS revised wholesale and retail trade upward over the entire time-period by applying trade margins from a 2019 study and cross-checking outputs with sales turnover from administrative records. - Selected margin revisions (preserved exactly): - Maize (0111-1): Wholesale previous 5.0% Wholesale current 10.0% Retail previous 15.0% Retail current 25.0% - Vegetables (0113-2): Wholesale previous 8.0% Wholesale current 10.0% Retail previous 3.6% Retail current 10.0% - Sugar and molasses (1072): Wholesale previous 10.0% Wholesale current 5.0% Retail previous 40.0% Retail current 15.0% - Wearing apparel (1400): Wholesale previous 12.0% Wholesale current 12.0% Retail previous 65.0% Retail current 30.0% - IC/O ratios (Table 11 exact): - IC/O – previous: 2009 0.480; 2013 0.445; 2016 0.439; 2019 0.417 - IC/O – current: 2009 0.515; 2013 0.522; 2016 0.538; 2019 0.539 - Impact: - GVA (current prices) for wholesale and retail trade was revised upwards by 50 million Ksh in 2016 due to increased margins. - Recommendation: - Include in the revision report a summary of the special study used to develop revised trade margins, including sample size, industries covered, and whether margins from online sales were considered. --- ### Telecommunications — coverage, magnitudes, and mobile money - Telecommunications output and value added revised upwards by 76.4 percent in 2016 due to increased coverage of providers and services and conversion from fiscal year to calendar year basis. - Data sources: financial reports of telecommunication companies, tax information, Communications Authority (CA) report; revenues from voice, messaging, mobile money, and data used as output indicators. - Mobile money activity: - Treated as auxiliary activity in the telecommunication industry. - Fees and commissions associated with mobile money considered as an IC component. - Table 12 (Output and VA preserved exactly): - Output at current prices — Output – previous: 2016 191,567; 2019 249,631 - Output at current prices — Output – current: 2016 313,180; 2019 434,465 - VA at constant prices — VA – previous: 2016 164,798; 2019 221,552 - VA at constant prices — VA – current: 2016 184,834; 2019 241,894 - Mobile money agents and transactions (Table 13 exact): - Number of agents: 2016 161,970; 2017 165,802; 2018 200,654; 2019 221,425; 2020 251,099 - Value of transactions (Billions): 2016 3,356; 2017 3,638; 2018 3,984; 2019 4,346; 2020 5,214 - Number of transactions (Millions): 2016 1,526; 2017 1,543; 2018 1,740; 2019 1,839; 2020 1,863 - Recommendation: - Include in the revision report a section outlining new data sources used to estimate output and value added for telecommunications by service provided, and a table identifying the number of providers and services in previous vs revised estimates. --- ### Transportation and storage — land transportation revisions - Revisions upward throughout 2009–2019 due to NTSA administrative data and a 2019 special transportation study covering all road transport modes. - Retropolation used vehicle registration and inspection data; volumes reflated with weighted CPI fares and transportation inputs. - New data sources resulted in an upward revision to nominal and constant price GVA by over 50 percent. - Table 15 — Transport and Storage (selected exact figures): - Transportation - Previous — Output at basic prices: 2016 1,012,051; 2019 1,399,449 - Transportation - Current — Output at basic prices: 2016 1,545,806; 2019 2,120,504 - Difference — Output at basic prices: 2016 533,755; 2019 721,054 - Transportation - Previous — Value added, gross: 2016 565,829; 2019 830,582 - Transportation - Current — Value added, gross: 2016 894,629; 2019 1,304,712 - Difference — Value added, gross: 2016 328,800; 2019 474,130 - Recommendation: - Include a section in the revision report describing the new data sources used to estimate passenger transportation services and confront estimates with fuel sales, gasoline imports, and tourist arrivals. --- ### Financial and insurance services — FISIM, insurance, and recommendations - FISIM: - Improvements to measurement including explicit service charges. - FISIM calculation: apply the midpoint between the effective interest rate on loans and deposits to all interest earning assets and liabilities. - Total FISIM output allocated to Households and Government based on stocks of loans and deposits provided by the Central Bank. FISIM consumed by corporations treated as intermediate consumption. - KNBS does not estimate exports or imports of FISIM. - Constant price FISIM estimated by extrapolating benchmark estimates using the deflated stock of loans and deposits. - Validation: Net interest incomes from income statements compared to FISIM midpoint methodology were similar except for 2019. - Central Bank of Kenya (CBK) confirmed as a non-market producer; annual output for CBK obtained from income and expenditure statements and derived as sum of costs. - Insurance services: - Revised upward primarily due to improved coverage of auxiliary services offered by Kenyan insurance companies. - Current price cost of service for insurance estimated using premiums, premium supplements, and claims from the Insurance Regulatory Authority. - Constant price estimates could be improved: life insurance deflated using CPI services; non-life deflated using CPI motor vehicles. - Recommendations: - KNBS should restrict FISIM calculation to intermediated loans and deposits and remove government securities from its calculations. - Examine weighted average of actual lending and borrowing rates to calculate the reference rate. - Examine allocation of FISIM consumed by non-financial corporations by economic activity or by output shares as a second-best alternative. - Develop estimates of exports and imports of FISIM. - Investigate alternative volume measures for insurance output such as number of policies or value of policies enforced. - Annex I highlights (Total crop output, values and growth rates, selected): - Total crop output — Previous: 2016 859,344.9; 2019 980,279.3 - Total crop output — Current: 2016 1,269,924.3; 2019 1,388,475.6 - Total crop output — Previous growth rates: 6.9 6.8 9.2 4.9 2.4 7.1 4.0 - Total crop output — Current growth rates: 6.8 1.5 5.3 -0.2 -0.1 5.8 3.5 --- ### General government, taxes on products, construction, and real estate - General government: - Methodology to derive output of general government is appropriate; final consumption expenditures obtained from government chart of accounts plus estimate of FISIM consumed by government; CFC adjusted via perpetual inventory method. - 2016 benchmark enhancements introduced improved data sources and a reclassification of public corporations that manage construction from construction to government sector. - Taxes on products: - Data on import duties and import excise taxes available from customs; non-deductible VAT derived from product flow and allocated based on known tax rates (16.0 percent or zero). - Effective VAT rate slightly above 14 percent for products on which VAT is charged. - Recommendation: consider using actual tax collected from public accounts as benchmark rather than deriving through product flow. - Comparison — National Accounts vs GFS taxes on products (selected exact figures, KSh): - National Accounts Total: 2016 537,918; 2018 653,946 - GFS Total: 2016 471,377; 2018 574,814 - Total differences (NA minus GFS): 2016 66,541; 2018 79,133 - % difference Total: 2016 13.1% ; 2018 12.8% - Construction: - Methodology appropriate; upward revision mainly attributable to new benchmark data and CIP and updated construction price indices. - Nominal construction output — Previous vs Current (selected years): - Previous 2016 826,006; 2019 1,197,296 - Current 2016 957,493; 2019 1,366,986 - Recommendation: adjust total output of construction to exclude construction material consumed by households when data available. - Real estate: - Upward revisions introduced with 2016 BM incorporating KIHBS and KPHC data on imputed rent and actual rents. - Nominal real estate — Previous vs Current: - Previous 2016 601,937; 2019 767,280 - Current 2016 774,891; 2019 1,035,989 - Recommendations: - Develop estimates of total space/rooms rented to refine imputed and actual rental income. - Consider differentiating the IC for owner-occupiers from actual renters. --- ### GDP by Expenditure (GDP-E), HFCE revisions, GGFCE, NPISH, and GFCF - GDP-E: - Annual estimates compiled in current prices (CP) and constant prices (KP); levels of components in 2016 obtained from 2016 SUT and annual estimates extrapolated. - HFCE: - Upward revisions to nominal HFCE from 2009–2016 followed by significant downward revisions from 2017−2019. - HFCE by COICOP — Current estimates (selected, KSh): - Food and non-alcoholic beverages: 2015 1,995,076 / 2016 2,228,350 / 2019 3,083,488 - Transport: 2015 683,617 / 2016 763,036 / 2019 1,069,332 - Total: 2015 5,127,186 / 2016 5,708,739 / 2019 7,799,421 - Recommendation: include detailed breakdown of revisions to HFCE and explanation of impacts from crop production, telecommunications, financial services, and transportation. - GGFCE and NPISH: - GGFCE revisions consistent with public admin and education revisions; compensation of employees plus intermediate purchases used. - NPISH current estimates based on NPISH association data; KNBS does not derive CFC for NPISH. - GFCF: - Upward revisions throughout the period for dwellings, ICT equipment and other machinery and equipment. - GFCF — Previous totals vs New series totals (selected): - Previous Total 2016 1,238,164; 2019 1,631,871 - New series