Economy of Kenya

Kenya's economy is market-based, with a few state-owned infrastructure

enterprises, and maintains a liberalised externalTRADE SYSTEM . The
country is generally perceived as Eastern and central Africa's hub for
Financial, Communication and Transportation services. As of March 2014,
economic prospects are positive with above 5% GDP growth expected,
[7]
largely because of expansions in tourism, telecommunications, transport,
construction and a recovery in agriculture. These improvements are
supported by a large pool of English-speaking professional workers. There
is a high level of computer literacy, especially among the youth.
The government, generally perceived as investment friendly, has enacted
several regulatory reforms to simplify both foreign and local investment,
with the most important of these being the creation of an export processing
zone. According to Healy Consultants, the export processing zone is
expected to grow rapidly through input of foreign direct investment over the
next decade. An increasingly significant portion of Kenya's foreign inflows is
from remittances by non-resident Kenyans who work in the US, Middle
East, Europe and Asia.[8] Compared to its neighbours, Kenya has a welldeveloped social and physical infrastructure. It is considered the main
alternative location to South Africa for major corporations seeking entry into
the African continent.
Economy of Kenya

Nairobi is a major financial centre of Sub-Sahara Africa.

Currency

Kenyan shilling (KES)

Trade organizations

CEN-SAD, COMESA, EAC,WTO and others

Statistics

GDP

PPP: $145.650 billion[1]

Nominal: $69.977 billion (2015 est.)[1]

GDP rank

72nd (nominal)
74th (PPP)

GDP per capita

PPP: $3,304[1] (2015 est.)

Nominal: $1,587 (2015 est.)[1]

GDP by sector

agriculture (24.2%), industry (14.8%), services (61.0%) (2012 est.)

Inflation (CPI)

10.1% (2012 est.)

Population
belowpoverty line

45% (2012 est.)[citation needed]

Gini coefficient

42.5% (2008 est.)

Labour force

78.89 million (2012 est.)

Labour force by
occupation

agriculture 75%, industry andservices 25% (2007 est.)

Unemployment

40% (2008 est.)

Main industries

small-scale consumer goods (plastic, furniture, batteries, textiles,

clothing, soap, cigarettes, flour), agricultural products, horticulture, oil
refining; aluminium, steel, lead; cement, commercial ship repair, tourism

Ease-of-doingbusiness rank

129th [2]
External

Exports
Export goods

$5.942 billion (2012 est.)

tea, horticultural products, coffee, petroleum products, fish, cement

Main export partners

Imports
Import goods
Main import partners

Uganda 10.5%
Tanzania 10.2%
Netherlands 7.1%
United Kingdom 6.7%
United States 5.8%
Egypt 5.2%
DR Congo 4.5% (2012 est.)[3]
$14.39 billion (2012 est.)
machinery and transportation equipment, petroleum products, motor
vehicles, iron and steel, resins and plastics
India 20.7%
China 15.3%
United Arab Emirates 9.5%
Saudi Arabia 6.7% (2012 est.)[4]
Public finances

Public debt

$11,960,000,000 (31 December 2013 est.).

Budget deficit

-4.6% of GDP (2012 est.)

Revenues

$7.375 billion (2012 est.)

Expenses

$9.3 billion (2012 est.)

Credit rating

Standard & Poor's:[5]

B+ (Domestic)
B+ (Foreign)
BB- (T&C Assessment)
Outlook: Stable[6]
Fitch:[6]
B+
Outlook: Stable
reserves = 5,541,000,000 (Dec 2013)

After its independence, Kenya promoted rapid economic growth through

public investment, encouragement of smallholder agricultural production,
and incentives for private often foreign industrial investment. Gross
domestic product (GDP) grew at an annual average of 6.6% from 1963 to
1973. Agricultural production grew by 4.7% annually during the same
period, stimulated by redistributing estates, diffusing new crop strains, and
opening new areas to cultivation. Between 1974 and 1990, however,
Kenya's economic performance declined. Kenya's inward-looking policy of
import substitution and risingOIL PRICES made Kenya's manufacturing
sector uncompetitive. The government began a massive intrusion in the
private sector. Lack of export incentives, tight import controls, and foreign
exchange controls made the domestic environment for investment even
less attractive.
From 1991 to 1993, Kenya had its worst economic performance since
independence. Growth in GDP stagnated, and agricultural production
shrank at an annual rate of 3.9%. Inflation reached a record 100% in
August 1993, and the government's budget deficit was over 10% of GDP.

