ECONOMICS

 

Main Crops: coffee, tea, corn, wheat, sugarcane, fruit, vegetables; dairy products, beef, pork, poultry, eggs

Natural Resources: Gold, limestone, soda ash, salt barites, rubies, fluorspar, garnets, wildlife .

Major Industries: small-scale consumer goods (plastic, furniture, batteries, textiles, soap, cigarettes, flour), agricultural products processing; oil refining, cement; tourism

Kenya is the economic, financial, and transport hub of East Africa. Kenya’s real GDP growth has averaged over 5% for the last decade. Since 2014, Kenya has been ranked as a lower middle income country because its per capita GDP crossed a World Bank threshold. While Kenya has a growing entrepreneurial middle class and steady growth, its economic development has been impaired by weak governance and corruption. Although reliable numbers are hard to find, unemployment and under-employment are extremely high, and could be near 40% of the population. In 2013, the country adopted a devolved system of government with the creation of 47 counties, and is in the process of devolving state revenues and responsibilities to the counties.

Agriculture remains the backbone of the Kenyan economy, contributing one-third of GDP. About 75% of Kenya’s population of roughly 48.5 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production. Tourism also holds a significant place in Kenya’s economy. In spite of political turmoil throughout the second half of 2017, tourism was up 20%, showcasing the strength of this sector. Kenya has long been a target of terrorist activity and has struggled with instability along its northeastern borders. Some high visibility terrorist attacks during 2013-2015 (e.g., at Nairobi’s Westgate Mall and Garissa University) affected the tourism industry severely, but the sector rebounded strongly in 2016-2017 and appears poised to continue growing.

Inadequate infrastructure continues to hamper Kenya’s efforts to improve its annual growth so that it can meaningfully address poverty and unemployment. The KENYATTA administration has been successful in courting external investment for infrastructure development. International financial institutions and donors remain important to Kenya's growth and development, but Kenya has also successfully raised capital in the global bond market issuing its first sovereign bond offering in mid-2014, with a second occurring in February 2018. The first phase of a Chinese-financed and constructed standard gauge railway connecting Mombasa and Nairobi opened in May 2017.

In 2016 the government was forced to take over three small and undercapitalized banks when underlying weaknesses were exposed. The government also enacted legislation that limits interest rates banks can charge on loans and set a rate that banks must pay their depositors. This measure led to a sharp shrinkage of credit in the economy. A prolonged election cycle in 2017 hurt the economy, drained government resources, and slowed GDP growth. Drought-like conditions in parts of the country pushed 2017 inflation above 8%, but the rate had fallen to 4.5% in February 2018.

The economy, however, is well placed to resume its decade-long 5%-6% growth rate. While fiscal deficits continue to pose risks in the medium term, other economic indicators, including foreign exchange reserves, interest rates, current account deficits, remittances and FDI are positive. The credit and drought-related impediments were temporary. Now In his second term, President KENYATTA has pledged to make economic growth and development a centerpiece of his second administration, focusing on his "Big Four" initiatives of universal healthcare, food security, affordable housing, and expansion of manufacturing.

 

 

	1990	2000	2010	2020
GNI, Atlas method (current US$) (billions)	8.85	13.17	38.75	98.67
GNI per capita, Atlas method (current US$)	370	410	920	1,840
GNI, PPP (current international $) (billions)	38.59	57.97	96.19	242.41
GNI per capita, PPP (current international $)	1,630	1,810	2,290	4,510
GDP (current US$) (billions)	8.57	12.71	45.41	100.67
GDP growth (annual %)	4.2	0.6	8.1	-0.3
Inflation, GDP deflator (annual %)	10.6	6.1	1.6	4.9
Agriculture, forestry, and fishing, value added (% of GDP)	25	29	18	23
Industry (including construction), value added (% of GDP)	16	15	19	17
Exports of goods and services (% of GDP)	26	22	20	10
Imports of goods and services (% of GDP)	31	32	30	18
Gross capital formation (% of GDP)	24	17	21	20
Revenue, excluding grants (% of GDP)	..	..	..	16.8
Net lending (+) / net borrowing (-) (% of GDP)	..	..	..	-0.1
States and markets
Time required to start a business (days)	..	60	33	23
Domestic credit provided by financial sector (% of GDP)	..	..	..	..
Tax revenue (% of GDP)	..	..	..	14.3
Military expenditure (% of GDP)	2.9	1.3	1.6	1.1
Mobile cellular subscriptions (per 100 people)	0	0.4	59.4	114.2
Individuals using the Internet (% of population)	0	0.3	7.2	29.5
High-technology exports (% of manufactured exports)	..	..	7	5
Statistical Capacity Score (Overall Average) (scale 0 - 100)	..	..	62	58
Global links
Merchandise trade (% of GDP)	38	38	38	21
Net barter terms of trade index (2000 = 100)	70	100	105	106
External debt stocks, total (DOD, current US$) (millions)	7,055	6,147	8,862	38,194
Total debt service (% of exports of goods, services and primary income)	35.4	21	4.4	27.8
Net migration (thousands)	222	25	-50	-50
Personal remittances, received (current US$) (millions)	139	538	686	3,108
Foreign direct investment, net inflows (BoP, current US$) (millions)	57	111	178	426
Net official development assistance received (current US$) (millions)	1,181.30	513.9	1,631.30	3,987.90