Kenya will continue to receive concessionary loans from the World Bank even after the economy achieved middle-income ranking.
Diariétou Gaye, the World Bank’s country director for Kenya, said Tuesday that the multi-lateral lender will offer Kenya cheaper loans.
She said the World Bank looks at a country’s poverty levels and the gross national income (GNI) per capita – earnings generated in an economy divided by a country’s population – adding that Kenya was still below the bank’s threshold on these measures.
Latest data place Kenya’s GNI at $1,160 (Sh103,600) against the World Bank’s cap of $1,215 (Sh108,500) for accessing cheap credit.
“Kenya’s GNI per capita is now above the lower-middle income threshold, but below the IDA (International Development Association) eligibility cut-off,” said Ms Gaye.
She made the comments when authorities revealed that Kenya’s gross domestic product (GDP) was estimated to be 25 per cent bigger after the authorities changed the base calculation year to 2009 from 2001, pushing the country into the continent’s top 10 economies.
The new GDP was set at Sh4.76 trillion in 2013 after the rebasing, up from Sh3.8 trillion. This placed Kenya ninth in Africa’s GDP rankings from 12th, above nations like Ghana, Tunisia and Ethiopia.
With a population of about 44 million people, the new GDP figure implies economic output per capita stands at $1,246 (Sh111,000).
That would push Kenya into the club of middle income states, according to the World Bank’s $1,045 to $12,746 (Sh93,300-Sh1.14m) band.
Economists had fretted that a higher per capita ranking would make it difficult for Kenya to benefit from some aid designed for the poorest countries.
The thinking of other multi-lateral lenders are expected to be line with World Bank’s position in regards to advancing Kenya cheap credit.
Ms Gaye said that Kenya remained a poor country with 40 per cent of the people living below the poverty line.
In 2006, those living below the poverty line stood at 47 per cent while in 1999 the level was 56 per cent, showing that the current poverty level is a reduction from the previous high levels.