Economic overview Kenya, in 36 editions.

A serious underlying economic problem is Kenya's 3.8% 3.6% annual population growth rate--one of the highest in the world. In the meantime, GDP growth in the near term has kept slightly ahead of population--annually averaging 5.2% 4.9% in the 1986-88 1986-90 period. Undependable weather conditions and a shortage of arable land hamper long-term growth in agriculture, the leading economic sector.

A serious underlying economic problem is Kenya's 3.6% annual population growth rate--one rate - one of the highest in the world. world
- presents a serious problem for the country's economy. In the meantime, GDP
growth in the near term has kept slightly ahead of population--annually population - annually
averaging 4.9% in the 1986-90 period. Undependable weather conditions and a
shortage of arable land hamper long-term growth in agriculture, the leading
economic sector. In 1991, deficient rainfall, stagnant export volume, and
sagging export prices held economic growth below the all-important
population growth figure.

Kenya's 3.6% annual population growth rate - one of the highest in the world
- presents a serious problem for the country's economy. In the meantime, GDP
growth in the near term has kept slightly ahead of population - annually
averaging 4.9% in the 1986-90 period. Undependable weather conditions and a
shortage of arable land hamper long-term growth in agriculture, the leading
economic sector. In 1991, deficient rainfall, stagnant export volume, and
sagging export prices held economic growth below the all-important
population growth figure. figure, and in 1992 output fell.

Kenya's 3.6% 3.1% annual population growth rate - one of the highest in the world
world - presents has led to a serious problem for the country's economy. In the meantime, GDP
growth decline in the near term has kept slightly ahead of population - annually
averaging 4.9% per capita output in each of the 1986-90 period. last
three years, 1991-93. Undependable weather conditions and a
shortage
of arable land hamper long-term growth in agriculture, the leading
economic sector. In 1991, deficient rainfall, stagnant export volume, industry and services, Nairobi's reluctance to
sagging export prices embrace IMF-supported reforms has held economic growth below back investment. Ethnic clashes
and continued suspension of quick disbursing aid by the all-important international
population donors kept growth figure, and at only 0.5% in 1992 output fell. 1993.

Kenya in recent years has had one of the
highest natural
rates of growth in population, but the statistics
have been
complicated by the large-scale movement of nomadic groups
and of
Somalis back and forth across the border. Population growth
has been
accompanied by deforestation, deterioration in the road
system, the
water supply, and other parts of the infrastructure. In
industry and
services, Nairobi's reluctance to embrace IMF-supported
reforms had
held back investment and growth in 1991-93. Nairobi's
push on economic
reform in 1994, however, helped support a 3.3%
increase in output. The strong economy continued into 1995 with
inflation cut sharply and GDP growth at 5%.

Since 1993, the government of Kenya has
implemented
a program of economic liberalization and reform. Steps
have included
the removal of import licensing and price controls,
removal of foreign
exchange controls, fiscal and monetary restraint,
and reduction of the
public sector through privatization of privatizing publicly
owned companies and
downsizing the civil service. With the support of
the World Bank, IMF,
and other donors, these reforms have led to a
turnaround in economic
performance following a period of negative
growth in the early 1990s.
Kenya's real GDP grew at 5% in 1995 and 4%
in 1996, and inflation
remained under control. Substantial barriers Growth slowed in 1997. Political violence
damaged the tourist industry, and the IMF allowed Kenya's Enhanced
Structural Adjustment Program to lapse due to the government's failure
growth to enact reform conditions and to adequately address public sector
corruption. Moreover, El Nino rains destroyed crops and damaged an
already crumbling infrastructure in 1997 and on into 1998. Long-term
barriers to development remain, including include electricity shortages, the
government's continued and inefficient dominance of key sectors,
endemic corruption, and the country's high population growth rate
(which has declined substantially in recent years). rate.

