Average Growth Rates during the election periods from 1992 to 2013


Post Date: 15 June 2016   |   Category: Economic Growth   |   Hits: 1483


Electioneering period in Kenya has often been characterized by high level of politicking. As a consequence, greater focus during this period has mostly been on politics, and this may have had an effect on general economic progress of the country.

 
On 26th February 2016, Dr. Mukhisa Kituyi, the Secretary General of United Nations Conference on Trade and Development, was concerned with the effect of political campaigns on Kenya’s economy. He urged Kenyans to reduce political temperatures in the country and focus more on growing its economy. He further said, “It is sad that the country registers a decline in its economy due to incessant political bickering”.  This brief provides an analysis with an aim of ascertaining whether or not the above claim is true. 
 
This analysis will involve exploring the GDP growth rates from 1963 to 2014 to examine trends in economic performance and identify whether there exists any patterns that lead us to confirm that economic performance is affected by political campaigns. The years of general elections will form a criterion upon which the comparison of GDP growth rates would be made (here we make an assumption that election campaigns are epitomized at this period hence would have the highest impact on economic performance of the country).  The growth rates on election years will be compared with those on non-election years. Aware of the fact that GDP growth rates may be affected by occasional factors such as drought, terrorism and economic sanctions, this analysis covers a long period of time (51 years); from 1963 to 2014. Analyzing GDP rates over a long period minimizes the effect of occasional factors.
 
Chart 1: Trend in annual GDP growth rates for Kenya
source: World Bank
 
The chart above illustrates the trend in GDP growth rates (constant 2005) from 1963 to 2014. The trend reveals the general economic performance of Kenya since 1963 by looking at annual changes in the volume of the final goods and services produced in the country.  The constant GDP growth rates remove the effect of inflation; this enables us to observe the real economic performance across the period. The analysis is summarized in Table 1 below:-
 

Table 1: Summary of GDP growth rates for respective years (1963 – 2014)
Source: World Bank 
 
Note: The values used in the table are the same values used in the Chart 1 above
 
Table 1(a) lists the all years (irrespective of election years) when the GDP growth rates were at the highest level. The corresponding GDP rates are the observed peaks along the trend line in Chart 1 above. Table (b), on the other hand, provides a summary of the years (irrespective of election years) when the GDP growth rates were at the lowest level. The corresponding GDP rates are the observed troughs along the trend line in Chart 1 above. Table 1(c) exclusively shows the general election years that Kenya has had since independence and their corresponding GDP growth rates.  
 
From Table 1(b), we evaluate the number of election years that the GDP growth rate was at the lowest point (i.e. troughs in Chart 1 above). This is important in finding out the probability that a lower GDP growth rate will be witnessed on an election year. Note: GDP growth rates for 2008 are also at the lowest point and this decline is mainly attributed to the post-election violence that was witnessed. This has however not been included in the analysis simply because we are only interested in the effect of the political campaigns on economic performance on an election year and not non-election years. This summary is presented in the table below
 
Source: Author’s calculation from World Bank
 
In the period before the multipartyism (1963-1990), it is observed that out of the total five general elections, there was only one election year on which Kenya witnessed a lower GDP growth rate i.e. 1983. Therefore, in this particular period, the chance that a lower GDP growth rate was likely to be witnessed on an election year is 20%. 
 
In the period during the multipartyism (1990-2014), it is observed that out of the total five general elections, the election years on which Kenya witnessed a lower GDP growth rates were three, i.e. 1992, 1997 and 2002. Therefore, in this particular period, the chance that a lower GDP growth rate was likely to be witnessed on an election year is 60%.
Overall, out of ten general elections Kenya has had since independence, four record a lower GDP growth rate implying that there is a 40% chance of witnessing a lower GDP growth rate on an election year in Kenya. 
 
From the above analysis, it is observed that there are more election years recording lower GDP growth rates in the period during multipartyism than in the previous period (1963-1990). It is also observed that the average GDP growth rate for the election years after 1990 (Table 1(c) above) is lower at 2.58% than those before 1990 at 5.43%. This suggests that negative impact of elections has been greatly witnessed in the multiparty period than in the previous period of 1963-1990.