Kenya’s economy remains the largest and most diversified in eastern Africa with a Kshs2.9 trillion ($34.2 billion) Gross Domestic Product (GDP). Its financial system and capital markets are not only strong, but also very vibrant.
Kenya Economy – Financial Sector
The Nairobi Securities Exchange is a vibrant bourse patronised by both local and international investors and – like Johannesburg, Lagos and Cairo securities exchanges – it is an important destination for international portfolio investors. The market capitalisation as at December 2011 stood at Kshs868 billion ($10.2 billion) from Kshs1.2 trillion ($14.2 billion) the previous year, and the NSE 20 share Index slid 27.7 per cent to 3,205 points from 4,432 points. In 2007, the index hit a peak of 6,000 points.
The bond market has become a regional case-study and a key source of funds for Government, State corporations and the private sector. The longest maturity-tenor bond now is 30 years.
Banking, insurance and forex sectors are vibrant, enjoying one of the most stable periods in history: there are 43 banks – local and international, 42 insurance companies, 2,665 insurance agents, 201 insurance brokers, 44 underwriters, two re-insurance companies and 126 forex bureaus.
And the pension sector, too, is solid and well regulated: There are 17 private scheme managers managing 1,192 schemes in 2010 and the National Social Security Fund (N SSF).
The sector, regulated by the Retirement Benefits Authority (RBA), boasts of an asset base in excess of Sh470 billion.
Kenya Economy – ICT Sectors
The mobile phone telephony sector has grown by leaps and bounds. Kenya has four mobile phone companies – Safaricom, Airtel, Telkom and Yu with about 28 million subscribers. The country was the first to commercially use mobile phone money transfer in the world, which now has nearly 16 million subscribers. Safaricom’s M-Pesa was the most widely used in 2010 with 305.7 million transactions effected, valued at Sh727.8 billion in the year.
Kenya’s economy has weathered political and economic crises since 2008 and last year recorded growth of 4.4 per cent, down from 5.6 per cent in 2009.
At US $17.39 billion, Kenya’s gross domestic product was equivalent to US $500 per head in 2006. Kenya usually spends more each year on imports than it earns from exports.
Kenya Economy – Economic Development in Kenya
Agriculture is the most important sector of the economy, accounting for 16.3 percent of GDP. It employs 75 percent of the population and accounts for around 50 percent of export earnings. Although only about 4 percent of the land is arable, Kenyan agriculture is highly diversiﬁed, producing almost every basic foodstuff. Potatoes, coffee, tea, cotton, cereal grains, beans, and tobacco are grown in the highlands, which is the prime agricultural area, while sugarcane, corn, cassava, pineapples, sisal, cotton, and cashew nuts are grown on the coast and in the lowlands. Livestock breeding and dairy farming are also important, while commercial ﬁshing mainly satisﬁes only the local market.
Kenya Economy – Manufacturing Sectors
Kenya has one of East Africa’s most diversified manufacturing sectors, including food processing, agricultural product. Small ~scale consumer goods, oil refining, aluminum, steel. Lead, and cement,plus service industries such as commercial ship repair and tourism. Tourism attracts close to one million visitors annually, and provides the greatest source of foreign exchange earnings. In response to rising demand for electricity, Kenya continues to develop its hydroelectric and geothermal projects. At present hydroelectricity supplies 55 percent of electricity, geothermal power 19 percent, and thermal power 26 percent.