Total 2016 1,435,384; 2019 1,881,412 - Differences (New minus Previous) — Total: 2015 208,523; 2019 249,541 --- ### Changes in inventories, trade, and statistical discrepancy - Changes in inventories: - Defined as entries into inventories less withdrawals less recurrent losses. - Revisions mainly due to petroleum products and changes in livestock numbers. - KNBS does not attempt to remove holding gains from stocks. - Table 23 — Revisions to Changes in Inventories (selected, KSh): - 2014: previous -24,203; current 64,225; Difference 88,428 - 2016: previous 43,910; current -3,381; Difference -47,291 - Trade in goods and services: - Current method based on Balance of Payments for goods and services. - Cross-border trade differentiated between neighboring (assumed informal) and others (formal). - Imports — previous vs current (selected, KSh): - 2014: previous 1,782,945; current 1,811,923; Difference 28,977 - 2016: previous 1,641,478; current 1,601,531; Difference -39,947 - Statistical Discrepancy (SD): - SD is difference between GDP-P and GDP-E; desirable for SD to be small and unbiased. - Table 25 — Statistical Discrepancy (levels, KSh): - 2009: previous 50.8; current 125,018.9; Difference 124,968.2 - 2015: previous -211,896.4; current -6,750.3; Difference 205,146.1 - 2016: previous -68,728.5; current 0.9; Difference 68,729.4 - Table 25 — Statistical Discrepancy (As percentage of GDP production): - 2009: previous 0.0; current 3.8; Difference 3.8 - 2016: previous -1.0; current 0.0; Difference 1.0 - 2019: previous -3.6; current 0.1; Difference 3.7 --- ### Annexes — FISIM calculations before and after adjustment (selected figures preserved exactly) - Annex II — FISIM Before Adjustment (Current Prices, cp): - Government cp: 2012 14,439; 2013 22,592; 2016 38,213; 2019 56,815 - Households cp: 2012 63,647; 2016 122,719; 2019 151,532 - Unallocated cp: 2012 114,003; 2016 182,540; 2019 199,214 - FISIM Total cp: 2012 192,088; 2016 343,472; 2019 407,561 - Fees and Commissions cp: 2012 48,490; 2016 63,802; 2019 88,435 - Annex III — FISIM After Adjustment (Current Prices, cp): - Government cp: 2012 5,672; 2016 10,474; 2019 8,907 - Households cp: 2012 72,415; 2016 160,810; 2019 193,544 - Unallocated cp: 2012 133,340; 2016 260,609; 2019 226,631 - FISIM Total cp: 2012 211,427; 2016 431,893; 2019 429,082 - Fees and Commissions cp: 2012 48,490; 2016 96,346; 2019 124,323 - Constant prices (kp) equivalents also provided in Annexes II and III with figures preserved exactly. --- ### Officials met during the mission - Mr. Macdonald Obudho — Director General, KNBS - Mr. Collins Omondi — Director Macroeconomic Statistics, KNBS - Mr. Benjamin Muchiri — Senior Manager, KNBS - Mr. Hiram Mbatia — Manager, National Accounts - Mr. Justin Yano Rutto — National Accounts Statistics Officer, KNBS - Mr. James Abuga — National Accounts Statistics Officer, KNBS - Ms. Lensa Apondi — National Accounts Statistics Officer, KNBS - Mr. Oliver Mukolwe — National Accounts Statistics Officer, KNBS - Ms. Doris Syombua — National Accounts Statistics Officer, KNBS *Source: 1kenea2022001 (IMF mission report extract).* ### 1. Nominal GDP Previous and Current__________________________________________________________________ 10 ### 1. Nominal GDP Previous and Current__________________________________________________________________ 10 ### Summary of mission outcomes and priority recommendations - A Technical Assistance (TA) mission was conducted in July 2021 to review data sources and methods used to produce revised estimates of the Kenyan National Accounts (NA) for the period 2009–2019 and to provide guidance on producing a revision report to be published at the time of the release. - Comprehensive revisions were implemented to adopt latest international accounting standards and integrate improved data sources and methods. - The mission observed significant revisions across 2009–2019; the most significant revision relates to the estimate of crop production, with notable revisions in the 2016 benchmark year and throughout 2009–2019. - Sources for benchmark-year revisions include: Kenya Integrated Household Budget Survey (KIHBS), Census of Industrial Production (CIP), Integrated Survey of Services (ISS), Micro Small and Medium Enterprise Survey (MSMES), and trade statistics for exports and imports. - Non-benchmark year revisions mainly due to significant downward revisions in the price indexes used to estimate nominal crop production and small revisions to crop volumes (market and own-account production). - Revisions to other industries (manufacturing, wholesale and retail trade, land transportation, real estate, construction) tended to be upwards due to incorporation of new data sources and improved coverage of services (telecommunication, transportation, financial). - Mission recommendations for future research include: - Investigate use of taxes on products as published by the Ministry of Finance as the benchmark estimate of taxes on products. - Consider removing the stock of government securities from the stock of loans when calculating FISIM. - Investigate developing volume indicators for both FISIM and insurance services. - Work with the Ministry of Agriculture to improve annual estimates of the volume of crop production. - Review KNBS revision policy to ensure timely incorporation of source-data revisions into the national accounts. - The mission recommends KNBS develop and release a revisions report concurrent with the revised national accounts, including detailed explanations of new data sources, methods, and calculations, and provide advance notice to key stakeholders (Central Bank, Ministry of Finance, Ministry of Agriculture). ### Priority recommendations (selected from Table 1 summary) - Target Date: September 2021 — Develop clear, detailed explanations of the data sources, methods and calculations used to produce the revised 2009-2019 national accounts and incorporate these into a revision report. — Responsible: KNBS - Target Date: September 2021 — Provide key stakeholders advance notice of the release date well in advance of the release. — Responsible: KNBS - Target Date: September 2021 — Release the revisions report at the time of the release of the revised estimates. — Responsible: KNBS - Target Date: TBA — Seek funding (staff and operational) to sustain the quality improvements realized during this comprehensive revision; regularize receipt of new source data used to produce the revised estimates. — Responsible: KNBS ### Detailed technical assessment — priority actions and milestones - The mission recommends KNBS include in the revision report: - A section highlighting revisions to both the overall level of GDP and the constant price growth rates, with contextual information where large revisions occur. — Target Completion Date: September 2021 - A table comparing new data sources used for revised manufacturing output and value added with previous data sources. — Target Completion Date: September 2021 - A table comparing MOA crop production volumes with KNBS demand-based estimates to clarify choice of data sources. — Target Completion Date: September 2021 - Detailed tables and analysis of data sources, methods and calculations used to estimate current and constant price estimates of crop production for Kenya’s largest crops. — Target Completion Date: September 2021 - Work with MOA to conduct a regular agriculture survey to improve domestic crop production estimates. — Target Completion Date: TBD - A table/chart comparing manufacturing output with related economic indicators (exports, number of manufacturing firms). — Target Completion Date: September 2021 - A table and analysis comparing previous and revised electricity generation data sources. — Target Completion Date: September 2021 - A section summarizing the special study undertaken to develop revised trade margins, including sample size, industries covered, and treatment of online sales. — Target Completion Date: September 2021 - Sections outlining new data sources used to estimate telecommunication output and value added by service (product); include provider and services coverage comparisons. — Target Completion Date: September 2021 - Analysis of output of mobile money services and mobile money transactions. — Target Completion Date: September 2021 - A section describing new data sources used to estimate passenger transportation services, confronted with fuel sales, gasoline imports, and tourist arrivals. — Target Completion Date: September 2021 - A detailed breakdown of revisions to household final consumption expenditure with explanations of how revisions to crop production, telecommunication services, financial services, and transportation impacted household spending composition. — Target Completion Date: September 2021 - Medium-priority research agenda items (Target Completion Date: TBD) include: - Examine use of a weighted average of actual lending and borrowing rates to calculate the reference rate. - Examine allocation of FISIM consumed by non-financial corporations by economic activity or by output shares as a second-best alternative. - Develop estimates of exports and imports of financial services. - Investigate alternative volume measures for insurance output (number or value of policies enforced). - Develop estimates of total space/rooms rented to refine imputed and actual rental income; consider differentiating IC for owner-occupiers from actual renters. - Adjust total output of construction to exclude construction material consumed by households. ### Background and overview of revision process - The