[9]

As a result of these combined problems, bilateral and multilateral donors

suspended program aid to Kenya in 1991.
Throughout these first three decades of independence,
Kenya's parastatals, partly from a lack of expertise and endemic corruption,
largely inhibited economic development. In 1979, a presidential
commission went as far as saying that they constituted "a serious threat to
the economy"; a decade later, they had still not furthered industrialisation or
fostered the development of a Black-Kenyan business class. [citation needed]The
backbone of the country's private-sector success was provided by Asian
Kenyans; during the colonial period, it was they who had created their
country's internal market, and then dominated internal trade. British
colonizers instituted segregation based on skin colour: Whites were firstclass citizens, Indians (who came to Kenya to work on the East African
Railway as labourers, were second-class citizens, and native Kenyans
were third-class citizens.[citation needed] As a result, various laws were set in
place to limit African Kenyans in their own land, for example, they had to
walk around with 'Passes' at all times, and free movement, schooling and
entrepreneurial endeavours for Africans in Kenya was strictly enforced by
colonial police between the late 1800s and Kenya's Independence in 1963.
Post-independence, and particularly after being pushed out of its retail
stronghold after its "Africanisation", those who stayed in Kenya transferred
their dominance to the more advanced sectors of its commerce and
industry, easily out-competing Western multinationals in notable instances.
Prominent Asian-Kenyan businesspeople include Manu
Chandaria and Madatally Manji.[10]
In 1993, the Government of Kenya began a major program of economic
reform and liberalisation. A new minister of finance and a new governor of
the central bank undertook a series of economic measures with the
assistance of the World Bank and theInternational Monetary Fund (IMF). As
part of this program, the government eliminated price controls and import
licensing, removedforeign exchange controls, privatised a range of publicly
owned companies, reduced the number of civil servants, and introduced
conservative fiscal and monetary policies. From 1994 to 1996, Kenya's real
GDP growth rate averaged just over 4% a year.[11]
In 1997, however, the economy entered a period of slowing or stagnant
growth, due in part to adverse weather conditions and reduced economic

activity prior to general elections in December 1997. In July 1997, the

Government of Kenya refused to meet commitments made earlier to the
IMF ongovernance reforms.[citation needed]As a result, the IMF suspended
lending for three years, and the World Bank also put a $90 million structural
adjustment credit on hold.
The Government of Kenya took positive steps on reform, including the
1997 establishment of the Kenya Anti-Corruption Authority, and measures
to improve the transparency of government procurements and reduce the
government payroll. In July 2000, the IMF signed a $150 million Poverty
Reduction and Growth Facility, and the World Bank followed suit shortly
after with a $157 million Economic and Public Sector Reform credit.
This is a chart of trend of gross domestic product of Kenya at market
prices estimated by the International Monetary Fund with figures in millions
of Kenyan Shillings.
Gross domestic product
n 2006 Kenya's gross domestic product (GDP) was about US$17.39 billion.
Per capita GDP averages somewhat more than US$450 annually. Adjusted
in purchasing power parity (PPP) terms, per capita GDP in 2006 was about
US$1,200. The country's real GDP growth picked up to 2.3 percent in early
2004 and to nearly 6 percent in 2005 and 2006, compared with a sluggish
1.4 percent in 2003 and throughout President Daniel arap Moi's last term
(19972002). Real GDP is expected to continue to improve, largely
because of expansions in tourism, telecommunications, transport, and
construction and a recovery in agriculture. The Kenya Central Bank
forecast for 2007 is between 5 and 6 percent GDP growth. GDP
composition by sector, according to 2004 estimates, was as follows:
agriculture, 25.7 percent; manufacturing, 14.0 percent; trade, restaurants,
and hotels, 13.8 percent; transport and communications, 6.9 percent;
government services, 15.6 percent; and other, 24.0 percent
KENYA
GENERAL INFORMATION:
Member Trade bloc: I.O.RIM

