Kenya’s annual output of goods and services is about 25 per cent greater than previously thought, revised data from the national statistics bureau shows.
The country has now overtaken three other African nations -- Ethiopia, Ghana and Tunisia -- to enter a World Bank table of the Top Ten economies in Africa.
Figures released Tuesday changing the base calculation year to 2009 from 2001 show a larger increase than had been anticipated, pushing the country into the lower ranks of the World Bank’s so-called middle income nations.
The Kenya National Bureau of Statistics findings are the result of more accurate data on key sectors such as property and telecoms.
The nation’s rebased Gross Domestic Product for last year is now estimated at KShs4.76 trillion (about $55 billion), up from KShs3.8 trillion, the minister for devolution and planning, Anne Waiguru, told a news conference.
Economic growth for the year has also been put at 5.7 per cent, up from 4.7 per cent.
The nation’s per capita GDP, the wealth produced annually divided by the population, rises from $999 (about KShs88,000) to $1,246 (KShs109,000).
The World Bank defines nations with GDP per capita of between $1,045 and $4,125 as “lower middle income”. Such nations are not eligible for interest-free loans typically offered to poorer nations. However, analysts say this is not likely to have any effect on Kenya since investors and lenders have already been treating it as if it were already a middle income country.
“We do not expect (the middle income status) to change very much in the near term,” says Ms Razia Khan, Standard Chartered’s regional research head for Africa. “This data only confirms the view investors have long held.”
World Bank comparative GDP statistics for 2013 show that, by going up from $41 billion to $55bn, Kenya has overtaken Ghana ($48bn), Tunisia ($47bn) and Ethiopia ($46bn).
Kenya jumps about ten places globally and now has a larger economy than Guatemala ($54bn), Bulgaria ($53bn), Macao SAR/China ($52bn), Costa Rica ($50bn), Slovenia ($47bn), Lithuania ($46bn) and Lebanon ($44bn).
The rebasing exercise means debt levels fall as a proportion of GDP, a closely watched ratio. This could give the government some leeway for more borrowing to help finance its plans.
The move to middle income status will disqualify Kenya from some categories of concessional lending, Ms Khan says. However, given its increasing reliance on non-concessional lending, she adds, this is not likely to have any immediate market impact. An IMF official has also said that certain types of soft loans would still be available to Kenya to help it weather economic shocks.