Quick facts

Economy

Kenya's economy is market-based with a few state-owned infrastructure enterprises and maintains a liberalised external trade system. The country is generally perceived as Eastern and central Africa's hub for Financial, Communication and Transportation services. Major industries include: agriculture, forestry and fishing, mining and minerals, industrial manufacturing, energy, tourism and financial services. As of 2015 estimates, Kenya had a GDP of $69.977 making it the 72nd largest economy in the world. Per capita GDP was estimated at $1,587.

The government of Kenya is generally investment friendly and has enacted several regulatory reforms to simplify both foreign and local investment, including the creation of an export processing zone. The export processing zone is expected to grow rapidly through input of foreign direct investment. An increasingly significant portion of Kenya's foreign inflows are remittances by non-resident Kenyans who work in the US, Middle East, Europe and Asia. Compared to its neighbours, Kenya has well-developed social and physical infrastructure.

As of March 2014, economic prospects were positive with above 5% GDP growth expected, largely because of expansions in 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.

I.       Industry

        i.           Agriculture

The agricultural sector continues to dominate Kenya's economy, although only 15 percent of Kenya's total land area has sufficient fertility and rainfall to be farmed, and only 7 or 8 percent can be classified as first-class land. In 2006 almost 75 percent of working Kenyans made their living on the land, compared with 80 percent in 1980. About one-half of total agricultural output is non-marketed subsistence production. Agriculture is the second largest contributor to Kenya's gross domestic product (GDP), after the service sector. In 2005 agriculture, including forestry and fishing, accounted for about 24 percent of GDP, as well as for 18 percent of wage employment and 50 percent of revenue from exports. The principal cash crops are tea, horticultural produce, and coffee; horticultural produce and tea are the main growth sectors and the two most valuable of all of Kenya's exports. In 2005 horticulture accounted for 23 percent and tea for 22 percent of total export earnings. Coffee has declined in importance with depressed world prices, accounting for just 5 percent of export receipts in 2005. The production of major food staples such as corn is subject to sharp weather-related fluctuations. Production the downturns periodically necessitate food aid—for example, in 2004 aid for 1.8 million people⎯ because of one of Kenya's intermittent droughts. However, the expansion of credit to the agricultural sector has enabled farmers to better deal with the large risk of agriculture based on rainfall and the dramatic fluctuations of the prices of agricultural products.

Tea, coffee, sisal, pyrethrum, corn, and wheat are grown in the fertile highlands, one of the most successful agricultural production regions in Africa. Livestock predominates in the semi-arid savanna to the north and east. Coconuts, pineapples, cashew nuts, cotton, sugarcane, sisal, and corn are grown in the lower-lying areas.

      ii.           Industry and manufacturing

Although Kenya is the most industrially developed country in East Africa, manufacturing still accounts for only 14 percent of gross domestic product (GDP). This level of manufacturing GDP represents only a slight increase since independence. Expansion of the sector after independence, initially rapid, has stagnated since the 1980s, hampered by shortages in hydroelectric power, high energy costs, dilapidated transport infrastructure, and the dumping of cheap imports. However, due to urbanisation, the industry and manufacturing sectors have become increasingly important to the Kenyan economy, and has been reflected by an increasing GDP per capita. Industrial activity, concentrated around the three largest urban centres, Nairobi, Mombasa, and Kisumu, is dominated by food-processing industries such as grain milling, beer production, and sugarcane crushing, and the fabrication of consumer goods, e.g., vehicles from kits. Kenya also has an oil refinery that processes imported crude petroleum into petroleum products, mainly for the domestic market. In addition, a substantial and expanding informal sector engages in small-scale manufacturing of household goods, motor-vehicle parts, and farm implements. About half of the investment in the industrial sector is foreign, with the United Kingdom providing half. The United States is the second largest investor.

