The high price of a First World Kenya

High income status within a generation is now official policy. Yet at the current growth, Kenya won't get there until well into the next century. The gap is about savings and investment, not vision.

In an address on July 30, President William Ruto invited the country to a National Conversation to write a development charter that will succeed Vision 2030.

Behind it sits the working group report chaired by Prof Peter Anyang Nyong’o and Prof Hiroyuki Hino. The phrase it uses is unambiguous: a First World, high income and industrialised nation within one generation.

Before we debate the route, we should be honest about the distance.

The World Bank classifies an economy as high-income when gross national income per person exceeds a threshold that is adjusted annually for inflation. For now, that threshold is $14,375. Kenya is at roughly $2,400. The threshold rises by around two percent a year.

Kenya’s economy grew by an average of 4.9 percent a year between 2010 and 2024, against a population growing at close to two percent.

That is about three percent per person per year.

Compound that against a threshold rising at two percent and Kenya reaches high-income status in roughly 180 years – around the year 2200. To arrive by 2063 instead, income per person would have to grow by about seven percent annually for 37 years, which implies annual GDP growth of roughly nine percent.