How Kenya became part of the ‘Africa rising’ debate

A view of Nairobi. FILE PHOTO | NMG 

By ALLAN ODHIAMBO

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A fresh computation of Kenya’s economic data in 2014 pushed the country to a middle-income nation status—embedding it to the “middle-class and Africa is rising” narrative.

Kenya crossed the United Nations’ $1,045 gross domestic product (GDP) per capita threshold with the September 2014 rebasing of its economy which showed it was 25 per cent larger than initially estimated.

Some of the most profitable sectors in Kenya — communications and property— were not considered in earlier calculations of GDP which used 2001 as a base year. The feat was confirmed by the World Bank in July 2015 which said its estimates of gross national income per capita (GNI) had placed Kenya, Bangladesh, Myanmar and Tajikistan in the league of lower-middle income countries.

When the World Bank issued the confirmation in 2015, it estimated Kenya’s GNI per capita income at about $1,290 (Sh132, 870). As at 2016 the bank had reviewed Kenya’s GNI upward to about $1,380(Sh142, 140).

According to the World Bank, countries in this category have a GNI per capita of more than $1,046 (Sh107,738) but less $4,125 (Sh424, 875). Those in the upper middle-income have yearly income levels of $4,126 (Sh424,978) to $12,735 (Sh1.3 million).

GNI is a broad-based measure of income generated by a nation’s residents from international and domestic activity. GNI per capita measures the average amount of resources available to persons residing in a given economy, and reflects the average economic well-being of a population.

Each year on July 1, the World Bank revises the income classification of the world’s economies based on estimates of GNI per capita for the previous year. The bank also uses the updated GNI estimates in its classification of economies to determine lending eligibility.

Kenya’s cross-over to the lower middle-income economy status has however remained on the radar of economists amid fears of retardation especially because the feat was not backed by sustained economic growth over time and only benefited from the rebasing of the country’s economy.

Kenya’s economy expanded by five per cent year-on-year in the second quarter of 2017 compared with 6.3 per cent in the same period in 2016, data by the Kenya National Bureau of Statistics (KNBS) showed.

The effects of a prolonged drought into the first-half of the year and negative sentiments and anxiety from a prolonged electioneering is expected to hit the country’s economic growth this year