Since 1993, the government of Kenya has implemented
implemented a program of economic liberalization and reform. Steps
have included
the removal of import licensing and price controls,
removal of foreign
exchange controls, fiscal and monetary restraint,
and reduction of the
public sector through privatizing publicly
owned companies and
downsizing the civil service. With the support
of the World Bank, IMF,
and other donors, these reforms have led to
a turnaround in economic
performance following a period of negative
growth in the early 1990s.
Kenya's real GDP grew at 5% in 1995 and
4% in 1996, and inflation
remained under control. Growth slowed in 1997.
1997-98. Political violence
damaged the tourist industry, and the
IMF allowed Kenya's Enhanced
Structural Adjustment Program to lapse
due to the government's failure
to enact reform conditions and to
adequately address public sector
corruption. Moreover, El Nino rains
destroyed crops and damaged an
already crumbling infrastructure in
1997 and on into 1998. Long-term
barriers to development include electricity
shortages, the
government's continued and inefficient dominance of
key sectors,
endemic corruption, and the country's high population
growth rate.

Since Kenya is well placed to serve as an engine of growth in East Africa, but its economy is stagnating because of poor management and uneven commitment to reform. In 1993, the government of Kenya has
implemented a program of economic liberalization and reform. Steps
have reform that included the removal of import licensing and licensing, price controls,
removal of and foreign exchange controls, fiscal and monetary restraint,
and reduction of the public sector through privatizing publicly
owned companies and downsizing the civil service. controls. With the support
of the World Bank, IMF, and other donors, these the reforms have led to
a brief turnaround in economic performance following a period of negative
growth in the early 1990s. Kenya's real GDP grew at 5% in 1995 and
4% in 1996, and inflation remained under control. Growth slowed in
1997-98. 1997-99 however. Political violence damaged the tourist industry, and the
IMF allowed Kenya's Enhanced Structural Adjustment Program to lapse
lapsed due to the government's failure to enact maintain reform conditions and to
adequately or address public sector corruption. Moreover, El Nino rains
destroyed crops and damaged an already crumbling infrastructure A new economic team was put in
1997 place in 1999 to revitalize the reform effort, strengthen the civil service, and 1998. curb corruption, but wary donors continue to question the government's commitment to sound economic policy. Long-term barriers to development include electricity
shortages, the government's continued and inefficient dominance of
key sectors, endemic corruption, and the country's high population
growth rate.

Kenya is well placed to serve as an engine of growth in East Africa, but its economy is has been stagnating because of poor management and uneven commitment to reform. In 1993, the government of Kenya implemented a program of economic liberalization and reform that included the removal of import licensing, price controls, and foreign exchange controls. With the support of the World Bank, IMF, and other donors, the reforms led to a brief turnaround in economic performance following a period of negative growth in the early 1990s. Kenya's real GDP grew 5% in 1995 and 4% in 1996, and inflation remained under control. Growth slowed after 1997, averaging only 1.5% in 1997-99 however. Political 1997-2000. In 1997, political violence damaged the tourist industry, and Kenya's Enhanced Structural Adjustment Program lapsed due to the government's failure to maintain reform or address public sector corruption. Severe drought in 1999 and 2000 caused water and energy rationing and reduced agricultural sector productivity. A new economic team was put in place in 1999 to revitalize the reform effort, strengthen the civil service, and curb corruption, corruption. The IMF and World Bank renewed their support to Kenya in mid-2000, but wary donors continue a number of setbacks to question the economic reform program in late 2000 have renewed donor and private sector concern about the government's commitment to sound economic policy. governance. Long-term barriers to development include electricity shortages, the government's continued and inefficient government dominance of key sectors, endemic corruption, and the country's high population growth rate. growth.

Kenya, the regional hub for trade and finance in East Africa, is hampered by corruption and reliance upon several primary goods whose prices continue to decline. remain low. Following strong economic growth in 1995 and 1996, Kenya's economy has stagnated, with GDP growth failing to keep up with the rate of population growth. In 1997, the IMF suspended Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.3% in 2000. The IMF, which had resumed loans in 2000 to help Kenya through the drought, again halted lending in 2001 when the government failed to institute several anticorruption measures. Despite the return of strong rains in 2001, weak commodity prices, endemic corruption, and low investment limited Kenya's economic growth to 1%, 1%. Growth fell below 1% in 2002 because of erratic rains, low investor confidence, meager donor support, and Kenya is unlikely political infighting up to see growth above 2% in 2002. Substantial IMF the elections. In the key December 27, 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and other foreign a new opposition government took on the formidable economic problems facing the nation. Substantial donor support is and rooting out corruption are essential to prevent a further decline in real per capita output. making Kenya realize its substantial economic potential.