Location: Eastern Africa, bordering the Indian Ocean, between

Somalia and Tanzania Capital: Nairobi
Surface area: 580 thousand sq km Official language: Swahili
Population: 36.91 million (July 2007 est.)-- Protestant 45%,
Roman Catholic 33%, indigenous beliefs 10%, Muslim 10%, other
2%
KEY ECONOMIC INDICATORS 2001 2002 2003 2004 2005
2006 2007
GDP (US$ bn): 13.1 13.2 15.0 16.1 19.2 21.3 29.5
GDP per capita (Us$) 423 419 467 490 574 625 851
Real GDP growth (% change YOY) 4.7 0.3 2.8 4.3 4.7 3.3 6.4
Goods and Service exports (%GDP) 22.2 24.3 24.6 28.0 n.a. n.a.
27.8
Inflation(% change YOY) 5.8 2.0 9.8 11.6 10.3 11.5 6.9
Unemployment rate (%) 40 - - - - - 40
Total Exports (US$ bn) 1.944 2.116 2.411 2.684 3.225 3.450 4.140
Total Imports (US$ bn) 3.192 3.245 3.725 4.553 6.149 7.320
9.210
GDP COMPOSITION: Agriculture: 23.8%, Industry: 16.7%,
Services: 59.5% (2007 est.)
MAJOR INDUSTRIES Small-scale consumer goods (plastic,
furniture, batteries, textiles, soap, cigarettes, flour), agricultural
products; oil
refining, aluminum, steel, lead, cement; commercial ship repair,
tourism
MAJOR TRADING PARTNERS OF KENYA
Kenyas principal export destinations 2007: Kenyas
principal import sources 2007:
1- Uganda 15.9% 1- United Arab Emirates 11.8%
2- United Kingdom 10.3% 2- India 8.8%
3- US 8.2% 3- China 8.3%
4- Netherland 7.9% 4- Saudi Arabia 8.3%
Pakistan 4.4% Pakistan 1.27%
KENYAS MAIN ITEMS OF EXPORTS: tea, horticultural products,
coffee, petroleum products, fish, cement
KENYAS MAIN ITEMS OF IMPORTS: machinery and
transportation equipment, petroleum products, motor vehicles,
iron and steel, resins
and plastics

TRADE BETWEEN PAKISTAN & KENYA

(Million US$)
YEAR
EXPORT
IMPORT
Balance of
Trade
TOTAL EXPORT
OF PAKISTAN
% SHARE IN
TOTAL EXP.
TOTAL IMPORTS
OF PAKISTAN
% SHARE IN
TOTAL IMPORTS
2001-02 51.663 130.405 (78.74) 9202.218 0.56 10,342.865 1.26
2002-03 112.221 135.169 (22.948) 11160.246 1.00 12220.253
1.10
2003-04 59.918 142.722 (82.804) 12313.000 0.48 15592.000
0.91
2004-05 64.475 170.108 (105.633) 14,391.081 0.45 20,598.114
0.83
2005-06 65.387 168.074 (102.687) 16,452.398 0.4 28,586.007
0.6
2006-07 93.026 152.683 (59.657) 16,976.243 0.54 30,539.709
0.49
2007-08 101.78 141.52 (39.74) 19,222.86 0.52 39,968.50 0.35
Share of Pakistan Exports in Kenyas Imports (2007) =1.27%
Share of Pakistan Imports in Kenyas Exports (2007) =4.4 %
Major items of export from Pakistan to Kenya Major Items
of Import from Kenya to Pakistan
(US$ Million) (US$ Million)
Commodity Description 03-04 04-05 05-06 06-07 07-08
Commodity Description 03-04 04-05 05-06 06-07 07-08
Rice 28.533 29.223 34.497 49.07 54.23 Coffee, tea & spices etc.
131.575 157.455 152.162 138.22 129.63
Cotton yarn & woven
fabrics 11.464 15.778 11.53 16.36 21.36 Raw hides, skin &
leather 4.278 5.66 6.302 5.72 3.56

