Kenya adjusts its GDP

Kenya was elevated into Africa's top 10 economies on Tuesday after the country revised its statistical data and increased the size of its gross domestic product by 25 percent.

The nation's economic output shot up from 3.8 trillion shillings ($42.6 billion, 33.7 billion euros) to 4.76 trillion shillings after a process known as rebasing, which saw the base year of Kenya's GDP calculation change from 2001 to 2009, Anne Waiguru, the minister for devolution and planning told reporters in the capital, Nairobi.

The revised data lifted Kenya to the No. 9 spot among Africa's economies, ahead of Ghana and Tunisia. The GDP growth rate also shot up from an estimated 4.7 to 5.7 percent once the country's statistics agency, the Kenya National Bureau of Statistics (KNBS), updated its figures to more closely reflect the country's current economic environment.

The new data took into account growth in key industries, including agriculture and manufacturing, as well as previously uncounted ones, such as Kenya's burgeoning mobile phone money transfer sector and other informal businesses.

Kenya is badly in need of fresh capital to improve its decrepit infrastructure. The GDP growth will help lower the country's GDP-to-debt ratio and could allow it borrow more, but analysts have cautioned against getting hopes up too high.

"This gives us a little bit of welcome breathing space … not an opportunity to open the cash register," said public policy and economic analyst Robert Shaw.

Waiguru sounded a similarly sober note on Twitter.

The revision raises per capita GDP to more than $1,200, according to the KNBS statisticians, placing Kenya firmly among the world's lower middle income nations.

In the short run, such a development could stem the flow of development aid flowing into the country, where many people live below the poverty line and electricity is scarce. But it does send a positive signal to investors that Kenyans have income to spend.

Kenya's GDP revision followed that of Nigeria, which changed its base year to 2010 from 1990 earlier this year, catapulting the oil-rich nation ahead of South Africa to become Africa's biggest economy.

pad/cjc (Reuters, www.knbs.or.ke)