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Investment for the future
In our economic descent from the general to the particular we shall use investment as our vehicle. The exposition will involve two different modes, the first a disaggregation of overall statistics on investment, the second an assembly of statistics on the pursuit of science and technology.
The figures that will be disaggregated are those on gross domestic fixed investment (see Table 4.7). Adjusting by GNP deflator (see Table 4.1) yields the figures in the third column. Ratios against GDP indicate that investment in Kenya was high, at approximately 25 per cent, in the generation after independence, and has been sustained at approximately 20 per cent of GDP in the last decade. In this latter period, and for a developing country as heavily indebted as Kenya, to have allocated a fifth of its annual output to investment is a considerable achievement.
The next task is to disaggregate investment into its components. For the shorter period 1979 to 1985 Kenyan government figures reveal the percentage breakdown in Table 4.8 and Table 4.9 (accumulated by van der Hoeven and Vandermoortele, 1987). The data in the latter table reveal declines in the portion of total capital formation directed towards manufacturing and transport, without any compensating rise in the portion directed to agriculture. (The rise in investment in the traditional sector is attributed by van der Hoeven and Vandermoortele to increases in the construction of traditional dwellings, in response to population increase: ibid.: 23.) So far as investment is concerned, what reallocation has taken place has been from manufacturing and transport to finance and other services; whether or not this reallocation was beneficial to the economy as a whole is arguable.
The only other aggregated statistics for Kenya relevant to our enquiry are those produced in two surveys of science and technology in all of Africa. One is of potential scientific and technological inputs, the other of outputs. The results of the first, conducted by UNESCO, and shown in Table 4.10, indicated that in 1982 there were in Kenya 16,241 scientists and engineers, and 45,952 technicians. Kenya's ratios of scientists, engineers and technicians per million of the population were then compared to the same ratios for eight other Sub-Saharan nations. Kenya's proportions were three times those of the next most well-endowed country, Senegal, and of an order of magnitude greater than the remainder.
Table 4.7 Kenya: public, private and total investments in absolute amounts and as a percentage of GDP, 1969-1991
|Year||Absolute amounts (billions of 1987 KSh)||% of GDP|
Total investment in absolute amounts and as a percentage of GDP: World Bank, World Tables 1991
The same conclusion can be drawn from the second survey, conducted by the World Bank (Zymelman, 1990), which measures an output of scientific and technological activity (defined as scientific papers published in over 3,000 scientific journals, for which the Institute of Scientific Information compiles a 'Science Citation Index'). Over the period 1981-1986, the order of standing, with numbers of articles per country in parenthesis, was Nigeria (4,529), Kenya (1,454), Sudan (558), Zimbabwe (407), Tanzania (393), Senegambia (358), Côte d'Ivoire (209), Ethiopia (219), Zambia (172) and Zaire (119) (ibid., 1-4: p. 14). Lest too much emphasis be placed on Kenya's high standing, the author of the study reports that there is a very strong correlation (R² = 0.95) between the measures of scientific and technological output, on the one hand, and measures of GDP, on the other (ibid.: p. 7). But this is to be expected, since progress in science and technology is closely associated, in the long run, with economic growth.
Table 4.8 Kenya: government revenues, expenditures and investment 1964-1991
|Year||Government current revenue (billions current KSh)||Government current expenditure (billions current KSh)||Government surplus (+)or deficit (-) (billions current KSh)||Government capital payments (billions current KSh)||Government consumption (billions of current KSh)||Government gross investment (% of total investment)|
1964-1968: Van der Hoeven and Vandermoortele, 1987, Table 2, p. 12
1969-1991: World Bank, World Tables, 1991, 1993
Table 4.9 Kenya: share of total investment (%) by sectors 1979-1985
|Trade and tourism||3.2||4.5||3.0||3.6||4.1||3.7||4.7|
|Ownership of dwelling||10.2||10.1||9.7||10.9||6.7||6.2||7.1|
Reproduced from Van der Hoeven and Vandermoortele 1987, Table A.4, p. 74
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