Kenya, the The regional hub for trade and finance in East Africa, is Kenya has been hampered by corruption corruption, notably in the judicial system, and by reliance upon several primary goods whose prices remain have remained low. Following strong economic growth in 1995 and 1996, Kenya's economy has stagnated, with GDP growth failing to keep up with the rate of population growth. In 1997, the IMF suspended Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.3% 0.2% in 2000. The IMF, which had resumed loans in 2000 to help Kenya through the drought, again halted lending in 2001 when the government failed to institute several anticorruption measures. Despite the return of strong rains in 2001, weak commodity prices, endemic corruption, and low investment limited Kenya's economic growth to 1%. 1.2%. Growth fell below 1% lagged at 1.1% in 2002 because of erratic rains, low investor confidence, meager donor support, and political infighting up to the elections. In the key 27 December 27, 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. Substantial donor support and In 2003, progress was made in rooting out corruption are essential corruption, and encouraging donor support, with GDP growth edging up to making Kenya realize its substantial economic potential. 1.7%.

The regional hub for trade and finance in East Africa, Kenya has been hampered by corruption, notably in the judicial system, corruption and by reliance upon several primary goods whose prices have remained low. In 1997, the IMF suspended Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.2% in 2000. The IMF, which had resumed loans in 2000 to help Kenya through the drought, again halted lending in 2001 when the government failed to institute several anticorruption measures. Despite the return of strong rains in 2001, weak commodity prices, endemic corruption, and low investment limited Kenya's economic growth to 1.2%. Growth lagged at 1.1% in 2002 because of erratic rains, low investor confidence, meager donor support, and political infighting up to the elections. In the key 27 December 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. In 2003, progress was made in rooting out corruption, corruption and encouraging donor support, with GDP growth edging up to 1.7%. GDP grew a moderate 2.2% in 2004.

The regional hub for trade and finance in East Africa, Kenya has been hampered by corruption and by reliance upon several primary goods whose prices have remained low. In 1997, the IMF suspended Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.2% in 2000. The IMF, which had resumed loans in 2000 to help Kenya through the drought, again halted lending in 2001 when the government failed to institute several anticorruption measures. Despite the return of strong rains in 2001, weak commodity prices, endemic corruption, and low investment limited Kenya's economic growth to 1.2%. Growth lagged at 1.1% in 2002 because of erratic rains, low investor confidence, meager donor support, and political infighting up to the elections. In the key 27 December 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. In 2003, progress was made in rooting out corruption and encouraging donor support, with GDP growth edging up to 1.7%. support. GDP grew a moderate 2.2% more than 5% in 2004. 2005.

The regional hub for trade and finance in East Africa, Kenya has been hampered by corruption and by reliance upon several primary goods whose prices have remained low. In 1997, the IMF suspended Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.2% in 2000. The IMF, which had resumed loans in 2000 to help Kenya through the drought, again halted lending in 2001 when the government failed to institute several anticorruption measures. Despite the return of strong rains in 2001, weak commodity prices, endemic corruption, and low investment limited Kenya's economic growth to 1.2%. Growth lagged at 1.1% in 2002 because of erratic rains, low investor confidence, meager donor support, and political infighting up to the elections. In the key December 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. In 2003, progress was made in rooting out corruption and encouraging donor support. Since then, however, the KIBAKI government has been rocked by high-level graft scandals. The World Bank suspended aid for most of 2006, and the IMF has delayed loans pending further action by the government on corruption. The scandals have not seemed to affect growth, with GDP grew growing more than 5% in 2005. 2006.

The regional hub for trade and finance in East Africa, Kenya has been hampered by corruption and by reliance upon several primary goods whose prices have remained low. In 1997, the IMF suspended Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.2% in 2000. The IMF, which had resumed loans in 2000 to help Kenya through the drought, again halted lending in 2001 when the government failed to institute several anticorruption measures. Despite the return of strong rains in 2001, weak commodity prices, endemic corruption, and low investment limited Kenya's economic growth to 1.2%. Growth lagged at 1.1% in 2002 because of erratic rains, low investor confidence, meager donor support, and political infighting up to the elections. In the key December 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. In 2003, After some early progress was made in rooting out corruption and encouraging donor support. Since then, however, support, the KIBAKI government has been was rocked by high-level graft scandals. The scandals in 2005 and 2006. In 2006 the World Bank suspended aid for most of 2006, and the IMF has delayed loans pending further action by the government on corruption. The international financial institutions and donors have since resumed lending, despite little action on the government's part to deal with corruption. The scandals have not seemed to affect weighed down growth, with estimated real GDP growing growth at more than 5% 6 percent in 2006. 2007.

