NAIROBI: Kenya has been forced to go for high interest rate loans after it graduated to a middle-income economy.

These non-concessional loans from banks and bilateral countries have seen the country accumulate huge public debts.

According to civil society representatives at the ongoing 14th United Nations Conference on Trade and Development, the arbitrary manner in which some African countries have been graduated to a low-middle income status is to blame for the rising debt levels threatening to cripple some of the economies.

Deputy Executive Director of Tax Justice Network, Jason Braganza, noted that civil society will be pushing for a better mechanism of graduating countries from low income into middle-income status.

"We support UNCTAD's efforts of looking at a better mechanism for the developing countries to undertake vigorous analysis before graduating to middle-income," said Mr Braganza at a press briefing.

Kenya is among the few African countries that have made this transition. In 2014, the country moved from being a least developed country to a developing country after it rebased its economy, factoring such sectors as real estate and ICT in the computation of its gross domestic product.

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But the transition came at a cost as the country lost out on some of the non-concessional loans from such lenders as the World Bank.

Instead, the country borrowed heavily from the domestic market at relatively high interest rates and shorter repayment periods as it sought to finance its expansive budget. This has seen the country's debt stock rise to a record high of Sh3.2 trillion.