Kenya has come a long way in the last 20 years: from a country plagued by poverty and political turmoil to a rising economic power that at one point outperformed the regional average for eight consecutive years, with GDP growth above 5 percent.1 However, new research from the McKinsey Global Institute (MGI) reveals that this growth has not been uniformly enjoyed by all Kenyans.
The MGI Pixels of Progress report uses new research techniques that combine official GDP per capita and life expectancy data with satellite-enabled luminosity studies and other methodologies to break the world up into more than 40,000 geographical areas, providing a granularity that is 230 times more detailed than a country-level view allows.2 At this resolution, a more nuanced picture of Kenya’s development progress for the period 2000 to 2019 emerges—spotlighting those areas that have done well and those that have lagged, providing unprecedented insight that could help bring new clarity to business leaders and policy makers looking to cement the country’s position as a leading economy in the region.
The value of a subnational perspective
The MGI study shows that, while Kenya experienced an average annual GDP per capita growth of 1.8 percent between 2000 and 2019, growth ranged widely from below 0 to above 4 percent subnationally across microregions. Places with the highest GDP and GDP per capita growth rates were more common in the Central, Coast, and Nairobi provinces.
The area with the largest concentration of microregions with declining GDP per capita was the northeast, around the Garissa, Mandera, and Wajir regions. This does not mean that overall economic activity declined in these places—in fact, GDP growth was positive in most cases—but population grew faster, causing GDP per capita to fall. This decline, which is masked by the more buoyant country average, could be a red flag to the country that is still recovering from the negative impacts of the COVID-19 pandemic amid a tightening global environment.
Considering 2019 values rather than growth rates, the MGI study showed higher GDP per capita in Nairobi, the capital city, followed by surrounding counties such as Kiambu. Some coastal areas, like Lamu or Mombasa, also had GDP per capita that was above the national average of $4,500, while it was lowest in the counties bordering Somalia and more internal areas like Baringo and Kakamega.
While Kenya’s income growth was mixed, the country experienced a positive and extensive improvement in life expectancy over the past 20 years. Growth in life expectancy appeared to be among the highest in regions in the west, around the Nyanza and Western provinces, and on the coast. On average, counties that in 2000 had shorter life spans grew their life expectancy faster than those that started with a higher baseline. By 2019, these microregions still generally had lower life expectancy, but the gap was narrower than in 2000. In other words, this was a story of both overall growth and catch-up from the bottom. Interestingly, and contrary to many other countries where the population in the capital city has a higher life expectancy, Nairobi’s life expectancy comes slightly below the national average.
Pixels of Progress: An African Perspective
Granular insights are key to unlocking future progress
To hold onto these considerable gains, both in terms of life expectancy and GDP per capita growth, Kenya cannot afford to rest on its laurels. While its economy had shown considerable resilience to the enormous shock of the pandemic, the MGI research highlights that, subnationally, there can be significant variation worth paying attention to.3
Understanding the downside as well as the upside of the country’s development story is likely to be key in moving forward. While increased government investment and robust domestic demand, coupled with lower oil prices and the transition to a multiparty democracy, have all helped promote stability and spur the country’s economic growth, other factors within the country are also causing some regions to lag behind.
Knowing how progress has unfolded in Kenya at a granular level may help us to learn from those places that were successful and understand what could be done differently in regions that are lagging (exhibit). It may also help us direct resources with greater precision to areas where pockets of inequality persist and per capita income is declining. This could help narrow the gaps in development and create a more equitable future for all.
This high-resolution research approach holds value for the private sector, too, with the potential to help uncover new opportunities to deliver products and expand footprints and product mixes, as well as provide insight into new pools of prospective consumers and employees in places hidden in a country-level view.
As we look to progress in 2023 and beyond, this level of insight could be invaluable. It is important—both for the country and its citizens, as well as for the sub-Saharan African region as a whole—that Kenya keeps up the momentum it has gathered since 2000 and stays on the path to becoming an upper-middle-income country. Given what’s at stake, we can’t afford to gloss over the cracks.
