Out-Law / Your Daily Need-To-Know

Kenya’s economy moves into Africa’s top 10 after rebasing

Out-Law News | 08 Oct 2014 | 12:31 pm | 1 min. read

Kenya has become one of Africa’s top 10 economies after the country became the latest in the region to overhaul its gross domestic product (GDP) data.

Kenya’s National Bureau of Statistics (KNBS) said the nation’s GDP had grown by an estimated 25% after the base calculation year was changed from 2001 to 2009.

The move, which National Treasury secretary Henry Rotich said would help to “raise the profile of the economy to investors”, placed Kenya ninth in Africa’s GDP ratings table from 12th previously, ahead of Ghana, Tunisia and Ethiopia but below Sudan.

Economic output was calculated to be 4.76 trillion Kenyan shillings ($53.3 billion) after rebasing, up from 3.8 trillion Kenyan shillings ($42.6bn), the minister for devolution and planning Anne Waiguru said, according to Reuters.

According to the KNBS, the process of rebasing and revising the national accounts statistics was initiated in 2010. The main objectives were to implement the 2008 System of National Accounts (2008 SNA), the international statistical standard for national accounts adopted by the UN Statistical Commission, in addition to changing the base year and revising the annual and quarterly national accounts statistics for the period 2006 to 2013, the KNBS said.

The KNBS said the revision included the development of supply and use tables “as an integral part of the national accounts statistics, the bureau said.

Last April, Nigeria emerged as the largest economy in Africa after the country overhauled its GDP data for the first time in 20 years. Nigeria’s statistician-general Yemi Kale said Nigeria’s GDP stood at $510 billion, compared to $262.6bn in 2012 under data compiled by the World Bank.

After Nigeria’s move Carlos Lopes, the executive secretary of the UN's Economic Commission for Africa (ECA), said the real size of many African economies was likely to be larger than their current estimates, suggesting that the role of the continent in the global economy “might have been underestimated”.

Lopes said that using a recent base year and applying the 2008 SNA “implies that the price structure is more representative of the economy”. Also, a wider basket of products and activities are considered when national accounts are calculated.

ECA’s African Centre for Statistics reported from a survey conducted in January 2014 that seven African countries still based on 1990 or earlier years, 10 countries had base years between 1991 and 2000, and a further 19 had base years between 2001 and 2005.

Last January, the ECA, African Union Commission and the African Development Bank launched a project to support the implementation of the 2008 SNA across the continent. It is expected that all African countries “will soon adopt” the 2008 SNA classification and methodologies for compiling their national accounts to ensure better comparability, ECA said.