report figures reflect work-in-progress estimates prepared by KNBS and may differ from published revised national accounts. - KNBS initiated a comprehensive revision and rebasing project in 2017; revised national accounts benchmarks were established for 2016 (previous benchmark year 2009). - Technical support provided by IMF East AFRITAC (AFE) (backstopped by IMF Statistics Department) and Statistics Sweden. - KNBS presented highlights of revised estimates in March 2021 for dissemination in April; concerns about significant downward revision in GVA for agriculture, forestry, and fishing required peer review. - The revised 2016 benchmarks incorporate new sources including: 2015/2016 KIHBS, ISS 2017, CIP 2018, Survey of Non-Profit Institutions Serving Households (NPISH 2019), Survey of Informal Transportation and Other Personal Services, 2016 MSMES, 2016 Census of Establishments (COE 2016), Corporate Income Tax data (CIT) for 2016, 2019 Study of Trade Margins, and 2019 Population and Housing Census (KPHC). - National accounts compilation aligned with the 2008 SNA. Supply and Use Tables (SUT) were produced for 2016 following 2008 SNA recommendations. - 2016 benchmark estimates were used to update the NA time series for 2009–2019; 2012 revised estimates were retropolated to 2009 using previous growth rates in most activities. - For activities with limited data, output indicators were used to derive output estimates and benchmark input-output ratios applied to derive intermediate consumption (IC) at constant prices; weighted IC price indices used as "reflators" to estimate IC at current prices. ### Revisions to nominal and real GDP — key statistics and findings - GDP in current prices was revised upwards by 8.1 percent in 2016 with all activities revised upwards except Agriculture and Forestry and Fishing activity which was revised downwards by 30.3 percent. - Annual GDP growth in constant prices was revised downward by an average of - 0.8 percentage points over the period 2009–2019. - The revision in the benchmark year (2016) was -1.8 percentage points. - The largest upward revision observed was +0.3 percentage points in 2012. - The largest downward revision observed was -0.8 percentage points in 2016. - The rebasing to 2016 reflected structural changes: increased shares of Transport and Storage, Information and Communication, Accommodations and Food Services, Manufacturing, Construction and Real Estate; crop production as a share of GDP was revised downwards over the entire period. - Chart data (from Figure 2) showing previous and current constant-price GDP growth rates by year are included in the source figures (years 2009–2019 shown). ### Recommendation (specific) - The mission found overall revisions to nominal and real GDP were in line with changes in source data and methods adopted in this revision. - The mission recommends KNBS include a section in the revision report highlighting revisions to both the overall level of GDP and the constant price growth rates, and where large revisions occur include contextual information demonstrating alignment with major economic events, policy implementation and related social indicators. *Source: 1kenea2022001 - 1. Nominal GDP Previous and Current__________________________________________________________________ 10 (KNBS/IMF mission report excerpt).* ### 14. The mission reviewed the revised estimates of crop production. Crop output and ### 14. The mission reviewed the revised estimates of crop production. Crop output and ### Summary of revisions - On average annual crop production was revised downward by 32.3 percentage points. - Average revision to constant prices growth rates in crop production was -1.9 percentage points. - The nominal monetary crop production at basic prices is largely estimated from the demand side (sum of intermediate consumption, final domestic consumption, inventories, and exports less taxes on products, trade margins and imports). - The 2016 estimate of household final consumption expenditures (HFCE) was obtained from the 2016 KIHBS and the estimate of intermediate consumption was obtained from detailed expense information from the CIP and exports less imports. - Market production in the 2016 benchmark year was revised downward for all crops in both current price (CP) and constant price (KP) output. - Own account crop production revisions: most important crops such as maize, potatoes and vegetables revised downwards; slight upward revisions to rice and sugar cane. ### Revisions to nominal output (selected figures, 2016, KSh Million) - Revised 2016 Benchmark vs Previous 2016 Estimate (selected crops): - maize Market: 97,374 (Revised) vs 128,573 (Previous) - maize own account: 58,409 vs 74,055 - wheat market: 11,425 (Revised) [previous not shown] - wheat own account: 1,017 (Revised) [previous not shown] - other cereals market: 11,528 vs 33,514 - other cereals own account: 4,142 vs 2,297 - beans and legumes market: 81,438 vs 129,978 - beans and legumes own account: 29,063 vs 61,608 - rice market: 1,727 vs 1,662 - rice own account: 1,743 vs 1,458 - Potatoes and other root crops market: 140,542 vs 385,482 - Potatoes own account: 44,910 vs 62,955 - vegetables market: 286,411 vs 513,255 - vegetables own account: 63,260 vs 111,204 - Total: 832,989 (Revised) vs 1,506,043 (Previous) ### Demand-side versus supply-side estimates (2016 illustrative comparisons) - Maize: - Maize Production (Million Bags – per MOA): 37.8 - Price (KSh/kg)- Annual Average: 35.4 - Output (MOA based Supply Side) KSh Million: 120,430.8 - Output (Use Side) KSh Million: 155,783.1 - Difference: -35,352.3 - % difference: -22.7% - Potatoes: - Potatoes Production (Million Tonnes): 1.9 - Price (KSh/kg)- Annual Average: 40.3 - Output (Supply Side) KSh Million: 74,667.6 - Output (Use Side) KSh Million: 185,451.6 - Difference: -110,784.0 - % difference: -59.7% - Beans: - Beans Production (Million Bags): 8.1 - Price (KSh/kg)- Annual Average: 76.6 - Output (Supply Side) KSh Million: 55,841.4 - Output (Use Side) KSh Million: 110,501.2 - Difference: -54,659.8 - % difference: -49.5% - Overall conclusion: Supply side (MOA) underestimates output for maize, potatoes, and beans; potatoes show a significant underestimation. ### Rationale for using demand-side data - KNBS deems coverage of demand-side sources better at capturing output produced and consumed by households (output for own final use). - MOA collects crop yield information but KNBS determined MOA estimates do not adequately capture own final use, leading to underestimation by point level agricultural estimates. - Reconciling production with exports and imports has posed challenges (example: 2017 MOA maize yields rose from 37.8 million bags in 2016 to 39.5 million bags in 2017 while imports more than doubled and exports were halved, indicating a maize shortage). ### Revisions to volumes and series incorporation - KNBS incorporated MOA revised estimates into the 2009–2019 time series for selected crops: - maize (revised for 2012, 2015, 2017) - beans (2012–2015) - wheat (2016, 2017) - tobacco (2012–2020) - tea (2019) - rice (2018) - new data from the Horticulture Department of Agriculture (HCDA) for cut flowers - Table of revisions to Volume Estimates (selected): - Maize (Million Bags) previous vs revised: - 2014: 33.7 vs 33.7 - 2015: 45.1 vs 42.1 - 2016: 37.8 vs 37.8 - 2017: 39.5 vs 36.4 - 2018: 44.6 vs 44.6 - 2019: 44.0 vs 44.0 - 2020: 44.4 vs 44.6 - Beans (Million Bags) previous vs revised: - 2014: 3.6 vs 6.4 - 2015: 4.4 vs 8.5 - 2016: 8.1 vs 8.1 - 2017: 9.4 vs 9.4 - 2018: 9.3 vs 9.3 - 2019: 9.3 vs 9.8 - 2020: 9.9 vs 10.1 - Rice-Marketed Prodn (Million shillings) previous vs revised: - 2014: 2,656 vs 2,656 - 2015: 2,322 vs 2,322 - 2016: 1,637 vs 1,637 - 2017: 1,418 vs 1,418 - 2018: 1,673 vs 1,929 - 2019: 2,389 vs 2,389 - 2020: 2,514 vs 2,572 - Potatoes (Million Tonnes) previous vs revised: - 2014: 1.6 vs 1.6 - 2015: 1.8 vs 1.9 - 2016: 1.6 vs 1.9 - 2017: 1.9 vs 1.9 - 2018: 2.0 vs 1.9 - 2019: 2.4 vs 2.2 - 2020: 2.4 vs 2.2 - New indicator - Volume Index for Potatoes: 2014: 87.8, 2015: 105.1, 2016: 100.0, 2017: 105.0, 2018: 102.5, 2019: 118.7, 2020: 118.7 ### Revisions to agriculture aggregates at current prices (Table 4) - Current estimates (KSh Million) for Agriculture, Output at basic prices, Intermediate consumption, Value added, gross: - 2014: Output at basic prices 905,830; Intermediate consumption 164,989; Value added, gross 740,841 - 2015: Output at basic prices 1,120,527; Intermediate consumption 200,502; Value added, gross 920,025 - 2016: Output at basic prices 1,283,508; Intermediate consumption 221,553; Value added, gross 1,061,955 - 2017: Output at basic prices 1,536,943; Intermediate consumption 259,138; Value added, gross 1,277,805 - 2018: Output at basic prices 1,603,422; Intermediate consumption 262,985; Value added, gross 1,340,437 - Previous estimates (KSh Million): - 2014: Output at basic prices 1,298,259; Intermediate consumption 231,915; Value added, gross 1,066,344 - 2015: Output at basic prices 1,700,195; Intermediate consumption 253,819; Value added, gross 1,446,376 - 2016: Output at basic prices 1,982,337; Intermediate consumption 281,795; Value added, gross 1,700,542 - 2017: Output at basic prices 2,670,379; Intermediate consumption 344,829; Value added, gross 2,325,549 - 2018: Output at basic prices 2,857,539; Intermediate consumption 391,367; Value added, gross 2,466,172 - % difference (Current vs Previous): - Output at basic prices: -30.2 (2014), -34.1 (2015), -35.3 (2016), -42.4 (2017), -43.9 (2018) - Intermediate consumption: -28.9 (2014), -21.0 (2015), -21.4 (2016), -24.9 (2017), -32.8 (2018) - Value added, gross: -30.5 (2014), -36.4 (2015), -37.6 (2016), -45.1 (2017), -45.6 (2018) - Agriculture output at current prices was revised downwards by 34.7 percent in 2016 (text statement). ### Methodology for deriving non-benchmark year estimates - KNBS uses demand-side BM estimates and extrapolates each demand component with a volume or constant price indicator, then reflates with appropriate price indices. - Examples of extrapolation: - BM estimate of HFCE extrapolated by annual crop volumes estimated by MOA for selected crops. - Intermediate demand extrapolated by a production or constant price volume indicator from manufacturing. - Constant price estimates of exports and imports mostly deflated using average prices paid to farmers. - Nominal estimates are obtained by reflating extrapolated constant price estimates with different price indices depending on crop and use (examples: maize intermediate demand reflated using average of CPI, average prices paid to farmers, and a rural market price index; HFCE for some crops reflated using average of CPI and rural market prices; beans use CPI as sole price index in some cases). ### Price index issues, farm gate prices, and impact on nominal estimates - Use of CPI implied annual purchaser prices and producer prices (PPI) move synchronously. - KNBS started collecting farm gate prices in 2019 in response to observations of exaggerated output for some crops beginning around 2014. - Farm gate price indices have been compiled and backcasted using prices collected from rural markets; these indices are used to monitor movement of CPI (used for reflation) and to ensure prior problems do not recur. Plan to integrate farm gate prices going forward as series lengthen. - In 2019 significant downward revision to some food components of the CPI for 2014–2019. Previous CPI for vegetables had grown over 600 percent from 2009–2019, whereas recalculated CPI for vegetables grew by 12 percent over the same period. As a result, previous nominal estimates were significantly overestimated; revisions to crop prices being downward resulted in significant downward revision in nominal crop production from 2014 through 2019. ### Detailed example methodologies and quantitative outcomes - Beans (Table 6) — selected current estimates (KSh): - Constant price intermediate consumption (excl restaurants): 16,381 (2015), 15,610.0 (2016), 18,115.3 (2017) - Total constant price output at constant prices excluding seeds: 68,485 (2015), 116,695 (2016), 127,082 (2017) - HFCE Const price estimates: 32,387 (2015), 37,105 (2016), 33,717 (2017) - Constant price estimates for Own accounts: 27,425 (2015), 29,063 (2016), 30,701 (2017) - Total constant prices incl own account: 102,587 (2015), 110,501 (2016), 106,244 (2017) - Nominal estimates for HFCE: 29,228 (2015), 37,105 (2016), 37,844 (2017) - Nominal estimates for own account: 24,750 (2015), 29,063 (2016), 34,459 (2017) - Total nominal estimates for beans: 87,091 (2015), 104,519 (2016), 103,060 (2017) - Potatoes (Table 7) — selected current estimates (KSh): - Total constant prices: 193,971 (2015), 140,542 (2016), 194,636 (2017) - Prices for HFCE using CPI Root crops: 80 (2015), 100.0 (2016), 112.0 (2017) - Nominal estimates for HFCE: 82,649 (2015), 98,379 (2016), 115,607 (2017) - Nominal estimates for own account: 37,763 (2015), 37,763 (2016), 52,799 (2017) - Total nominal estimates for potatoes (table labelled as beans in final line, but context is potatoes): 155,260 (2015), 178,304 (2016), 217,977 (2017) - The mission noted the volume indicator used to extrapolate HFCE, own account production and seeds was revised significantly upward for the years 2012 to 2015 due to revised MOA estimates. ### Implications - Large downward revisions to nominal crop production largely due to previously overstated price indices used in nominal calculations. - Revisions affected HFCE significantly because food is an important household expenditure component. - Supply side MOA data without adjustment understates output for key crops, with potentially large implications for national accounts if not reconciled with demand-side data. ### Recommendation - The mission recommends that KNBS include tables (like the ones above) in the revision report that detail the data sources, methods, and calculations that KNBS uses to estimate current and constant price estimates of crop production for Kenya’s largest crops. *Source: IMF staff mission text (excerpt) in 1kenea2022001 - 14. The mission reviewed the revised estimates of crop production. Crop output and* ### 29. The mission reviewed the revised estimates of manufacturing output. The mission ### 1kenea2022001 - 29. The mission reviewed the revised estimates of manufacturing output. The mission ### Manufacturing output revisions - KNBS revised nominal manufacturing output and value added upward over the entire time-period for overall manufacturing and its various sub-sectors, driven by incorporation of data from the 2018 Census of Industrial Production (CIP), MSMEs, corporate tax information for 2016, and KIHBS to estimate manufacturing activity by households. - Revisions to constant price manufacturing output and value added were minimal. - Recommendation: - Include a comparison table in the revision report showing previous data sources versus revised data sources. ### Table 8 — Output, IC for Food, Beverages, and Tobacco (selected figures preserved exactly) - Food Output - previous: 2012 634,041; 2014 748,230; 2016 901,605; 2017 987,291; 2018 1,061,633; 2019 1,100,536 - Food Output - current: 2012 635,645; 2014 778,727; 2016 899,851; 2017 981,304; 2018 1,031,780; 2019 1,063,428 - Food IC - previous: 2012 503,230; 2014 599,937; 2016 722,835; 2017 801,964; 2018 861,856; 2019 901,884 - Food IC - current: 2012 457,751; 2014 562,896; 2016 634,215; 2017 681,751; 2018 714,835; 2019 735,740 - Food Volumes - previous: 2012 476,176; 2014 560,508; 2016 603,098; 2017 604,693; 2018 652,097; 2019 658,652 - Food Volumes - current: 2012 714,790; 2014 852,894; 2016 899,851; 2017 908,346; 2018 963,821; 2019 980,432 - Beverage Output - previous: 2012 108,919; 2014 126,737; 2016 168,357; 2017 176,712; 2018 196,948; 2019 224,064 - Beverage Output - current: 2012 121,679; 2014 132,340; 2016 180,043; 2017 185,746; 2018 200,249; 2019 215,661 - Beverage IC - previous: 2012 62,531; 2014 75,080; 2016 93,045; 2017 97,089; 2018 118,815; 2019 137,977 - Beverage IC - current: 2012 61,186; 2014 59,387; 2016 81,428; 2017 87,993; 2018 93,114; 2019 104,484 - Beverage Volumes - previous: 2012 83,760; 2014 91,871; 2016 110,269; 2017 111,052; 2018 119,858; 2019 130,643 - Beverage Volumes - current: 2012 156,671; 2014 146,593; 2016 180,043; 2017 180,472; 2018 187,858; 2019 197,037 - Tobacco Output - previous: 2012 19,201; 2014 19,643; 2016 18,061; 2017 17,318; 2018 17,464; 2019 16,944 - Tobacco Output - current: 2012 14,523; 2014 15,673; 2016 18,964; 2017 18,492; 2018 18,108; 2019 18,157 - Tobacco IC - previous: 2012 11,559; 2014 12,925; 2016 15,325; 2017 15,322; 2018 15,604; 2019 16,322 - Tobacco IC - current: 2012 13,980; 2014 11,864; 2016 10,783; 2017 10,495; 2018 10,694; 2019 12,401 - Tobacco Volumes - previous: 2012 15,522; 2014 15,561; 2016 13,513; 2017 13,022; 2018 11,770; 2019 11,814 - Tobacco Volumes - current: 2012 15,974; 2014 16,801; 2016 18,964; 2017 18,452; 2018 17,997; 2019 17,949 - Recommendation: - Include a table/chart comparing manufacturing output with related economic indicators such as exports and the number of manufacturing firms recorded on the business register. ### Electricity supply — methodology and revisions - KNBS updated methodology to produce separate estimates for electricity generation, steam production, transmission, and distribution, increasing precision. - Generation: - Data sources: KenGen financial statements for KenGen, Kenya Power financial statement includes data for independent power producers. - Gross output based on sale of fuel and non-fuel to electricity distributors; output extrapolated by generation in Giga Watt Hour (GWH) for fuel and non-fuel and reflated using the producer price index for electricity. - Intermediate consumption based on expenditure components (costs of fuel, steam, water and plant operation and maintenance) from annual financial statements and deflated by an IC deflator. - Steam production: - Data from Geothermal Development Corporation (GDC) financial statement; deflated using a producer price index for electricity and an IC deflator. - Transmission: - Data from Kenya Electricity Transmission Company (KETRACO) annual financial statement; gross output based on wheeling revenue; IC from expenditure components (maintenance, office expenses, transport). - Distribution: - Data from Kenya Power annual financial statement; gross output derived as a margin (sale of electricity less cost of power purchased for resale); IC from expenditure components (maintenance, office expenses, consultancy); IC at constant prices computed using an IC deflator. - Recommendation: - Include a table in the revision report comparing previous data sources used to compile electricity generation etc. with the revised data sources. ### Table 9 — VA for Electricity Supply Components (values preserved exactly) - Value added 2012 2013 2014 2015 2016 2017 2018 2019 - Generation: 28,781 32,220 55,751 58,293 59,731 68,444 64,854 70,649 - Steam production: 5,640 5,351 5,851 7,618 7,272 7,529 7,655 6,422 - Transmission: 79 36 223 527 788 1,153 1,496 1,739 - Distribution: 19,697 22,700 25,635 39,173 54,224 