The goal of this piece is to examine policy issues surrounding Kenya’s economic data, specifically the scope, timeliness, extent, and specificity of data produced by Kenya’s statistical agency, and to emphasize the importance of this public good.
Economic data from the Kenya National Bureau of Statistics (KNBS) is a public good. KNBS economic data have two characteristics in common with public goods: it is non-rivalrous in consumption and non-excludable in access. It is non-rivalrous because using public data has no impact on or does not reduce the amount of data available to others. It is non-excludable because it is impossible to keep others from enjoying access to economic data. In a free market, a public good is frequently (though not always) under-supplied because its non-rivalrous and non-excludability characteristics create an incentive not to pay[i].
Economic indicators are generated from economic data. An economic indicator is a piece of economic data, typically on the macroeconomic scale, that analysts use to interpret current or future investment opportunities. These indicators can also be used to assess an economy’s overall health[ii]. This makes economic data an important ingredient in making decisions at the household, firm and government levels.
KNBS is the primary government agency in Kenya for collecting, analyzing, and disseminating statistical data. The KNBS’s mandate is derived from the Statistical Act No. 4 of 2006 (Revised 2019)[iii]. Based on the IEA’s nearly three decades of daily interaction with Kenya’s economic data, it is safe to say that the KNBS is one of Kenya’s most credible institutions, particularly in terms of data production and integrity.
Policy and Context Issues with Kenyan Economic Data
Even for data that has already been produced, there is an urgent need to generate more specific and detailed economic data that goes beyond aggregates and breaks down the indicators by specific geographic regions. A good example is the publication of Kenya’s Quarterly Labour Market Surveys, in which economic indicators such as employment and unemployment are aggregated and not specified by geographical location. Using high-level aggregated data to formulate economic policy for the entire country would significantly reduce the efficiency of economic policy deployed to Kenya’s labour market because the labour market is heterogeneous and solutions should be generated from specific data.
According to a survey of data on the KNBS website, the National Statistical Office has been lagging behind in publishing specific segments of economic data such as Quarterly GDP, Quarterly Balance of Payment reports, and so on, while publishing some other economic data on time such as CPI and inflation rates data, leading economic indicators, the national census, different surveys, and so on. The Economic Survey and Statistical Abstract are the two most important publications issued by the KNBS. Over the last five years, the performance of the release of the economic survey has been mixed. It has always been customary to release an economic survey before the budget but this has not been the case in the last 7 years. The statistical abstract has suffered the same fate, arriving nearly 5 months late in the last three years.
The explanation could come from resource issues and fiscal consolidation from the government of Kenya. a review of allocations shows that allocations have been inconsistent. The allocations declined from Ksh 1.81 billion to Ksh 1.53 billion and increased to Ksh 1.54 billion.
The Kenya National Bureau of Statistics’ ability to produce economic data is harmed by the decrease in resource allocations. Reduced resource allocation of Ksh 300 million, as shown in the chart, represents a significant reduction in KNBS purchasing power, which has a significant impact on data production capability.
The collection, compilation, analysis, abstraction, and publication of economic data must occur on a timely basis for economic data to be of maximum utility in decision making. For example, timely forecasts of inflation data are used by firms to adjust wages at the beginning of respective fiscal years, and this is useful in avoiding inflationary wage pressures.
The Central Bank’s monetary policy committee, for example, meets regularly to assess economic performance and make monetary policy decisions, including on the Central Bank Rate. To fulfil its mandate under Article 231(2), the committee could use various tools, such as the Phillips Curve, in the analysis of the economic outlook and the formulation of monetary policy at the central bank, which would necessitate detailed data on unemployment, wages, and inflation, among other economic variables. It also allows oversight bodies like Parliament and economic watchdogs (think tanks, CSOs) et al to follow through with its policy decisions.
Economic data released on-time support the efficient development of markets within the economy by allowing market participants to form expectations and decision-makers to make more targeted decisions.
Conclusion
Extending the scope, timeliness, and accessibility of this public good allows for the timely generation of economic data for maximum utility in the household, business, and government decision making (Parliament, Judiciary, Executive branch and Constitutional Commissions). Slowing the production of this public good has the unintended consequence of undermining oversight efforts, particularly those led by non-state actors, as well as endangering the market’s integrity.
