A view of Nairobi. FILE PHOTO | NMG
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
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