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Business Environment in Kenya

Economic Environment in Kenya

Private sector-led economic growth has since the early 2000s, been Kenya’s Priority. The Government’s business-friendly stance has rolled over into Vision 2030, which sets development benchmarks for a number of priority sectors. This has been complemented by the integration of the EAC and the establishment in 2005 of a customs union and a common market (2010).

Kenya is a member of COMESA with 19 countries, and 14 of which are in a Free Trade Area (FTA). Three regional economic blocks i.e EAC, COMESA and SADC with a combined population of over 600 million people are currently developing a joint framework and roadmap towards a Free Trade Area by 2015.

Kenya has seen an upward trend in economic development  to a record of 5% as at December 2010 with prospects looking up due to extensive economic reforms, a new constitution, and fundamental reforms in the three arms of government( executive, legislature and the judiciary).

The main sectors contributing to  economic growth  are building and construction, infrastructure development, manufacturing, transport and services, and tourism paricularly from emerging markets; agriculture, and wholesale and retail.

Operating Risk

While the country enjoys several advantages such as its strategic location, good economic performance across all sectors a  strong demography with an emergence of a new middle class. The country faces certain challenges especially in food security due to its dependence in rain fed agriculture. There are also concerns and uncertainity over political stability and implementation of key economic reforms following the promulgation of a new constitution in 2011. Other issues revolve around governance and infrastructure. This however is mitigated by a strong political and social will to implement changes. Others particulary agriculture and food sufficiency can easily be turned into profitable opportunities for food production through irrigation.


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