Made up textile article,

rags etc. 7.122 6.443 8.103 11.52 15.62 Iron, steel & its products
0.659 2.54 1.638 1.48 0.89
Man made filament &
yarns 3.579 4.218 1.04 1.47 2.36
Inorg.chem., org./inorg.
Compounds of precious
metals
2.008 2.533 4.422 4.01 1.56
Article of apparel/cloth
access 0.231 3.211 0.643 0.914 1.56 Boiler machinery & mech.
Appl. --- 0.522 0.0154 0.0139 0.23
Source: WTO Trade data base, World Development Indicators,
Federal Bureau of Statistics
Kenya Trade, Exports and Imports
Kenya is largely a trade deficit country. The negative balance of trade
occurs because the country's exports are vulnerable to both international
prices and the weather conditions. Since independence, Kenya has
enjoyed close international relations, particularly with the western countries.
It is also a member of several regional trade blocs, such as the COMESA
(Common Market for Eastern and Southern Africa) and the EAC (East
African Community). These blocs are a key components of Kenyas
trade volumes.
Kenya Trade: Exports
Agricultural productivity is central to Kenya's export industry. More than
75% of the population is engaged in agriculture and allied activities, which
contribute almost 25% to the national production. Horticultural produce and
tea are the major items of export for Kenya. In 2006, the combined share of
these two products was 10 times higher than the share of the other export
items. The country has subsistence petroleum production, which is
consumed internally and exported to neighboring countries. Kenya has

signed an MoU (Memorandum of Understanding) with China regarding oil

exploration in the country. Till January 2010, no oil was found.

Apart from horticulture and tea, other major items of export are coffee, fish
and cement. In 2009, Kenyas exports grossed over US$4.9 billion. The UK
is the largest export partner of Kenya, accounting for more than 10% of the
total export volumes. It is followed by the Netherlands, Uganda, Tanzania,
the US and Pakistan.
Kenya Imports 1998-2015 | Data | Chart | Calendar | Forecast | News
Imports in Kenya increased to 129842 Million KES in April of 2015 from
114862 Million KES in March of 2015. Imports in Kenya averaged 59798.58
Million KES from 1998 until 2015, reaching an all time high of 159936
Million KES in September of 2014 and a record low of 13453 Million KES in
January of 1999. Imports in Kenya is reported by the Central Bank of
Kenya. Kenya imports mostly machinery and transportation
equipment, petroleum products, motor vehicles, iron and steel, resins
and plastics. Kenya main import partners are India, China, UAE, South
Africa, Saudi Arabia, United States and Japan. This page provides the
latest reported value for - Kenya Imports - plus previous releases,
historical high and low, short-term forecast and long-term prediction,
economic calendar, survey consensus and news. Content for - Kenya
Imports - was last refreshed on Saturday, July 11, 2015.

Kenya Exports 1998-2015 | Data | Chart | Calendar | Forecast | News

Exports in Kenya decreased to 39881 Million KES in April of 2015 from

47707 Million KES in March of 2015. Exports in Kenya averaged 25488.15
Million KES from 1998 until 2015, reaching an all time high of 48995 Million
KES in April of 2014 and a record low of 9007 Million KES in January of
1999. Exports in Kenya is reported by the Central Bank of Kenya.
Agricultural products are central to Kenya's export industry with
horticultural and tea being the most important. Other export items
include textiles, coffee, tobacco, iron and steel products, petroleum
products, cement. Kenya main exports partners are UK, Netherlands,
Uganda, Tanzania, United States and Pakistan. This page provides the
latest reported value for - Kenya Exports - plus previous releases,
historical high and low, short-term forecast and long-term prediction,
economic calendar, survey consensus and news. Content for - Kenya
Exports - was last refreshed on Saturday, July 11, 2015.

Major Imports and Exports

According to the International Trade Centre, the top five export categories
for Kenya in 2008, along with percentage of total exports, were:
1.
2.
3.
4.
5.

Coffee, tea, mate, and spices (19.1%)

Live trees, plants, bulbs, roots, cut flowers, etc. (10.2%)
Printed books, newspapers, pictures, etc. (7.8%)
Edible vegetables, certain roots, and tubers (4.8%)
Inorganic chemicals,PRECIOUS METAL compound, and
isotopes (3.8%)

According to the International Trade Centre, the top five import categories
for Kenya in 2008, along with percentage of total imports, were:
1. Mineral fuels, oils, distillation products, etc. (24.1%)
2. Printed books, newspapers, pictures, etc. (12.1%)
3. Boilers, machinery, nuclear reactors, etc. (8.7%)

4. Electrical and electronic equipment (7.4%)

5. Vehicles other than railway (7%)