Business
Kenya becomes a middle income nation – now 9th largest economy in Africa
Changes in assessing agriculture, manufacturing and real estate accounted for most of the GDP rise. Technology and related fields are now treated as a standalone sector, taking into account a vibrant industry in Kenya, which has pioneered mobile telephone payments systems and exported the idea across Africa and beyond. The economy could also get a further boost in a few years when commercial oil production is expected to start.
With the rebasing, economic growth was revised to 5.7 percent in 2013, up from the previous estimate of 4.7 percent, a figure that had been below expectations and was partly blamed on a spate of Islamic militant attacks and a decline in tourism.
“The new numbers are credible and they constitute an important improvement in the economic and statistical knowledge base for Kenya,” Diariétou Gaye, the World Bank’s country director for Kenya, said, adding that a World Bank team joined other experts conducting a peer review of the rebasing exercise.
Based on a debt figure of 2.4 billion shillings (US$26.9 million) released in August after Kenya’s heavily oversubscribed, maiden Eurobond, the debt-to-GDP ratio falls to about 50 percent from 57 percent previously, according to a Reuters calculation.
With a population of about 44 million people, the new GDP figure implies economic output per capita stands at more than US$1,200. That would push Kenya into the bracket of middle income states, which according to the World Bank is within the US$1,045 to US$12,746 band.
A higher income ranking means it might not benefit from some aid designed for the poorest countries, economists say. Conversely, investors may be more attracted to a nation with a population that has more cash to spend, although many investors have already factored that into their calculations.
The kind of investment flow already attracted by Kenya, implies that investors already treated it as a middle income country.
Source: Reuters