58,476 65,787 62,798 - Total VA: 54,196 60,306 87,460 105,611 122,016 135,602 139,792 141,607 - Total VA - Previous: 48,194 53,901 55,190 89,358 131,617 141,255 154,339 163,643 - Percentage share (Generation / Steam production / Transmission / Distribution) by year preserved exactly: - Generation: 53.1 53.4 63.7 55.2 49 50.5 46.4 49.9 - Steam production: 10.4 8.9 6.7 7.2 6 5.6 5.5 4.5 - Transmission: 0.1 0.1 0.3 0.5 0.6 0.9 1.1 1.2 - Distribution: 36.3 37.6 29.3 37.1 44.4 43.1 47.1 44.3 - Total VA: 100 100 100 100 100 100 100 100 - Note/observation: - The mission noted the share of VA of electricity distribution was equivalent to electricity generation; small adjustments to distribution output and intermediate consumption were incorporated by KNBS (removal of fuel cost recoveries from Kenya Power revenue). ### Wholesale and retail trade; repair of motor vehicles and motorcycles - KNBS revised wholesale and retail trade upward over the entire time-period by applying trade margins calculated from a 2019 study on wholesale and retail trade margins; outputs cross-checked with sales turnover from administrative records. - Notable margin revisions (examples from Table 10 preserved exactly): - Maize (0111-1) Wholesale previous 5.0% Wholesale current 10.0% Retail previous 15.0% Retail current 25.0% - Wheat (0111-2) Retail current 25.0% - Potatoes and other root crops (0113-1) Wholesale previous 8.0% Wholesale current 10.0% Retail previous 18.0% Retail current 10.0% - Vegetables (0113-2) Wholesale previous 8.0% Wholesale current 10.0% Retail previous 3.6% Retail current 10.0% - Hardwood and softwood (0220-1) Wholesale previous 70.0% Wholesale current 25.0% Retail previous 0.0% - Stone, sand and clay (0810) Wholesale previous 42.0% Wholesale current 10.0% - Sugar and molasses (1072) Wholesale previous 10.0% Wholesale current 5.0% Retail previous 40.0% Retail current 15.0% - Wearing apparel (1400) Wholesale previous 12.0% Wholesale current 12.0% Retail previous 65.0% Retail current 30.0% - Soaps, detergents, cleaning preparations, toiletries (2023) Wholesale previous 15.0% Wholesale current 10.0% Retail previous 25.0% Retail current 24.0% - IC/Output ratios (Table 11, preserved exactly): - IC/O – previous: 2009 0.480; 2013 0.445; 2014 0.441; 2015 0.436; 2016 0.439; 2017 0.424; 2018 0.421; 2019 0.417 - IC/O – current: 2009 0.515; 2013 0.522; 2014 0.529; 2015 0.534; 2016 0.538; 2017 0.521; 2018 0.534; 2019 0.539 - Impact: - GVA (current prices) for wholesale and retail trade was revised upwards by 50 million Ksh in 2016 due to increased margins (output). - Recommendation: - Include in the revision report a summary of the special study used to develop revised trade margins, including sample size, industries covered, and whether margins from online sales were considered. ### Telecommunications - Estimates of telecommunications output and value added were revised upwards by 76.4 percent in 2016 due to increased coverage of providers and services and conversion from fiscal year to calendar year basis. - Data sources: financial reports of telecommunication companies, tax information, Communications Authority (CA) report; revenues from voice, messaging, mobile money, and data used as output indicators. - Classification: - Activity of mobile money treated as auxiliary activity in the telecommunication industry (not allocated to financial services). - Fees and commissions associated with mobile money considered as an IC component (fees to agents) and appropriately classified as primary output of households or auxiliary activities of financial institutions and other non-financial establishments. - Table 12 — Output and VA (values preserved exactly): - Output at current prices — Output – previous: 2014 161,671; 2015 172,931; 2016 191,567; 2017 205,729; 2018 229,191; 2019 249,631 - Output at current prices — Output – current: 2014 250,273; 2015 273,306; 2016 313,180; 2017 346,915; 2018 392,376; 2019 434,465 - VA at constant prices — VA – previous: 2014 139,623; 2015 149,969; 2016 164,798; 2017 182,984; 2018 203,713; 2019 221,552 - VA at constant prices — VA – current: 2014 151,743; 2015 167,577; 2016 184,834; 2017 201,957; 2018 220,615; 2019 241,894 - Mobile money agents and transactions (Table 13, values preserved exactly): - Number of agents: 2016 161,970; 2017 165,802; 2018 200,654; 2019 221,425; 2020 251,099 - Value of transactions (Billions): 2016 3,356; 2017 3,638; 2018 3,984; 2019 4,346; 2020 5,214 - Number of transactions (Millions): 2016 1,526; 2017 1,543; 2018 1,740; 2019 1,839; 2020 1,863 - Recommendation: - Include in the revision report a section outlining new data sources used to estimate output and value added for telecommunications by service provided, and a table identifying the number of providers and services in previous vs revised estimates. ### Transportation and storage — land transportation revisions - Revisions upward throughout 2009–2019 due to administrative data from the National Transportation Safety Authority (NTSA) and a 2019 special transportation study covering all road transport modes (boda bodas, matatu/minibuses/buses, taxis, tuktuks) and collecting trips, passengers, average distance, fares, and expenses. - Vehicle registration and inspection data used to retropolate 2019 benchmark back through time; volumes reflated with weighted CPI fares and transportation inputs (fuels-light diesel, maintenance, spare parts). - Input structure derived from IC/Output ratio obtained from income tax records and Integrated Survey of Services (ISS). - The new data sources resulted in an upward revision to nominal and constant price GVA by over 50 percent. - Table 15 — Transport and Storage (selected figures preserved exactly) - Transportation - Previous — Output at basic prices: 2009 480,033; 2014 893,141; 2015 956,867; 2016 1,012,051; 2017 1,092,259; 2018 1,248,602; 2019 1,399,449 - Transportation - Previous — Intermediate consumption: 2009 274,260; 2014 430,684; 2015 446,380; 2016 446,222; 2017 491,056; 2018 525,397; 2019 568,867 - Transportation - Previous — Value added, gross: 2009 205,774; 2014 462,457; 2015 510,488; 2016 565,829; 2017 601,203; 2018 723,205; 2019 830,582 - Transportation - Current — Output at basic prices: 2009 646,944; 2014 1,269,634; 2015 1,400,439; 2016 1,545,806; 2017 1,688,689; 2018 1,907,201; 2019 2,120,504 - Transportation - Current — Intermediate consumption: 2009 360,136; 2014 521,069; 2015 581,809; 2016 651,177; 2017 712,579; 2018 761,474; 2019 815,791 - Transportation - Current — Value added, gross: 2009 286,807; 2014 748,564; 2015 818,629; 2016 894,629; 2017 976,111; 2018 1,145,727; 2019 1,304,712 - Difference — Output at basic prices: 2009 166,910; 2014 376,492; 2015 443,571; 2016 533,755; 2017 596,431; 2018 658,599; 2019 721,054 - Difference — Intermediate consumption: 2009 85,877; 2014 90,385; 2015 135,430; 2016 204,955; 2017 221,523; 2018 236,077; 2019 246,924 - Difference — Value added, gross: 2009 81,034; 2014 286,107; 2015 308,142; 2016 328,800; 2017 374,908; 2018 422,522; 2019 474,130 - Recommendation: - Include a section in the revision report describing the new data sources used to estimate passenger transportation services and confront estimates with fuel sales, gasoline imports, and tourist arrivals. ### Financial and insurance services — FISIM and Central Bank treatment - Improvements to measurement of nominal and constant price estimates of Financial Intermediation Services Indirectly Measured (FISIM) including explicit service charges. - FISIM calculation: apply the midpoint between the effective interest rate on loans and deposits to all interest earning assets and liabilities (noting some assets such as debt securities are service free). Total FISIM output allocated to Households and Government based on stocks of loans and deposits provided by the Central Bank. FISIM consumed by corporations treated as intermediate consumption (not allocated by activity). - KNBS does not estimate exports or imports of FISIM. - Constant price FISIM estimated by extrapolating benchmark estimates using the deflated stock of loans and deposits. - Validation: - Net interest incomes from income statements of deposit taking institutions compared to FISIM estimates using the mid-point methodology were similar except for 2019. - Central Bank of Kenya (CBK): - Confirmed as a non-market producer in the national accounts. - Annual output for CBK obtained from income and expenditure statements and derived as the sum of costs: compensation of employees plus intermediate consumption and consumption of fixed capital. *Source: IMF staff mission review as presented in the supplied chapter excerpt.