The World Bank has confirmed Kenya’s lower-middle income country status following the change in the way the size of its economy is calculated which showed it was 25 per cent larger than previously estimated.
The bank said in its latest estimates of the gross national income per capita (GNI) that Kenya, Bangladesh, Myanmar and Tajikistan have now joined the league of lower-middle income countries.
According to the World Bank, countries in this category have a GNI per capita of more than $1,046 (Sh99,024) but less $4,125 (Sh390,513). Those in the upper middle-income have yearly income levels of $4,126 to $12,735.
Kenya’s GNI per capita income is estimated at about $1,290 (Sh127, 215). While we need to measure development progress in different ways, income-based measures, such as GNI, remain the central yardstick for assessing economic performance,” said Kaushik Basu, World Bank chief economist and senior vice president in a statement.
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.
“Our latest data shows that in terms of this indicator, the world’s economic geography has changed a lot,” Mr Basu said.
Kenya revised its economic data in September last year, expanding its GDP by 25 per cent. 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.
While the recalculation showed lower debt ratios, which offered the government room for more borrowing and increased foreign investor confidence, the figure brought little change to much of the population. Poverty levels in the country remain at over 40 per cent.
“Kenya barely breached the threshold of the lower middle-income country classification and only did so with the help of the instant growth effect of rebasing,” Apurva Sanghi, the World Bank’s lead economist for Kenya, said earlier.