Kenya Economic Outlook

Kenya's Economic Milestones

Kenya has fully liberalized its economy by abolishing exchange controls, removing price controls, and import licensing regimes. The government has also freed the Kenya shilling exchange rate to be market-driven with no restrictions on remittances as well as the repatriation of profits and dividends. The country’s Capital Markets is also open to foreign participation.

Kenya is one the most developed countries in East Africa. Agriculture, Forestry and Fishing (including coffee and tea cultivation) is the largest sector of the economy and accounts for about 22 percent. Manufacturing is the second largest sector and represents around 11 percent of the GDP. Other major sectors include: Real Estate (about 8 percent of total GDP), Wholesales and Retail Trade (around 7 percent), Transport and Storage (around 7 percent) , Education (about 7 percent), Financial and Insurance Activity (around 6 percent) and Construction (around 5 percent). In the last decade, Kenya has made significant political, structural, and economic reforms that have largely driven sustained economic growth, social development, and political gains.

The promulgation of the 2010 Constitution ushered in devolution, a new political and economic governance system that has seen Kenya rise to be one of the fastest-growing economies in Sub-Saharan Africa with the real Gross Domestic Product (GDP) estimated to have  rose by 4.8% in 2022, following an upwardly revised 7.6% expansion in the previous year.

source: Kenya National Bureau of Statistics

The Government’s Big 4 Agenda and commitment to entrenching investor-friendly reforms have seen the rapid transformation of the country’s investment landscape. Since 2014, Kenya has jumped 80 places to be ranked at position 56 out of 190 Countries in the 2019 World Bank Group’s Doing Business Report cementing the country’s position as East Africa’s largest economy with a simplified and predictable business environment.

Kenya operates a liberal economy that promotes trade and investment with guarantees on capital repatriation as well as remittance of dividends and interest to foreign investors. Agriculture and manufacturing are the key drivers of the economy which largely contribute to the national gross domestic product growth (GDP).

Looking ahead, Kenya is on course to deliver on her development blueprint Vision 2030 with a GDP expected to rise to 10% in medium-term underpinned by private consumption, a pick-up in industrial activity and still strong performance in the services sector.