Kenya's inclusion among the beneficiaries of the US Government's African Growth and Opportunity Act (AGOA) has given a boost to manufacturing in recent years. Since AGOA took effect in 2000, Kenya's clothing sales to the United States increased from US$44 million to US$270 million (2006). Other initiatives to strengthen manufacturing have been the new government's favourable tax measures, including the removal of duty on capital equipment and other raw materials.

    iii.           Financial services

Kenya is East and Central Africa's hub for financial services. The Nairobi Stock Exchange (NSE) is ranked 4th in Africa in terms of market capitalisation.

The Kenya banking system is supervised by the Central Bank of Kenya (CBK). As of late July 2004, the system consisted of 43 commercial banks (down from 48 in 2001), several non-bank financial institutions, including mortgage companies, four savings and loan associations, and several score foreign-exchange bureaus. Two of the four largest banks, the Kenya Commercial Bank (KCB) and the National Bank of Kenya (NBK), are partially government-owned, and the other two are majority foreign-owned (Barclays Bank and Standard Chartered). Most of the many smaller banks are family-owned and -operated.

II.     Foreign economic relations

Since independence, Kenya, a nonaligned country, has seen both substantial foreign investment and significant amounts of development aid (total aid was $943 million in 2006, which was 4% of GNI), some from Russia, some from China and others from the high developed countries. Between 60 and 70 percent of industry is still owned from abroad.

Kenya's development assistance has come from increasingly diverse sources in recent years with China taking an increasingly higher prominent role than the west. The share of funding provided by the United Kingdom has fallen significantly, while that of multilateral agencies, particularly the World Bank and the European Development Fund, has increased. The most active investors currently are the Chinese.

Kenya is active within regional trade blocs such as the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC), a partnership of Kenya, Uganda, and Tanzania. The aim of the EAC is to create a common market of the three states modelled on the European Union. Among the early steps toward integration is the customs union which has eliminated duties on goods and non-tariff trade barriers among the members.

Kenyan policies on foreign investment generally have been favourable since independence, with occasional tightening of restrictions to promote the Africanization of enterprises. Foreign investors have been guaranteed ownership and the right to remit dividends, royalties, and capital. In the 1970s, the government disallowed foreign investment unless there was also some government participation in the ownership of an enterprise.

Notwithstanding some restrictions, between 60 and 70 percent of industry is still owned from abroad, a significant portion of which can be traced to fraudulent asset transfers by the colonial Britain during transition to independence. This denied Kenyans the opportunity to progress economically – relegating most of them to poverty and creating conditions that would lead to dependency on foreign aid. However, Kenyan has had more economic success and more success raising its own quality of life than some of its neighbours in Sub-Saharan Africa.

Politics

Kenya is a presidential representative democratic republic. The President is both the head of state and head of government, and of a multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly and the Senate. The Judiciary is independent of the executive and the legislature. There was growing concern especially during former president Daniel arap Moi's tenure that the executive was increasingly meddling with the affairs of the judiciary.

Kenya ranks low on Transparency International's Corruption Perception Index (CPI), a metric which attempts to gauge the prevalence of public sector corruption in various countries. In 2012, the nation placed 139th out of 176 total countries in the CPI, with a score of 27/100. However, there are several rather significant developments with regards to curbing corruption from the Kenyan government, for instance, the establishment of a new and independent Ethics and Anti-Corruption Commission (EACC).

Following general elections held in 1997, the Constitution of Kenya Review Act designed to pave the way for more comprehensive amendments to the Kenyan constitution was passed by the national parliament.

In December 2002, Kenyans held democratic and open elections, most of which were judged free and fair by international observers. The 2002 elections marked an important turning point in Kenya's democratic evolution in that power was transferred peacefully from the Kenya African National Union (KANU), which had ruled the country since independence to the National Rainbow Coalition (NARC), a coalition of political parties.

Under the presidency of Mwai Kibaki, the new ruling coalition promised to focus its efforts on generating economic growth, combating corruption, improving education, and rewriting its constitution. A few of these promises have been met. There is free primary education. In 2007, the government issued a statement declaring that from 2008, secondary education would be heavily subsidised, with the government footing all tuition fees.