The regional hub for trade and finance in East Africa, Kenya has been hampered by corruption and by reliance upon several primary goods whose prices have remained low. In 1997, the IMF suspended Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.2% in 2000. The IMF, which had resumed loans in 2000 to help Kenya through the drought, again halted lending in 2001 when the government failed to institute several anticorruption measures. Despite the return of strong rains in 2001, weak commodity prices, endemic corruption, and low investment limited Kenya's economic growth to 1.2%. Growth lagged at 1.1% in 2002 because of erratic rains, low investor confidence, meager donor support, and political infighting up to the elections. In the key December 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. After some early progress in rooting out corruption and encouraging donor support, the KIBAKI government was rocked by high-level graft scandals in 2005 and 2006. In 2006 2006, the World Bank and IMF delayed loans pending action by the government on corruption. The international financial institutions and donors have since resumed lending, despite little action on the government's part to deal with corruption. The scandals have not weighed down growth, Post-election violence in early 2008, coupled with estimated real the effects of the global financial crisis on remittance and exports, reduced GDP growth at more than 6 percent to 2.2% in 2007. 2008, down from 7% the previous year.

The Although the regional hub for trade and finance in East Africa, Kenya has been hampered by corruption and by reliance upon several primary goods whose prices have remained low. In 1997, the IMF suspended Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.2% in 2000. The IMF, which had resumed loans in 2000 to help Kenya through the a drought, again halted lending in 2001 when the government failed to institute several anticorruption measures. Despite the return of strong rains in 2001, weak commodity prices, endemic corruption, and low investment limited Kenya's economic growth to 1.2%. Growth lagged at 1.1% in 2002 because of erratic rains, low investor confidence, meager donor support, and political infighting up to the elections. In the key December 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. After some early progress in rooting out corruption and encouraging donor support, the KIBAKI government was rocked by high-level graft scandals in 2005 and 2006. In 2006, the World Bank and IMF delayed loans pending action by the government on corruption. The international financial institutions and donors have since resumed lending, despite little action on the government's part to deal with corruption. Post-election violence in early 2008, coupled with the effects of the global financial crisis on remittance and exports, reduced GDP growth to 2.2% 1.7 in 2008, down from 7% but the previous year. economy rebounded in 2009-10.

Although the regional hub for trade and finance in East Africa, Kenya has been hampered by corruption and by reliance upon several primary goods whose prices have remained low. In 1997, the IMF suspended Low infrastructure investment threatens Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. The IMF, which had resumed loans in 2000 to help Kenya through a drought, again halted lending in 2001 when long-term position as the government failed to institute several anticorruption measures. largest East African economy. In the key December 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. After some early progress in rooting out corruption and encouraging donor support, the KIBAKI government was rocked by high-level graft scandals in 2005 and 2006. In 2006, the World Bank and IMF delayed loans pending action by the government on corruption. The international financial institutions and donors have since resumed lending, despite little action on the government's part to deal with corruption. Post-election violence in early 2008, coupled with the effects Unemployment is very high. The country has experienced cronic budget deficits, inflationary pressures, and sharp currency depreciation - as a result of the global financial crisis on remittance high food and exports, reduced GDP growth to 1.7 fuel import prices. The discovery of oil in 2008, but March 2012 provides an opportunity for Kenya to balance its growing trade deficit if the economy rebounded in 2009-10. deposits are found to be commercially viable and Kenya is able to develop a port and pipeline to export its oil.