Photo credits: UnSplash
[i] Pettinger, Tejvan. “Definition of Public Good – Economics Help.” Economics Help, July 28 2019. https://www.economicshelp.org/micro-economic-essays/marketfailure/public-goods/.
[ii] Barone, Adam. “Economic Indicator Definition.” Edited by Michael J Boyle and Marcus Reeves. Investopedia, 2019. https://www.investopedia.com/terms/e/economic_indicator.asp.
[iii] “Statistical Act No. 4 of 2006,” 2019. https://www.knbs.or.ke/wp-content/uploads/2020/12/Statistics-Act-4-of-2006-Revised-Edition-2019.pdf.
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While Kenya has long implemented the NHIF (National Hospital Insurance Fund) whose core mandate is to provide medical insurance coverage to all its members and their declared dependants and also to make medical care affordable, enrolment rates, particularly in the voluntary and informal sectors, remain low. Yet, NHIF is the most common type of health […]
Introduction According to the United Nations, Double Taxation Agreements (DTAs) are “bilateral agreements between two countries which allocate taxing rights over income between those two countries thereby preventing double taxation of income. The main objective of DTAs therefore, is to prevent and or eliminate avoidance and evasion of taxes on income and capital by both […]
Courts as Monopolies Access to justice is fundamental in any democratic society, ensuring individuals can pursue their legal rights and seek redress for grievances. However, when courts operate as monopolies, it can have implications for access to justice. Monopolies have exclusive control or dominance over a particular market or industry. Courts are monopolies because they […]
Post date: Thu, Jun 2, 2022 |
Category: Economic data |
By: Leo Kipkogei Kemboi, |
The goal of this piece is to examine policy issues surrounding Kenya’s economic data, specifically the scope, timeliness, extent, and specificity of data produced by Kenya’s statistical agency, and to emphasize the importance of this public good.
Economic data from the Kenya National Bureau of Statistics (KNBS) is a public good. KNBS economic data have two characteristics in common with public goods: it is non-rivalrous in consumption and non-excludable in access. It is non-rivalrous because using public data has no impact on or does not reduce the amount of data available to others. It is non-excludable because it is impossible to keep others from enjoying access to economic data. In a free market, a public good is frequently (though not always) under-supplied because its non-rivalrous and non-excludability characteristics create an incentive not to pay[i].
Economic indicators are generated from economic data. An economic indicator is a piece of economic data, typically on the macroeconomic scale, that analysts use to interpret current or future investment opportunities. These indicators can also be used to assess an economy’s overall health[ii]. This makes economic data an important ingredient in making decisions at the household, firm and government levels.
KNBS is the primary government agency in Kenya for collecting, analyzing, and disseminating statistical data. The KNBS’s mandate is derived from the Statistical Act No. 4 of 2006 (Revised 2019)[iii]. Based on the IEA’s nearly three decades of daily interaction with Kenya’s economic data, it is safe to say that the KNBS is one of Kenya’s most credible institutions, particularly in terms of data production and integrity.
Policy and Context Issues with Kenyan Economic Data
Even for data that has already been produced, there is an urgent need to generate more specific and detailed economic data that goes beyond aggregates and breaks down the indicators by specific geographic regions. A good example is the publication of Kenya’s Quarterly Labour Market Surveys, in which economic indicators such as employment and unemployment are aggregated and not specified by geographical location. Using high-level aggregated data to formulate economic policy for the entire country would significantly reduce the efficiency of economic policy deployed to Kenya’s labour market because the labour market is heterogeneous and solutions should be generated from specific data.
According to a survey of data on the KNBS website, the National Statistical Office has been lagging behind in publishing specific segments of economic data such as Quarterly GDP, Quarterly Balance of Payment reports, and so on, while publishing some other economic data on time such as CPI and inflation rates data, leading economic indicators, the national census, different surveys, and so on. The Economic Survey and Statistical Abstract are the two most important publications issued by the KNBS. Over the last five years, the performance of the release of the economic survey has been mixed. It has always been customary to release an economic survey before the budget but this has not been the case in the last 7 years. The statistical abstract has suffered the same fate, arriving nearly 5 months late in the last three years.