* ### 46. The mission reviewed the revised estimates of insurance services. The mission found ### 46. The mission reviewed the revised estimates of insurance services. The mission found ### Insurance services — findings and recommendations - Findings: - The revised upward revisions were primarily due to improved coverage of the additional auxiliary services offered by Kenyan insurance companies. - In current prices the cost of service for insurance was estimated appropriately using data on premiums, premium supplements, and claims incurred from the Insurance Regulatory Authority. - Constant price estimates for insurance could be improved: constant price estimates are derived by deflating the CP estimates for the life insurance component using CPI services while non-life insurance is deflated using CPI motor vehicles. - Alternate methods for constant price estimation were discussed. - Recommendations: - The mission recommends KNBS restrict its calculation of FISIM to intermediated loans and deposits and remove government securities from its calculations. - The mission recommends the KNBS NA research agenda includes examining the weighted average of actual lending and borrowing rates to calculate the reference rate. Data is readily available from commercial banks' and saving and credit societies’ profit and loss accounts. - The mission recommends the KNBS NA research agenda includes examining the possibility of allocating FISIM consumed by non-financial corporations by economic activity using information from lenders and depositors or an allocation based on shares of output as a second-best alternative. - The mission recommends the KNBS NA research agenda includes the development of estimates of exports and imports of FISIM. - The mission recommends the KNBS NA research agenda investigates alternative volume measure for insurance output such as number of policies or value of policies enforced. ### General Government Including Health and Education — methodology and revisions - Findings: - Methodology to derive output of general government is appropriate. - Final consumption expenditures for general government are obtained from the government’s chart of account for total COE plus other expenses, together with an estimate of FISIM consumed by government. - An adjustment is made for consumption of fixed capital of government based on consumption of fixed capital derived using perpetual inventory method. - A split by broad economic activity (Public Administration, Health and Education) is made based on nature of the government departments making the expenditure. - The 2016 benchmark introduced enhancements to final consumption expenditures for general government; part of upward revisions due to enhanced data sources especially for public corporations and a reclassification of public corporations that manage the construction sector from construction to the government sector. - Upward revisions throughout 2009−2019 for Education driven by additional data sources and improved current prices and constant price methodology; nominal output of government supplied education services estimated by sum of cost approach for each year; constant price improvements by deflating IC, COE, CFC, and other expense components separately. Private education nominal estimates reworked incorporating new data from KIHBS, MSMES and ISS for IC. - Key statistics (Table 16 — Current Output, Current IC, Constant Output, Constant IC): - Current Output (Public admin / Education / Health): - 2015: 615,900.7 / 462,101.5 / 230,084.7 - 2016: 668,980.9 / 499,239.7 / 258,314.9 - 2017: 741,536.2 / 538,764.4 / 285,628.9 - 2018: 820,348.3 / 589,978.8 / 300,119.8 - 2019: 900,701.4 / 633,576.2 / 319,921.6 - Current IC (Public admin / Education / Health): - 2015: 232,423.7 / 146,413.3 / 93,827.1 - 2016: 258,442.5 / 159,520.7 / 101,432.6 - 2017: 298,078.2 / 171,178.1 / 109,775.9 - 2018: 326,688.0 / 187,727.3 / 111,273.9 - 2019: 351,084.5 / 199,853.4 / 120,487.6 - Constant Output (Public admin / Education / Health): - 2015: 632,025.3 / 487,186.1 / 241,466.4 - 2016: 668,980.9 / 499,239.7 / 258,314.9 - 2017: 716,398.3 / 533,462.0 / 273,970.8 - 2018: 767,778.8 / 567,648.2 / 277,941.1 - 2019: 821,991.7 / 591,932.7 / 292,280.5 - Constant IC (Public admin / Education / Health): - 2015: 244,453.3 / 152,628.2 / 98,154.4 - 2016: 258,442.5 / 159,520.7 / 101,432.6 - 2017: 290,062.7 / 165,708.1 / 106,982.5 - 2018: 307,966.6 / 175,992.9 / 101,869.9 - 2019: 316,651.9 / 181,568.8 / 105,218.2 ### Taxes on Products — findings, comparisons, and recommendations - Findings: - Data on import duties and import excise taxes available from detailed trade dataset from customs authorities; taxes aggregated to SUT products based on concordance tables. - Data on domestic excise by product available. - For non-deductible VAT, total tax collected derived from product flow and allocated to SUT products based on known tax rates (16.0 percent or zero) multiplied by taxable demand estimated from the SUT. - Effective VAT rate slightly above 14 percent for products on which VAT is charged (less than prescribed 16.0 percent) — reflects “tax gap.” - Methodology reasonable, but mission recommends using actual tax collected from public accounts as benchmark rather than deriving through product flow and trade records to be consistent with GFS. - Comparison (Table 18 — National Accounts vs GFS taxes on products at current prices): - National Accounts (VAT / Import duties / excise taxes / Total): - 2012: 260,170. / 52,954.2 / 43,443.4 / 356,567. - 2013: 286,450. / 61,345.7 / 48,827.0 / 396,623. - 2014: 311,567. / 68,985.3 / 53,887.2 / 434,439. - 2015: 345,303. / 79,827.4 / 62,644.8 / 487,775. - 2016: 377,623. / 83,438.8 / 76,856.4 / 537,918. - 2017: 422,827. / 87,424.1 / 83,438.9 / 593,690. - 2018: 467,279. / 101,025. / 85,640.9 / 653,946. - GFS taxes (VAT / Import duties / excise taxes / Total): - 2012: 180,651 / 54,681 / 50,222 / 285,554 - 2013: 208,773 / 62,602 / 60,683 / 332,058 - 2014: 246,158 / 70,801 / 72,068 / 389,027 - 2015: 274,449 / 76,843 / 65,360 / 416,652 - 2016: 314,124 / 84,791 / 72,463 / 471,377 - 2017: 348,081 / 91,814 / 83,771 / 523,666 - 2018: 385,636 / 100,280 / 88,898 / 574,814 - Differences (National Accounts minus GFS) and % difference (VAT / Import duties / excise taxes / Total): - VAT differences: 79,519; 77,677; 65,409; 70,854; 63,500; 74,746; 81,644 - Import duties differences: -1,727; -1,256; -1,816; 2,985; -1,352; -4,390; 746 - excise taxes differences: -6,779; -11,856; -18,181; -2,715; 4,394; -332; -3,257 - Total differences: 71,014; 64,565; 45,412; 71,123; 66,541; 70,024; 79,133 - % difference VAT: 45.1% / 42.0% / 28.1% / 27.3% / 22.0% / 22.0% / 22.9% - % difference Import duties: -3.3% / -2.2% / -2.7% / 4.0% / -1.7% / -4.9% / 0.8% - % difference excise taxes: -8.6% / -13.8% / -17.8% / -2.3% / 3.1% / -0.2% / -1.9% - % difference Total: 23.1% / 19.7% / 11.3% / 15.8% / 13.1% / 11.8% / 12.8% - Recommendations: - Consider replacing current estimate of tax on products with tax data directly from the public accounts to avoid discrepancies with the GFS current deficit/surplus account. - Alternatively, provide users with a reconciliation table and explanation of differences between NA and GFS estimates of taxes on products. - Review with GFS data providers the public administrative data from the Ministry of Finance. ### Construction — findings and recommendation - Findings: - Methodology employed by KNBS appropriate given data availability. - Methodology for output and GVA of construction services unchanged with the 2016 BM, but updated volumes of construction inputs with refined weights and improved construction price indices introduced revisions to current and constant price estimates. - Upward revision mainly attributable to new BM data coupled with improved data from the CIP and updated construction price indices. - KNBS compiles construction output by activity: residential dwellings including traditional structures, non-residential structures, special construction, and civil engineering. - Estimating total value of materials used in construction comprises material inputs produced domestically and imported material; KNBS includes all material inputs when calculating construction activity. - Some construction material used by households for repairs and renovations; KNBS should adjust estimates to account for construction material consumed by households. - Nominal construction output (Table 19 — Previous vs Current): - Previous: 2012 513,390 / 2013 582,896 / 2014 683,376 / 2015 804,219 / 2016 826,006 / 2017 1,036,308 / 2018 1,104,968 / 2019 1,197,296 - Current: 2012 557,677 / 2013 624,078 / 2014 763,662 / 2015 881,854 / 2016 957,493 / 2017 1,074,221 / 2018 1,229,130 / 2019 1,366,986 - Recommendation: - The mission recommends that in the future, when data become available, the KNBS adjust total output of construction to exclude construction material consumed by households. ### Real Estate Activities — findings and recommendations - Findings: - Upward revisions associated with real estate activities introduced with the 2016 BM by incorporating information from the KIHBS and the 2019 Kenya Population and Housing Census. - KIHBS included questions on how much rent owner-occupiers could obtain and actual rent paid by renters — provided imputed rentals and actual rents. - Population census collected information by type of dwellings based on materials used; dwellings stratified by construction materials for rentals and owner-occupied dwellings. - For owner-occupied dwellings, actual space (number of rooms etc.) is required for better estimates. - Benchmark outputs for rented and owner-occupied dwellings estimated using number of households from the Kenyan Population and Household Census and actual rents from KIHBS. - Benchmark output at constant prices extrapolated using intercensal population growth and reflated using CPI for rentals to obtain current prices. IC derived from tax records and same ratio applied to owner-occupied and actual rent. - Nominal real estate (Table 20 — Previous vs Current): - Previous: 2012 384,519 / 2013 420,365 / 2014 467,885 / 2015 531,735 / 2016 601,937 / 2017 655,078 / 2018 710,326 / 2019 767,280 - Current: 2012 486,711 / 2013 528,409 / 2014 589,301 / 2015 677,327 / 2016 774,891 / 2017 864,898 / 2018 962,638 / 2019 1,035,989 - Recommendations: - For future research, KNBS should develop estimates of total space/rooms rented to refine estimates of imputed and actual rental income. - Consider differentiating the