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Kenya to unveil over 20pc GDP jump on Tuesday after rebasing
Kenya will on Tuesday release half-year economic data that show the size of the economy has increased by nearly a quarter following the completion of changing the base year for computing output.
The review of national economic data – commonly known as rebasing – is expected to increase the size of Kenya by between 20 and 25 per cent in the level of gross domestic product previously reported.
The government told investors in June during the debut Eurobond that the rebasing would increase the size by 20.6 per cent, earning the country a middle-income status.
Other African nations that have revised the year they use as a base to calculate output include Nigeria, which vaulted to the top of African economies by size earlier this year after it finished the exercise.
“We will be seeing new sectors appear with the most obvious being communications as a separate entity from transport, and real estate where we will be capturing rent data,” Terry Ryan, chairman of Kenya National Bureau of Statistics (KNBS) said Thursday.
“Some service sectors will be subdivided. None of the old sectors will disappear but some will, however, not carry less weight, such as transport, wholesale and retail. But the overall profile of economic growth is, however, unlikely to be much different as we have been capturing most of the information already.”
KNBS data is currently based on figures from 2001 which will now be recast to 2009 – the new base year and reference point – to present an accurate reflection of Kenya’s economy.
The new economic data is expected to cement Kenya’s position as East Africa’s biggest market and Africa’s fourth-largest economy after Nigeria, South Africa and Angola.
Analysts said although becoming a middle-income country is good for Kenya’s standing as an investment destination; it was bound to come with its own challenges.
As a middle-income economy, Kenya will no longer qualify for the many trade concessions it currently enjoys as a low-income country.
The country could also lose its eligibility for grants, concessional loans and debt write-offs when its GDP per capita rises above the $1,036 (Sh92,339) threshold that the World Bank has set for middle-income nations.
But it could raise the country’s profile to attract investors and creating room to chalk up more debt.
The Vision 2030 secretariat says the statistical review will have no impact on the welfare of households.
Prof Wainaina Gituro, acting director general at Vision 2030 Delivery Secretariat, said earlier Kenya must focus on flagship infrastructure projects like the Lamu Port and South Sudan Ethiopia Transport Corridor, standard gauge railway and Konza technopolis to deliver growth.
This, he says, is the only way the country could boost household’s disposable incomes and lift workers purchasing power through faster income rises.
