Why KNBS has lost credibility

Analysts and industry leaders have questioned the validity of new economic data released by the national statistics agency, raising concerns that policy makers could be relying on inaccurate information to make key decisions.

Leaders in energy, tourism, agriculture and ICT sectors have pointed out glaring data anomalies in the National Economic Survey 2015 released by the Kenya National Bureau of Statics (KNBS) last week.  

Discrepancy in the data raises big concerns especially because the government heavily relies on these statistics to make decisions on the national budget and policy directives.

Among the most blatant misinformation in this year’s economic survey was the assertion that the country’s installed electricity generation capacity increased by just 81 megawatts last year. This is despite the fact that President Uhuru Kenyatta last year officiated a ceremony in which an additional 280 megawatts of geothermal power was connected to the national grid.

While KNBS data quotes the installed electricity generation capacity at 1,798 megawatts by the end of 2014, Kenya Power says the  installed capacity by that time was 2,211 megawatts. 

Kenya Power said the increase from the previous year, when the capacity was quoted at about 1700MW, is partly on account of completion of a 280-megawatt geothermal project by the Kenya Electricity Generating Company in Olkaria.  

WORSE THAN REPORTED

“We have seen an increase in the total installed capacity last year especially due to investment in additional geothermal generators, which has accelerated the reduction in the cost of electricity. At the moment, the total installed generation capacity stands at 2,211 megawatts,” Kenya Power managing director Ben Chumo said by phone.

The Energy Regulatory Commission (ERC) also raised the red flag over the KNBS data last week. The statistics body said the cost of petroleum products imported into Kenya last year went up by 5.6 per cent to Sh333 billion from Sh315 billion in 2013.  

However, the energy regulator says Sh257.3 billion was used to import petroleum fuels last year down from Sh261.7 billion recorded in 2013.

“Demand for petroleum products went up during the year (2014), but we experienced a drop in oil prices, which in our calculations resulted into a saving of Sh19.3 billion,” ERC acting director for petroleum Edward Kinyua told Smart Company by phone.

There was a significant drop in global oil prices in the last half of 2014, with crude prices hitting a six-year low of below $50 a barrel.

Investors in the tourism industry have also poked holes into the KNBS data, saying the industry’s performance is much worse than what the bureau reported. While the survey indicates that tourism declined by 11.1 per cent in 2014 due to lower numbers of international visitors  compared to 2013, the Kenya Tourism Federation CEO, Ms Agatha Juma, says the situation is worse than shown by the data.

“When we talk to the people on the ground — the hoteliers, parks and other players in the industry — and ask the challenges they are facing, the figures are higher than that,” Ms Juma told Smart Company.

In the telecommunications sector, the Economic Survey places Kenya’s mobile penetration rate at 78.3 per cent by December 2014.

This contradicts the information provided by the Communication Authority of Kenya (CA), which indicated the penetration was 80.5 per cent as at the end of last year.

Further, the survey captured a big reduction in international telephone traffic last year contrary to the information provided by the sector watchdog. The CA reports that international roaming increased with traffic from East Africa growing by 5.6 per cent to 127 million minutes by the end of 2014.

Figures on the level of contribution of the National Optic Fibre Broadband Infrastructure (NOFBI) project to the growth of the ICT sector are also not correct.

GLARING DISCREPANCIES

Whereas the auditor-general Edward Ouko noted that NOFBI has failed to attract sufficient revenue to sustain it, the statistics agency said the project has propelled ICT growth in Kenya, placing 2014 growth rate at 13.4 per cent.

Last year, over Sh12.5 billion was pumped into the project but it failed to generate profit due to mismanagement.

KNBS has cited constraints in human resource and funding as well as inefficiencies in its systems as the factors that continue to compromise efficiency and accuracy of its data collection and analysis.

In its strategic plan (2013 – 2017), KNBS acknowledges that development of statistics is faced by “glaring statistical discrepancies” arising from surveys and censuses that have not been carried out. As a result, there is lack of baseline data in some key indicators of national development.

Where statistics baseline figures exist, they may be obsolete and need revising.

The bureau has proposed a budget of Sh7.3 billion in 2015/2016 financial year to address the glaring statistical gaps, up from Sh1.9 billion allocated in the current financial year. To enhance the quality of data generated, the bureau has proposed a budget of Sh376 million  up from Sh251 million this year.

The bureau has also proposed a 135 per cent increase in budget allocation to Sh1.4 billion from Sh599 million to strengthen its “human and physical capital”.

The amount had been slashed from Sh647 million in the 2013/14  financial year to Sh599 million in the 2014/15 budget.

The funds would go into hiring more workers for the bureau to address the shortage it is facing currently.

At the moment, the bureau has 499 staff but says it needs an additional 674, to step up its core business of data collection, analysis and dissemination.

“The bureau will be expected to convince the National Treasury on the importance of funding statistical programmes so as to generate quality and timely statistical information,” the bureau says.

High turnover

“We have noted concerns that have been raised with regard to the high turnover of the staff that we have developed. We will see to it that this is addressed,”  said Planning and Devolution Cabinet secretary, Ms Ann Waiguru while launching the Economic Survey 2015.

Speaking to Smart Company by phone, KNBS’s director-general, Mr Zachary Mwangi, said the high turnover has mostly affected the non-technical staff. Mr Mwangi, however, could not comment on the glaring data errors identified in the report.

Experts point out  survey’s anomalies

•  The economic survey says the country’s installed electricity generation capacity increased by just 81 megawatts last year. This is despite the fact that President Uhuru Kenyatta last year officiated a ceremony in which an additional 280 megawatts of geothermal power was hooked to the national grid.

•  The statistics body said  the cost of petroleum products imported into Kenya last year went up by 5.6 per cent to Sh333 billion from Sh315 billion in 2013.  However, the energy regulator says Sh257.3 billion was used to import petroleum fuels last year down from Sh261.7 billion recorded in 2013.

•  While the KNBS survey indicates that tourism declined by 11.1 per cent in 2014 owing to poor international visitor numbers compared to 2013, the Kenya Tourism Federation CEO, Ms Agatha Juma, says the damage is worse than captured by the data.

•  The Economic Survey 2015 places Kenya’s mobile penetration rate at 78.3 per cent by December 2014. This contradicts the information provided by the Communication Authority of Kenya, which said penetration was 80.5 per cent.

• Survey captured a big reduction in international telephone traffic last year contrary to the information provided by the sector watchdog. The communications regulator says international roaming increased, with traffic from East Africa growing by 5.6 per cent to 127 million minutes by the end of 2014.

By Immaculate Karambu, Yvonne Kawira, Lillian Ochieng’ and Joshua Masinde.