IC for owner-occupiers from actual renters. ### GDP by Expenditure Approach (GDP-E) — overview - Findings: - Annual estimates of GDP-E compiled in current prices (CP) and constant prices (KP). - Methods for compiling CP estimates of GDP-E and KP series broadly follow methods used for GDP-P constant price series. - Levels of each component series in 2016 obtained from the 2016 SUT and annual estimates compiled by extrapolating 2016 estimates using various indicators. ### Household Final Consumption Expenditure (HFCE) — revisions and recommendation - Findings: - Upward revisions to nominal HFCE from 2009–2016 followed by significant downward revisions from 2017−2019. - BM estimates for 2016 obtained from KIHBS for HFCE and own account. - Intervening years extrapolated: BM HFCE constant price estimate extrapolated with related volume indicators for each product; domestic constant price estimates reflated with appropriate purchaser’s price index (CPI by expenditure category). - Supply of each imported product allocated to final users to derive total demand. - Significant revisions to HFCE components aligned with revisions from GDP by production approach for food and non-alcoholic beverages, transportation, real estate, and other services. - HFCE by COICOP — Current estimates (selected categories and totals): - Food and non-alcoholic beverages: 2015 1,995,076 / 2016 2,228,350 / 2017 2,650,556 / 2018 2,764,495 / 2019 3,083,488 - Alcoholic beverages and tobacco: 243,151 / 269,759 / 273,844 / 300,844 / 320,262 - Clothing and footwear: 102,975 / 128,351 / 141,253 / 161,159 / 168,685 - Housing, water and fuels: 745,289 / 813,638 / 904,844 / 1,024,219 / 1,149,156 - Transport: 683,617 / 763,036 / 859,177 / 978,050 / 1,069,332 - Education: 231,948 / 254,394 / 260,388 / 283,461 / 313,907 - Goods not included elsewhere: 327,181 / 338,064 / 358,127 / 394,590 / 416,436 - Services not included elsewhere: 958,005 / 1,075,524 / 1,220,416 / 1,354,743 / 1,472,094 - Direct purchases in Kenya: -160,056 / -162,377 / -181,786 / -187,266 / -193,939 - Total: 5,127,186 / 5,708,739 / 6,486,820 / 7,074,296 / 7,799,421 - Recommendation: - The mission recommends KNBS includes a detailed breakdown of revisions to HFCE in the revisions report, accompanied by an explanation of how revisions to crop production, telecommunication services, financial services, and transportation services impacted the composition of household spending. ### General Government Final Consumption Expenditure (GGFCE) and NPISH - GGFCE: - Revisions to GGFCE consistent with revisions to public administration and education. - KNBS estimates compensation of employees plus intermediate purchases, including an estimate of CFC by function of government, using information taken directly from government accounts but aligned to 2016 SUT GFCE definitions. - KNBS includes an estimate of replacement cost CFC. - NPISH: - Current estimates based on data from NPISH association providing partial information on revenue and expense for notable activities (medical, food, children care etc.). - KNBS does not derive an estimate of CFC for NPISH. - Constant price estimates follow same procedure as outlined for GDP-P. ### Gross Capital Formation — revisions, tables, and differences - Findings: - Upward revisions throughout the period for residential dwellings, ICT equipment and other machinery and equipment. - Reclassification between other structures and custom structures. - Mineral exploration and evaluation declined in line with decline in petroleum production and prices. - Construction estimates based on input cost model used in estimation of GFCF and construction output in benchmark year (2016). - Merchandise imports (capital goods) used to estimate GFCF of machinery and equipment in benchmark year and annual estimates via HS-to-BEC correspondence. - No measurement of acquisition less disposal of valuables is made. - GFCF — Previous series (selected items and totals): - 2015: Dwellings 257,322 / Buildings other than dwellings 245,175 / Other structures 180,304 / Transport equipment 302,856 / ICT equipment 73,407 / Other machinery and equipment 251,648 / Animals 10,438 / Cultivated plants, crops 6,616 / Intellectual property products 30,601 / Total 1,358,366 - 2016: Dwellings 270,289 / Buildings other than dwellings 261,494 / Other structures 166,104 / Transport equipment 175,507 / ICT equipment 79,052 / Other machinery and equipment 232,368 / Animals 11,870 / Cultivated plants, crops 6,988 / Intellectual property products 34,493 / Total 1,238,164 - 2017: Dwellings 340,606 / Buildings other than dwellings 340,899 / Other structures 181,949 / Transport equipment 219,477 / ICT equipment 93,806 / Other machinery and equipment 259,475 / Animals 10,870 / Cultivated plants, crops 7,373 / Intellectual property products 38,429 / Total 1,492,884 - 2018: Dwellings 323,230 / Buildings other than dwellings 359,333 / Other structures 245,743 / Transport equipment 205,237 / ICT equipment 79,094 / Other machinery and equipment 259,062 / Animals 13,623 / Cultivated plants, crops 7,256 / Intellectual property products 43,138 / Total 1,535,716 - 2019: Dwellings 339,987 / Buildings other than dwellings 375,677 / Other structures 276,553 / Transport equipment 230,530 / ICT equipment 82,383 / Other machinery and equipment 256,323 / Animals 15,012 / Cultivated plants, crops 7,891 / Intellectual property products 47,514 / Total 1,631,871 - GFCF — New series (selected items and totals): - 2015: Dwellings 371,357 / Buildings other than dwellings 122,422 / Other structures 289,581 / Transport equipment 356,295 / ICT equipment 89,348 / Other machinery and equipment 265,979 / Animals 14,356 / Cultivated plants, crops 7,866 / Intellectual property products 49,685 / Total 1,566,889 - 2016: Dwellings 401,847 / Buildings other than dwellings 134,091 / Other structures 294,859 / Transport equipment 208,995 / ICT equipment 95,086 / Other machinery and equipment 246,330 / Animals 17,498 / Cultivated plants, crops 8,269 / Intellectual property products 28,409 / Total 1,435,384 - 2017: Dwellings 438,881 / Buildings other than dwellings 144,429 / Other structures 379,869 / Transport equipment 257,057 / ICT equipment 108,159 / Other machinery and equipment 270,681 / Animals 8,741 / Cultivated plants, crops 8,922 / Intellectual property products 26,017 / Total 1,642,756 - 2018: Dwellings 494,867 / Buildings other than dwellings 162,595 / Other structures 440,469 / Transport equipment 242,356 / ICT equipment 88,819 / Other machinery and equipment 270,322 / Animals 13,624 / Cultivated plants, crops 9,615 / Intellectual property products 17,655 / Total 1,740,321 - 2019: Dwellings 544,310 / Buildings other than dwellings 178,415 / Other structures 501,586 / Transport equipment 273,876 / ICT equipment 95,563 / Other machinery and equipment 259,317 / Animals 8,728 / Cultivated plants, crops 10,001 / Intellectual property products 9,615 / Total 1,881,412 - Differences (New series minus Previous series — selected line items): - Dwellings: 114,035 / 131,558 / 98,275 / 171,638 / 204,323 - Buildings other than dwellings: -122,753 / -127,403 / -196,469 / -196,738 / -197,262 - Other structures: 109,278 / 128,755 / 197,920 / 194,725 / 225,033 - Transport equipment: 53,439 / 33,488 / 37,580 / 37,118 / 43,347 - ICT equipment: 15,942 / 16,034 / 14,353 / 9,725 / 13,180 - Other machinery and equipment: 14,331 / 13,962 / 11,206 / 11,260 / 2,994 - Animals: 3,919 / 5,628 / -2,129 / 1 / -6,284 - Cultivated plants, crops: 1,250 / 1,281 / 1,549 / 2,359 / 2,110 - Intellectual property products: 19,084 / -6,083 / -12,413 / -25,483 / -37,899 - Total: 208,523 / 197,220 / 149,872 / 204,605 / 249,541 _Italic: Source — 1kenea2022001 (IMF mission report extract)_. ### 62. The mission also reviewed the revisions to changes in inventories. Changes in ### 1kenea2022001 - 62. The mission also reviewed the revisions to changes in inventories. Changes in ### Changes in inventories - Definition: "Changes in inventories is the value of the entries into inventories less the value of withdrawals less the value of any recurrent losses of goods held as inventories." - Coverage: "Changes in inventories is only estimated for a few products." - Main revisions drivers: - "The revisions to inventories are mainly due to revised estimates for petroleum products." - "Changes in livestock numbers, are also included as part of inventories." - "KNBS does not attempt to remove any holding gains from the stocks." - Table 23. Kenya: Revisions to Changes in Inventories - 2009: Chan in inv. previous 23,702; Chan in inv. Current 23,702; Difference 0 - 2014: Chan in inv. previous -24,203; Chan in inv. Current 64,225; Difference 88,428 - 2015: Chan in inv. previous -9,406; Chan in inv. Current 939; Difference 10,345 - 2016: Chan in inv. previous 43,910; Chan in inv. Current -3,381; Difference -47,291 - 2017: Chan in inv. previous 61,415; Chan in inv. Current 65,198; Difference 3,782 - 2018: Chan in inv. previous 59,999; Chan in inv. Current 26,116; Difference -33,883 - 2019: Chan in inv. previous 63,117; Chan in inv. Current 38,859; Difference -24,257 ### Trade in Goods and Services - Methodology: "The current method is based on data from the Balance of Payments for goods and services." - Treatment of cross-border trade: "The trade compilers differentiate between trade with neighboring countries and with others. The former is then assumed to be informal trade and the latter as formal." - Data reconciliation: "KNBS obtains and uses the total for the product flow. KNBS has reconciled the National Accounts estimates with