The other day the government went to the market with two 10- year bonds, hoping to raise Sh30 billion from the offer.
As a matter of fact, these were not fresh offers but bonds which were re-opened, having been floated much earlier.
The results of the offer were published in the newspapers on Thursday.
It shows that demand for bonds way outstripped what was in supply, with total bids received coming to Sh49 billion. It is yet another illustration of a fundamental dynamic happening in the financial sector: the fact that commercial banks — the biggest players in the market for government securities — are continuing to shift money from lending it to businesses and households to packing it on government paper.
What happened to the mantra of private sector-led growth? In surprises me that despite all the signs of a stagnating economy — a big drop in loans disbursed by banks, a slump in electricity consumption by industrial users, an unprecedented upsurge in the number of listed companies issuing profit warnings, widespread financial distress among the leading department stores, stagnating truck and vehicle sales, a spike in non-performing loans even in the books of grade A-rated banks, and a slump in the dollar value of capital goods imports — our leaders persist in projecting rosy growth for the country.
As a measure of well-being, the reliability of GDP statistics have been widely criticised in academic literature.
It gets worse in countries like ours where GDP statistics is produced by a chronically under-funded entity such as the Kenya National Bureau of Statistics that falls way below in the priorities of government budgetary allocations.
It finds itself incapable of conducting regular research work such as household surveys, industrial surveys and population censuses.
We all agree that it is the quality of growth that matters— not the quantity. Yet here our government and its cheerleaders at the IMF and the World Bank – keep congratulating themselves for achieving GDP growth rates which have no direct bearing on lives of ordinary people.
Recently, we gave much significance and play in the media to the fact that the World Bank had revised its growth forecasts for Kenya by a few basis points. But does it really matter?
I tried to find out the formula they used to adjust their numbers. It runs as follows: that for every 100 milliliters shortfall of rain, GDP declines by between 0.3-0.5 basis points.
On this basis, the World Bank estimates drought conditions in Kenya to account for at least 0.4 per cent drop in their earlier GDP growth forecasts for 2017. Arbitrary, to say the least.
Which brings me to the latest edition of the Economic Survey.
When the statisticians tell you that the informal sector created 747,300 new jobs last year, what do they mean? How do you count informal sector jobs — what do you include and what do you exclude?
A fast-growing informal sector is a symptom of an economy that has lost the capacity to create decent jobs for its citizens.
When you see the informal sector growing much faster than the formal sector – it is just a reflection of the number of citizens who have been forced to put up with low-paying, low-quality jobs.
I would have also wanted to see statistics on the widening inequality in Kenya.
And I do not just mean disparities in incomes such as salaries and bonuses and earnings from trade and agriculture.
Inequality in this society gets more pronounced when you compare sections of society with enough capital to invest — shares, government paper, and urban property, with sections of society without the wherewithal to invest in these inflated assets.
Every so often our economists reel out statistics showing how hundreds of thousands of jobs are created in the informal sector.
But do we even pause to ask about the quality of jobs in the informal sector — working conditions, working hours, or the return on effort?