Kenya has been hampered by corruption and by reliance upon several primary goods whose prices have remained low. Low infrastructure investment threatens Kenya's long-term position as the largest East African economy. In the key December 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. After some early progress in rooting out corruption and encouraging donor support, the KIBAKI government was rocked by high-level graft scandals in 2005 and 2006. In 2006, the World Bank and IMF delayed loans pending action by the government on corruption. The international financial institutions and donors have since resumed lending, despite little action on the government's government''s part to deal with corruption. Unemployment is very high. The country has experienced cronic chronic budget deficits, inflationary pressures, and sharp currency depreciation - as a result of high food and fuel import prices. The discovery of oil in March 2012 provides an opportunity for Kenya to balance its growing trade deficit if the deposits are found to be commercially viable and Kenya is able to develop a port and pipeline to export its oil.

Kenya is the economic and transport hub of East Africa. Kenya’s real GDP growth has averaged around over 5% for the past several last seven years. According to recently rebased national statistics, Kenya’s GDP for 2013 was $55.3 billion, placing Since 2014 Kenya among the low has been ranked as a lower middle income countries with country because its per capita income of $1,300. GDP crossed a World Bank threshold. While Kenya has a growing entrepreneurial middle class and faster growth, its economic and development trajectory is threatened by weak governance and corruption. Unemployment and under-employment are high, but reliable numbers are hard to find.
Agriculture remains the backbone of the Kenyan economy, contributing 25% of GDP. About 80% of Kenya’s population of roughly 42 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production. While Kenya has a growing entrepreneurial middle class, faster growth and poverty reduction is hampered by corruption and by reliance upon several primary goods whose prices have remained low.
Inadequate infrastructure threatens Kenya's long-term position as the largest East African economy, although continues to hamper Kenya’s efforts to improve its economic growth to the 8-10% range so that it can meaningfully address poverty and unemployment. The KENYATTA administration has prioritized sought external investment in infrastructure development. International financial lenders institutions and donors remain important to Kenya's economic growth and development, but Kenya has also successfully raised capital in the global bond market. Kenya issued its first sovereign bond offering in mid-2014, generating $2 billion at 6% interest; the funds are slated to be used for infrastructure projects. mid-2014. Nairobi has contracted with a Chinese company to begin construction of construct a new standard gauge railway, but the project allegedly has been beset by corruption railway connecting Mombasa and fraud. Unemployment is high at around 40%. Nairobi, with completion expected in 2017. The country has chronic budget deficits and is in the process of devolving some state revenues and responsibilities to the counties. Inflationary pressures and sharp currency depreciation peaked in early 2012 but have since abated following low global food and fuel prices and monetary interventions by the Central Bank. Recent terrorism Chronic budget deficits, including a shortage of funds in Kenya mid-2015, hampered the government’s ability to implement proposed development programs, but the economy is back in balance with many indicators, including foreign exchange reserves, interest rates, inflation, and FDI moving in the surrounding region threatens Kenya's important right direction.
Tourism holds a significant place in Kenya’s economy. Multiple terror attacks by the Somalia-based group al-Shabaab in the time since the 2013 attack on Nairobi’s Westgate mall, which killed at least 67, had a negative effect on international tourism industry. earnings, but the sector is starting to recover. Kenya’s success in hosting a series of incident-free high-profile events in the second half of 2015, including the visit of US President Obama, has helped improve the outlook for tourism.

