Kenya


 

Geography and Population

Kenya straddles the Equator. It is located on the eastern coast of Africa. It is bordered by Somalia to the east, Ethiopia and South Sudan to the north, Uganda to the west and Tanzania to the south. Kenya’s total land area is approximately 586,600 km2.

Kenya gained its freedom in December 1963. The following year, it was renamed the Republic of Kenya.

Kenya has an estimated population of approximately 50 million people, comprising three primary ethnic groups: the Bantu, Nilotic and Cushitic. These indigenous groups constitute 99 percent of the population. The remaining 1 percent consists of non-African groups (Arab, European and Asian). The Kikuyu are the largest ethnic group. They are prolific farmers and inhabit the central highlands. Kenya is a multilingual country, but Swahili and English are widely spoken and are the official languages.

Kenya has a unitary system of governance at two levels, national and county. The 47 counties are headed by governors elected for a five-year term.

The national assembly of Kenya is unicameral and consists of 224 members. Of the 224 members, 210 members are elected by popular vote for a five-year term. The remaining 12 nominated members are appointed by the president but selected by political parties based on proportional representation and by two ex-officio members.

The executive power in the political system is vested in the president, who is both the Chief of State and head of the government. The President of Kenya is elected for a five-year term by popular vote and is eligible for re-election for a second term. The president performs executive functions with the assistance of a vice president and cabinet ministers.

Economic Overview

Kenya is the economic, financial, and transport hub of East Africa. It has a Gross Domestic Product (GDP) worth 74.7 billion dollars. The growth of Kenya’s GDP will remain robust until 2021, averaging 5.8% because of sustained expansion in consumer services, urbanization, East African Integration (EAC), structural reforms and investment in infrastructure.

Private consumption will account for an estimated 81.4% of GDP over the coming decade. The major sources of Gross Domestic Product (GDP) growth in 2016 were agriculture, forestry, fishing, manufacturing, transport, communication, real state, and financial services.

Main Employment Sectors

Agriculture: The agriculture sector dominates the Kenyan economy, accounting for 70 percent of the workforce and approximately 35 percent of annual GDP.  The country’s major agricultural exports are tea, coffee, cut flowers, and vegetables. Kenya is the world’s leading exporter of black tea and cut flowers.

Service: The service sector represents nearly half of Kenya’s GDP. It is dynamic and expected to grow rapidly in the coming years.

Home to a great wildlife sanctuary and the world’s most famous safari destination. Kenya is an attractive country for tourism, which earned 1.2 billion dollars in 2017, representing a growth of 20% from the previous year. The sector provides 9.2% of the country’s total employment, but the country’s full potential has not been realised.

Transport and communications represent approximately 11 percent of the country’s GDP. Kenya envisages a massive upgrade and extension of its infrastructure. In this regard, the country has identified several infrastructure projects that present significant opportunities for investors in the coming years.

Kenya’s Standard Gauge Railway “SGR” connects the port of Mombasa to Nairobi and was completed in 2017. The railway is the country’s largest undertaking since independence. The second phase of the project will extend the railway up to the Uganda border.

The 609 km railway will decrease Kenyans’ journey between Nairobi and Mombasa from ten to merely four hours. By contrast, freight trains will take eight hours.

With the boom in mobile telecommunications, even among the poorest, Kenya is pioneering innovative mobile services, such as phone banking, which is used by more than 13 million Kenyans.

The communications sector is a rapidly growing sector in Kenya’s economy. Since 2013, the number of subscribers has continuously risen, with mobile penetration, internet penetration, and broadband penetration reaching 89.2%, 87.2%, and 18.6%, respectively, in the first quarter of 2016.

The Port of Mombasa plays a significant role in the transport network of East Africa, as it serves nearly 300 million people and handles traffic to Kenya, South Sudan, Uganda, Rwanda, Burundi, Democratic Republic of Congo (DRC) and Tanzania. It has experienced major traffic growth, averaging 10% annually over the past ten years.

The port has 13 general cargo berths with a quay length of 2448 meters and four container berths with a quay length of approximately 840 meters.

Manufacturing is a key sector in Kenya’s economic development, contributing to the national output, exports and job creation. The government has established goals for industrial growth, including the development of special economic zones, industrial parks and niche products.

The country’s industrial hubs are located in the urban areas of Mombasa and Nairobi. Most manufacturing work involves the processing of agricultural products. Opportunities are limited in the meat processing and dairy industries and in leather, paper, textile and sugar production. Petroleum products are manufactured at government-owned refineries on the coast. Kenya has strong food and cement industries and large textile and shoe factories. It relies on imported crude for jet fuel and diesel. Imported raw materials are also used to manufacture machinery and motor vehicles.