the Balance of Payments estimates." - Table 24. Kenya: Imports Current and Previous (values) - 2013: Imports previous 1,575,731; Imports current 1,589,254; Difference 13,523 - 2014: Imports previous 1,782,945; Imports current 1,811,923; Difference 28,977 - 2015: Imports previous 1,734,755; Imports current 1,781,628; Difference 46,873 - 2016: Imports previous 1,641,478; Imports current 1,601,531; Difference -39,947 - 2017: Imports previous 1,973,102; Imports current 1,928,714; Difference -44,388 - 2018: Imports previous 2,042,985; Imports current 2,004,523; Difference -38,462 - 2019: Imports previous 2,081,480; Imports current 2,042,077; Difference -39,403 ### Statistical Discrepancy (SD) - Definition and interpretation: - "The statistical discrepancy (SD) had switched signs and was much larger in the earlier revision period." - "The current price estimates of GDP are presented with a statistical discrepancy (SD), that is, the difference between GDP-P and GDP-E." - "This estimate may be considered as a measure of the quality of the estimates of GDP. In general terms it is desirable for the SD to be both small and unbiased. The SD should vary equally between positive and negative values." - Table 25. Kenya: Statistical Discrepancy (levels) - 2009: Discrepancy previous 50.8; Discrepancy current 125,018.9; Difference 124,968.2 - 2015: Discrepancy previous -211,896.4; Discrepancy current -6,750.3; Difference 205,146.1 - 2016: Discrepancy previous -68,728.5; Discrepancy current 0.9; Difference 68,729.4 - 2017: Discrepancy previous -215,715.6; Discrepancy current -49,583.3; Difference 166,132.3 - 2018: Discrepancy previous -321,424.4; Discrepancy current 42,186.4; Difference 363,610.8 - 2019: Discrepancy previous -351,889.4; Discrepancy current 9,149.8; Difference 361,039.1 - Table 25. Kenya: Statistical Discrepancy (As percentage of GDP production) - 2009: Discrepancy previous 0.0; Discrepancy current 3.8; Difference 3.8 - 2015: Discrepancy previous -3.4; Discrepancy current -0.1; Difference 3.3 - 2016: Discrepancy previous -1.0; Discrepancy current 0.0; Difference 1.0 - 2017: Discrepancy previous -2.6; Discrepancy current -0.6; Difference 2.1 - 2018: Discrepancy previous -3.6; Discrepancy current 0.5; Difference 4.1 - 2019: Discrepancy previous -3.6; Discrepancy current 0.1; Difference 3.7 ### Officials Met During the Mission - Mr. Macdonald Obudho — Director General, KNBS - Mr. Collins Omondi — Director Macroeconomic Statistics, KNBS - Mr. Benjamin Muchiri — Senior Manager, KNBS - Mr. Hiram Mbatia — Manager, National Accounts - Mr. Justin Yano Rutto — National Accounts Statistics Officer, KNBS - Mr. James Abuga — National Accounts Statistics Officer, KNBS - Ms. Lensa Apondi — National Accounts Statistics Officer, KNBS - Mr. Oliver Mukolwe — National Accounts Statistics Officer, KNBS - Ms. Doris Syombua — National Accounts Statistics Officer, KNBS ### Annex I. Constant Price Crop Output — Previous and Current Estimates (selected series) - Maize (values) - Previous: 2012 114,124.2; 2013 120,313.2; 2014 118,575.9; 2015 146,952.5; 2016 139,672.1; 2017 120,823.1; 2018 152,575.5; 2019 158,994.3 - Current: 2012 135,009.5; 2013 140,693.6; 2014 140,045.4; 2015 167,282.9; 2016 155,783.1; 2017 148,469.2; 2018 172,951.6; 2019 167,255.6 - Previous growth rates: 5.4 -1.4 23.9 -5.0 -13.5 26.3 4.2 - Current growth rates: 4.2 -0.5 19.4 -6.9 -4.7 16.5 -3.3 - Other cereals (values) - Previous: 2012 19,810.5; 2013 18,327.7; 2014 26,080.3; 2015 26,886.7; 2016 27,976.0; 2017 27,965.9; 2018 35,046.6; 2019 51,625.9 - Current: 2012 22,443.3; 2013 25,355.1; 2014 26,651.3; 2015 25,981.6; 2016 15,670.3; 2017 28,385.1; 2018 39,023.2; 2019 54,981.8 - Previous growth rates: -7.5 42.3 3.1 4.1 0.0 25.3 47.3 - Current growth rates: 13.0 5.1 -2.5 -39.7 81.1 37.5 40.9 - Wheat (current only, values and growth rates) - Current: 2012 8,001.3; 2013 9,505.4; 2014 13,749.6; 2015 10,769.8; 2016 12,441.3; 2017 9,971.9; 2018 14,949.2; 2019 13,749.6 - Current growth rates: 18.8 44.7 -21.7 15.5 -19.8 49.9 -8.0 - Beans (values and growth rates) - Previous: 2012 81,339.7; 2013 81,197.7; 2014 72,412.5; 2015 93,277.7; 2016 130,347.3; 2017 141,949.2; 2018 143,675.4; 2019 140,457.1 - Current: 2012 87,337.5; 2013 98,978.3; 2014 96,821.3; 2015 102,587.5; 2016 110,501.2; 2017 106,244.2; 2018 111,927.7; 2019 123,404.4 - Previous growth rates: -0.2 -10.8 28.8 39.7 8.9 1.2 -2.2 - Current growth rates: 13.3 -2.2 6.0 7.7 -3.9 5.3 10.3 - Rice (values and growth rates) - Previous: 2012 4,373.0; 2013 4,490.2; 2014 5,023.8; 2015 5,364.2; 2016 5,084.4; 2017 4,640.3; 2018 5,982.3; 2019 7,623.9 - Current: 2012 2,896.8; 2013 3,109.4; 2014 3,475.9; 2015 3,818.8; 2016 3,469.6; 2017 2,969.8; 2018 3,806.1; 2019 4,828.4 - Previous growth rates: 2.7 11.9 6.8 -5.2 -8.7 28.9 27.4 - Current growth rates: 7.3 11.8 9.9 -9.1 -14.4 28.2 26.9 - Potatoes (values and growth rates) - Previous: 2012 61,052.8; 2013 84,549.3; 2014 119,582.8; 2015 136,385.1; 2016 121,860.2; 2017 149,687.8; 2018 153,716.6; 2019 169,678.9 - Current: 2012 134,972.9; 2013 167,920.1; 2014 163,072.3; 2015 193,971.1; 2016 185,451.6; 2017 194,636.4; 2018 189,973.7; 2019 219,110.1 - Previous growth rates: 38.5 41.4 14.1 -10.6 22.8 2.7 10.4 - Current growth rates: 24.4 -2.9 18.9 -4.4 5.0 -2.4 15.3 - Vegetables (values and growth rates) - Previous: 2012 146,018.9; 2013 149,704.1; 2014 154,271.4; 2015 158,381.8; 2016 161,846.0; 2017 166,202.8; 2018 171,979.1; 2019 176,754.7 - Current: 2012 328,678.4; 2013 333,851.9; 2014 342,213.7; 2015 347,322.2; 2016 349,671.5; 2017 356,418.8; 2018 368,418.5; 2019 375,166.6 - Previous growth rates: 2.5 3.1 2.7 2.2 2.7 3.5 2.8 - Current growth rates: 1.6 2.5 1.5 0.7 1.9 3.4 1.8 - Sugar cane, cut flowers, other perennial and non-perennial crops, tea, coffee, fruit and nuts, fibre crops, tobacco, and Total crop output are presented in the Annex with previous and current values and growth rates for 2012–2019. - Total crop output (values and growth rates) - Previous: 2012 657,130.2; 2013 702,626.7; 2014 750,527.1; 2015 819,440.1; 2016 859,344.9; 2017 880,088.1; 2018 942,203.6; 2019 980,279.3 - Current: 2012 1,114,783.4; 2013 1,190,925.1; 2014 1,208,865.4; 2015 1,272,810.6; 2016 1,269,924.3; 2017 1,269,035.0; 2018 1,342,138.5; 2019 1,388,475.6 - Previous growth rates: 6.9 6.8 9.2 4.9 2.4 7.1 4.0 - Current growth rates: 6.8 1.5 5.3 -0.2 -0.1 5.8 3.5 ### Annex II. FISIM Calculation Before Adjustment - Current Prices (cp) - Government cp: 2012 14,439; 2013 22,592; 2014 22,927; 2015 32,006; 2016 38,213; 2017 48,602; 2018 55,139; 2019 56,815 - Households cp: 2012 63,647; 2013 71,873; 2014 87,050; 2015 105,003; 2016 122,719; 2017 139,060; 2018 152,698; 2019 151,532 - Unallocated cp: 2012 114,003; 2013 124,335; 2014 144,826; 2015 167,189; 2016 182,540; 2017 178,539; 2018 181,944; 2019 199,214 - FISIM Total cp: 2012 192,088; 2013 218,800; 2014 254,803; 2015 304,198; 2016 343,472; 2017 366,202; 2018 389,782; 2019 407,561 - Fees and Commissions cp: 2012 48,490; 2013 55,151; 2014 64,999; 2015 64,212; 2016 63,802; 2017 71,681; 2018 74,881; 2019 88,435 - Rentals cp: 2012 617; 2013 698; 2014 821; 2015 815; 2016 810; 2017 918; 2018 953; 2019 1,109 - Constant prices (kp) - Government kp: 2012 18,397; 2013 27,235; 2014 25,882; 2015 33,982; 2016 38,213; 2017 45,762; 2018 51,404; 2019 51,057 - Households kp: 2012 81,095; 2013 86,643; 2014 98,267; 2015 111,484; 2016 122,719; 2017 129,928; 2018 138,034; 2019 130,320 - Unallocated kp: 2012 145,256; 2013 149,885; 2014 163,487; 2015 177,507; 2016 182,540; 2017 167,489; 2018 167,074; 2019 175,678 - FISIM Total kp: 2012 244,748; 2013 263,762; 2014 287,635; 2015 322,972; 2016 343,472; 2017 343,179; 2018 356,513; 2019 357,055 - Fees and Commissions kp: 2012 53,813; 2013 60,055; 2014 68,335; 2015 65,470; 2016 63,802; 2017 69,785; 2018 70,976; 2019 82,181 - Rentals kp: 2012 795; 2013 841; 2014 932; 2015 859; 2016 810; 2017 872; 2018 857; 2019 986 ### Annex III. FISIM Calculation After Adjustment - Current Prices (cp) - Government cp: 2012 5,672; 2013 5,510; 2014 6,408; 2015 7,292; 2016 10,474; 2017 11,312; 2018 9,883; 2019 8,907 - Households cp: 2012 72,415; 2013 82,243; 2014 100,077; 2015 122,872; 2016 160,810; 2017 186,593; 2018 197,557; 2019 193,544 - Unallocated cp: 2012 133,340; 2013 148,895; 2014 180,962; 2015 216,100; 2016 260,609; 2017 241,384; 2018 215,414; 2019 226,631 - FISIM Total cp: 2012 211,427; 2013 236,649; 2014 287,448; 2015 346,264; 2016 431,893; 2017 439,289; 2018 422,854; 2019 429,082 - Fees and Commissions cp: 2012 48,490; 2013 55,151; 2014 64,999; 2015 86,855; 2016 96,346; 2017 117,568; 2018 119,464; 2019 124,323 - Rentals cp: 2012 405; 2013 458; 2014 539; 2015 729; 2016 810; 2017 995; 2018 1,007; 2019 1,035 - Constant prices (kp) - Government kp: 2012 7,856; 2013 7,850; 2014 8,545; 2015 9,171; 2016 10,474; 2017 11,501; 2018 12,291; 2019 12,682 - Households kp: 2012 110,906; 2013 124,329; 2014 138,261; 2015 151,668; 2016 160,810; 2017 168,144; 2018 175,830; 2019 184,353 - Unallocated kp: 2012 182,298; 2013 205,688; 2014 231,442; 2015 260,075; 2016 260,609; 2017 245,063; 2018 254,198; 2019 300,314 - FISIM Total kp: 2012 301,060; 2013 337,867; 2014 378,248; 2015 420,914; 2016 431,893; 2017 424,708; 2018 442,319; 2019 497,350 - Fees and Commissions kp: 2012 53,813; 2013 60,055; 2014 68,335; 2015 88,557; 2016 96,346; 2017 114,458; 2018 113,234; 2019 115,530 - Rentals kp: 2012 522; 2013 552; 2014 612; 2015 768; 2016 810; 2017 945; 2018 905; 2019 920 *International Monetary Fund (Kenya report).* --- _Source: https://www.imf.org/-/media/files/publications/cr/2022/english/1kenea2022001.pdf_