Kenya is the economic economic, financial, and transport hub of East Africa. Kenya’s real GDP growth has averaged over 5% for the last seven eight years. Since 2014 2014, Kenya has been ranked as a lower middle income country because its per capita GDP crossed a World Bank threshold. While Kenya has a growing entrepreneurial middle class and faster steady growth, its economic and development trajectory is threatened could be impaired by weak governance and corruption. Unemployment and under-employment are high, but Although reliable numbers are hard to find. find, unemployment and under-employment are extremely high, and could be near 40% of the population.
Agriculture remains the backbone of the Kenyan economy, contributing 25% one-third of GDP. About 80% 75% of Kenya’s population of roughly 42 44.2 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production.
Inadequate infrastructure continues to hamper Kenya’s efforts to improve its economic annual growth to the 8-10% 8%-10% range so that it can meaningfully address poverty and unemployment. The KENYATTA administration sought has been successful in courting external investment in for infrastructure development. International financial institutions and donors remain important to Kenya's economic growth and development, but Kenya has also successfully raised capital in the global bond market. Kenya issued its first sovereign bond offering in mid-2014. Nairobi has contracted with a Chinese company to construct a new standard gauge railway connecting Mombasa and Nairobi, with completion expected in June 2017. The In 2013, the country adopted a devolved system of government with the creation of 47 counties, and is in the process of devolving some state revenues and responsibilities to the counties. Inflationary pressures and sharp currency depreciation peaked in early 2012 but have since abated following low global food and fuel prices and monetary interventions by the Central Bank. Drought-like conditions in parts of the country have pushed 2017 inflation above 8%. Chronic budget deficits, including a shortage of funds in mid-2015, hampered the government’s ability to implement proposed development programs, but the economy is back in balance with many indicators, including foreign exchange reserves, interest rates, inflation, and FDI moving in the right direction. Underlying weaknesses were exposed in the banking sector in 2016 when the government was forced to take over three small and undercapitalized banks. In 2016, the government enacted legislation that limits interest rates banks can charge on loans and set a rate that banks must pay their depositors. This measure led to a sharp shrinkage of credit in the economy.
Tourism holds a significant place in Kenya’s economy. Multiple terror A spate of terrorist attacks by the Somalia-based group al-Shabaab in the time since the reduced international tourism earning after their deadly 2013 attack on Nairobi’s Westgate mall, which killed at least 67, had a negative effect on international tourism earnings, 67 people, but the sector is starting to recover. Kenya’s success in hosting a series of incident-free high-profile events in the second half of 2015, including the visit of US President Obama, has helped improve the outlook for tourism. now recovering. In 2016, tourist arrivals grew by 17% while revenues from tourism increased by 37%.

Kenya is the economic, financial, and transport hub of East Africa. Kenya’s real GDP growth has averaged over 5% for the last eight years. decade. Since 2014, Kenya has been ranked as a lower middle income country because its per capita GDP crossed a World Bank threshold. While Kenya has a growing entrepreneurial middle class and steady growth, its economic and development trajectory could be has been impaired by weak governance and corruption. Although reliable numbers are hard to find, unemployment and under-employment are extremely high, and could be near 40% of the population.
In 2013, the country adopted a devolved system of government with the creation of 47 counties, and is in the process of devolving state revenues and responsibilities to the counties. Agriculture remains the backbone of the Kenyan economy, contributing one-third of GDP. About 75% of Kenya’s population of roughly 44.2 48.5 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production.
Tourism also holds a significant place in Kenya’s economy. In spite of political turmoil throughout the second half of 2017, tourism was up 20%, showcasing the strength of this sector. Kenya has long been a target of terrorist activity and has struggled with instability along its northeastern borders. Some high visibility terrorist attacks during 2013-2015 (e.g., at Nairobi’s Westgate Mall and Garissa University) affected the tourism industry severely, but the sector rebounded strongly in 2016-2017 and appears poised to continue growing. Inadequate infrastructure continues to hamper Kenya’s efforts to improve its annual growth to the 8%-10% range so that it can meaningfully address poverty and unemployment. The KENYATTA administration has been successful in courting external investment for infrastructure development. International financial institutions and donors remain important to Kenya's economic growth and development, but Kenya has also successfully raised capital in the global bond market. Kenya issued market issuing its first sovereign bond offering in mid-2014. Nairobi has contracted mid-2014, with a Chinese company to construct second occurring in February 2018. The first phase of a new Chinese-financed and constructed standard gauge railway connecting Mombasa and Nairobi, with completion expected Nairobi opened in June May 2017. In 2013, the country adopted a devolved system of government with the creation of 47 counties, and is in the process of devolving state revenues and responsibilities to the counties. Inflationary pressures and sharp currency depreciation peaked in early 2012 but have since abated following low global food and fuel prices and monetary interventions by the Central Bank. Drought-like conditions in parts of the country have pushed 2017 inflation above 8%. Chronic budget deficits, including a shortage of funds in mid-2015, hampered the government’s ability to implement proposed development programs, but the economy is back in balance with many indicators, including foreign exchange reserves, interest rates, and FDI moving in the right direction. Underlying weaknesses were exposed in the banking sector in 2016 when the government was forced to take over three small and undercapitalized banks. In 2016, the banks when underlying weaknesses were exposed. The government also enacted legislation that limits interest rates banks can charge on loans and set a rate that banks must pay their depositors. This measure led to a sharp shrinkage of credit in the economy.
Tourism holds a significant place in Kenya’s economy. A spate prolonged election cycle in 2017 hurt the economy, drained government resources, and slowed GDP growth. Drought-like conditions in parts of terrorist attacks by the Somalia-based group al-Shabaab reduced international tourism earning after their deadly 2013 attack on Nairobi’s Westgate mall, which killed 67 people, country pushed 2017 inflation above 8%, but the sector rate had fallen to 4.5% in February 2018. The economy, however, is now recovering. well placed to resume its decade-long 5%-6% growth rate. While fiscal deficits continue to pose risks in the medium term, other economic indicators, including foreign exchange reserves, interest rates, current account deficits, remittances and FDI are positive. The credit and drought-related impediments were temporary. Now In 2016, tourist arrivals grew by 17% while revenues from tourism increased by 37%. his second term, President KENYATTA has pledged to make economic growth and development a centerpiece of his second administration, focusing on his "Big Four" initiatives of universal healthcare, food security, affordable housing, and expansion of manufacturing.

