Kenya’s Economy: Kenya is strategically located within easy reach of various markets in the region and the destination of its exports has been the European Community (EC) countries, USA and other African countries.
The Government of Kenya has been very keen to implement economic liberalization and has instituted various reforms. This has led to better economic performance and an improved environment for conducting business.
The country has in the last few decades tried to reduce dependence on the traditional agricultural export commodities such as tea and coffee and has made serious efforts to promote non-traditional exports such as horticultural crops, Manufactures, and most recently the export of services. Services such as banking, insurance and business have also grown and the country’s currency, the Kenya Shilling, remains fairly stable.
Kenya is host to numerous multi-national corporations, majority of which are from USA, United Kingdom, Germany and the Far East, and has for a long time been viewed as a gateway to the wider East African region.
The Government of Kenya is taking a variety of steps to create an enabling environment for both foreign and domestic investment. This is in line with the Government’s Economic Recovery Strategy for Wealth and Employment Creation(2003-2007), which is focused on the promises contained in the manifesto of the ruling party, the National Rainbow Coalition (NARC).
Priorities are investment in infrastructure and improving access to education and health services. Also at the top of the agenda are fighting corruption and promoting good governance. Kenya’s economy has been improving after years of poor performance, and posted real economic growth.
Agriculture remains the dominant sector, it contributed 24% to the GDP in 2003. Nevertheless, other sectors like manufacturing, tourism and business services also make significant contributions (Figure II.1). Growth in agriculture increased to1.5% in 2003, up from 0.7% in 2002, while the manufacturing sector grew by 1.4% in 2003, up from 1.2% in 2002 and 0.8% in 2001.
This modest positive growth was mainly attributable to tight fiscal and monetary policies, stable exchange rates, low demand for imports, low food prices and stable petroleum prices. Considering sub-Saharan Africa’s (excluding South Africa) GDP growth of 3.6% in 2003.Kenya’s economic performance can be said to be no more than fair.