The explanation could come from resource issues and fiscal consolidation from the government of Kenya. a review of allocations shows that allocations have been inconsistent. The allocations declined from Ksh 1.81 billion to Ksh 1.53 billion and increased to Ksh 1.54 billion.
The Kenya National Bureau of Statistics’ ability to produce economic data is harmed by the decrease in resource allocations. Reduced resource allocation of Ksh 300 million, as shown in the chart, represents a significant reduction in KNBS purchasing power, which has a significant impact on data production capability.
The collection, compilation, analysis, abstraction, and publication of economic data must occur on a timely basis for economic data to be of maximum utility in decision making. For example, timely forecasts of inflation data are used by firms to adjust wages at the beginning of respective fiscal years, and this is useful in avoiding inflationary wage pressures.
The Central Bank’s monetary policy committee, for example, meets regularly to assess economic performance and make monetary policy decisions, including on the Central Bank Rate. To fulfil its mandate under Article 231(2), the committee could use various tools, such as the Phillips Curve, in the analysis of the economic outlook and the formulation of monetary policy at the central bank, which would necessitate detailed data on unemployment, wages, and inflation, among other economic variables. It also allows oversight bodies like Parliament and economic watchdogs (think tanks, CSOs) et al to follow through with its policy decisions.
Economic data released on-time support the efficient development of markets within the economy by allowing market participants to form expectations and decision-makers to make more targeted decisions.
Conclusion
Extending the scope, timeliness, and accessibility of this public good allows for the timely generation of economic data for maximum utility in the household, business, and government decision making (Parliament, Judiciary, Executive branch and Constitutional Commissions). Slowing the production of this public good has the unintended consequence of undermining oversight efforts, particularly those led by non-state actors, as well as endangering the market’s integrity.
Photo credits: UnSplash
[i] Pettinger, Tejvan. “Definition of Public Good – Economics Help.” Economics Help, July 28 2019. https://www.economicshelp.org/micro-economic-essays/marketfailure/public-goods/.
[ii] Barone, Adam. “Economic Indicator Definition.” Edited by Michael J Boyle and Marcus Reeves. Investopedia, 2019. https://www.investopedia.com/terms/e/economic_indicator.asp.
[iii] “Statistical Act No. 4 of 2006,” 2019. https://www.knbs.or.ke/wp-content/uploads/2020/12/Statistics-Act-4-of-2006-Revised-Edition-2019.pdf.
Case Adjournments is one of the key issues that contributes to case backlogs because it reduces the efficiency of courts. An adjournment in a legal setting involves pausing or temporally stopping ongoing proceedings to be continued at a later time, date, or location. It may also indicate the end of the day’s proceedings. Parties involved […]
Introduction In February 2023, the Kenyan government announced its intention to establish a framework that will enable Savings and Credit Cooperative Societies (SACCOs) to extend loans to each other. This inter-Sacco lending framework shall be set up by the Sacco Societies Regulatory Authority (SASRA) and was anticipated to be in effect from August 2023. This […]
While Kenya has long implemented the NHIF (National Hospital Insurance Fund) whose core mandate is to provide medical insurance coverage to all its members and their declared dependants and also to make medical care affordable, enrolment rates, particularly in the voluntary and informal sectors, remain low. Yet, NHIF is the most common type of health […]
Introduction According to the United Nations, Double Taxation Agreements (DTAs) are “bilateral agreements between two countries which allocate taxing rights over income between those two countries thereby preventing double taxation of income. The main objective of DTAs therefore, is to prevent and or eliminate avoidance and evasion of taxes on income and capital by both […]
Courts as Monopolies Access to justice is fundamental in any democratic society, ensuring individuals can pursue their legal rights and seek redress for grievances. However, when courts operate as monopolies, it can have implications for access to justice. Monopolies have exclusive control or dominance over a particular market or industry. Courts are monopolies because they […]