Kenya is the economic, financial, and transport hub of East Africa. Kenya’s real GDP growth has averaged over 5% for the last decade. Since 2014, Kenya has been ranked as a lower middle income country because its per capita GDP crossed a World Bank threshold. While Kenya has a growing entrepreneurial middle class and steady growth, its economic development has been impaired by weak governance and corruption. Although reliable numbers are hard to find, unemployment and under-employment are extremely high, and could be near 40% of the population. In 2013, the country adopted a devolved system of government with the creation of 47 counties, and is in the process of devolving state revenues and responsibilities to the counties.
Agriculture remains the backbone of the Kenyan economy, contributing one-third of GDP. About 75% of Kenya’s population of roughly 48.5 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production. Tourism also holds a significant place in Kenya’s economy. In spite of political turmoil throughout the second half of 2017, tourism was up 20%, showcasing the strength of this sector. Kenya has long been a target of terrorist activity and has struggled with instability along its northeastern borders. Some high visibility terrorist attacks during 2013-2015 (e.g., at Nairobi’s Westgate Mall and Garissa University) affected the tourism industry severely, but the sector rebounded strongly in 2016-2017 and appears poised to continue growing.
Inadequate infrastructure continues to hamper Kenya’s efforts to improve its annual growth so that it can meaningfully address poverty and unemployment. The KENYATTA administration has been successful in courting external investment for infrastructure development. International financial institutions and donors remain important to Kenya's growth and development, but Kenya has also successfully raised capital in the global bond market issuing its first sovereign bond offering in mid-2014, with a second occurring in February 2018. The first phase of a Chinese-financed and constructed standard gauge railway connecting Mombasa and Nairobi opened in May 2017.
In 2016 the government was forced to take over three small and undercapitalized banks when underlying weaknesses were exposed. The government also enacted legislation that limits interest rates banks can charge on loans and set a rate that banks must pay their depositors. This measure led to a sharp shrinkage of credit in the economy. A prolonged election cycle in 2017 hurt the economy, drained government resources, and slowed GDP growth. Drought-like conditions in parts of the country pushed 2017 inflation above 8%, but the rate had fallen to 4.5% in February 2018.
The economy, however, is well placed to resume its decade-long 5%-6% growth rate. While fiscal deficits continue to pose risks in the medium term, other economic indicators, including foreign exchange reserves, interest rates, current account deficits, remittances and FDI are positive. The credit and drought-related impediments were temporary. Now In his second term, President KENYATTA has pledged to make economic growth and development a centerpiece of his second administration, focusing on his "Big Four" initiatives of universal healthcare, food security, affordable housing, and expansion of manufacturing.

fast growing, third largest Sub-Saharan economy; strong agriculture and sector with emerging services and tourism industries; IMF program to address current account deficit and high debt; broadband debt service challenges; business-friendly policies foster infrastructure investment, digital innovation and mobile-money platform investments; surging inflation due public-private partnerships; vulnerable to oil and food hikes; new investor-friendly incentives; environmentally fragile economy climate change-induced droughts