Society

Kenya has a diverse population that includes most major ethnoracial and linguistic groups found in Africa. There are an estimated 47 different communities, with Bantus (67%) and Nilotes (30%) constituting the majority of local residents. Cushitic groups also form a small ethnic minority, as do Arabs, Indians and Europeans.

According to the CIA World Fact Book, ethnic groups in the nation are represented as follows: Kikuyu 22%, Luhya 14%, Luo 13%, Kalenjin 12%, Kamba 11%, Kisii 6%, Meru 6%, other African 15%, non-African (Asian, European, and Arab) 1%.

The country has a young population, with 73% of residents aged below 30 years because of rapid population growth; from 2.9 million to 40 million inhabitants over the last century.

Kenya's various ethnic groups typically speak their mother tongues within their own communities. The two official languages, English and Swahili, are used in varying degrees of fluency for communication with other populations. English is widely spoken in commerce, schooling and government. Peri-urban and rural dwellers are less multilingual, with many in rural areas speaking only their native languages. British English is primarily used in the country. Additionally, a distinct local dialect, Kenyan English, is used by some communities and individuals in the country, and contains features unique to it that were derived from local Bantu languages, such as Swahili and Kikuyu. It has been developing since colonisation and also contains certain elements of American English. Sheng is a Swahili-based cant spoken in some urban areas. Primarily consisting of a mixture of Swahili and English, it is an example of linguistic code-switching.

According to Ethnologue, there are a total of 69 languages spoken in Kenya. Most belong to two broad language families: Niger-Congo (Bantu branch) and Nilo-Saharan (Nilotic branch), spoken by the country's Bantu and Nilotic populations, respectively. The Cushitic and Arab ethnic minorities speak languages belonging to the separate Afroasiatic family, with the Indian and European residents speaking languages from the Indo-European family.

In addition, Kenya's capital, Nairobi, is home to Kibera, one of the world's largest slums. The shanty town is believed to house between 170,000 and 1 million locals. The UNHCR base in Dadaab in the north also currently houses around 500,000 people.

I.       Health

Nurses treat 80% of the population who visit dispensaries, health centres and private clinics in rural and under-served urban areas. Complicated cases are referred to clinical officers, medical officers and medical practitioners. According to the Kenya National Bureau of Statistics, in 2011 there were 65,000 qualified nurses registered in the country; 8,600 clinical officers and 7,000 doctors for the population of 43 million people (These figures from official registers include those who have died or left the profession hence the actual number of these workers may be lower).

Despite major achievements in the health sector, Kenya still faces many challenges. The life expectancy estimate has dropped to approximately 55 years in 2009—five years below 1990 levels. The infant mortality rate is high at approximately 44 deaths per 1,000 children in 2012. The WHO estimated in 2011 that only 42% of births were attended by a skilled health professional.

Diseases of poverty directly correlate with a country's economic performance and wealth distribution: Half of Kenyans live below the poverty level. Preventable diseases like malaria, HIV/AIDS, pneumonia, diarrhoea and malnutrition are the biggest burden, major child-killers, and responsible for much morbidity; weak policies, corruption, inadequate health workers, weak management and poor leadership in the public health sector are largely to blame. According to 2009 estimates, HIV prevalence is about 6.3% of the adult population. However, the 2011 UNAIDS Report suggests that the HIV epidemic may be improving in Kenya, as HIV prevalence is declining among young people (ages 15–24) and pregnant women. Kenya had an estimated 15 million cases of malaria in 2006.

The total fertility rate in Kenya is estimated to be 4.49 children per woman in 2012. According to a 2008–09 survey by the Kenyan government, the total fertility rate was 4.6% and the contraception usage rate among married women was 46%. Maternal mortality is high, partly because of female genital mutilation, with about 27% of women having undergone it. This practice is however on the decline as the country becomes more modernised and the practice was also banned in the country in