Kenya is a steadily growing economy that is said to be the ninth largest in sub-Saharan Africa. Despite challenges of high public debt and corruption, the East African country whose growth currently stands at 5.5 per cent, a 0.5 per cent dip from 2016’s six per cent is still very much stable and retaining its competitiveness in the continental market. Here are some of the sectors that are said to be the drivers of the Kenyan economy, according to Business Insider, a financial and business news source
This is Kenya’s main economic backbone despite numerous challenges that have afflicted it lately. It contributes about 24 per cent to the gross domestic product (GDP) and accounts for about 65 per cent of Kenya’s total exports.
Despite its importance, Kenya is yet to fully commercialise the sector and long-term sustainable policies are lacking.The sector which has an overall stake of 78 per cent of the total employment ratio in the country still has old fashioned approaches to production and low push for value addition practices which has made it to stagnate.
Kenya has a mammoth 57,000 square km of arable land but still not so much utilisation is being done on it even with favourable weather available.
Experts agree that Kenya needs a diversification plan to address issues around food security so that there is no over-reliance on one product at the expense of others.
This sector has thrived in the last decade due to many interventionary measures by the government and other key stakeholders. It has also had its fair share of challenges particularly with regard to insecurity, which in turn has turned away a number of external travellers due to bans.
Nonetheless, Kenya with its beautiful scenery continues to attract A-list names which in effect mean it is still a trusted destination. From Masai Mara, Coast area and Mount Kenya regions, these places have established themselves as independent brands, and through county government strategies and Kenya Tourism Board policies, are always attracting huge numbers of visitors.
Tourism is Kenya’s top earner and accounts for 10 per cent of GDP compared to a mere 2.39 per cent in 2007. Kenya received 97,883 tourists in 2016 from US compared to 96,404 from UK, according to KTB statistics.
Kenya has a population of about 45 million with 70 per cent of that being the youth who have the thirst to spur development for the country and themselves.
The country is also blessed with some of the most educated, hardworking and knowledgeable populations in the continent. This is important in regard to skills transfer and market adaptability. Nairobi was recently ranked by a CNN Report as the most intelligent City in Africa.
Seeing as a country’s biggest resource is its people, a United Nations estimation study has projected that the life expectancy of Kenyan citizens will probably rise from 54 years to 68 years by 2050. According to the 2017 Wealth Report, Kenyans are said to have prospered to the ranks of the wealthiest in the continent.
This is one significant sector that has spurred the economy big time and over the last decade statistics support this. Kenya’s ever-growing middle class who have the understanding of the good stuff is arguably the biggest asset and driver of this space.
Nairobi has suddenly become sub-Saharan Africa’s top destination for top developers setting up shopping malls. Currently, the capital city has 391,000 square metres of total shopping mall space with an extra 470,000 square metre in the pipeline.
Top global brands have also flocked the country such as Kentucky Fried Chicken (KFC), Bossini, Woolworths and Carrefour due to the country’s economic strength.
5. Manufacturing sector
The domestic manufacturing sector has also attempted to hold its own despite the challenge of foreign entities. Increasingly, many quality products are being developed or manufactured locally that are equally competitive in the market.
In the process, Kenyan workers are gaining big skills and at the same time hundreds more are getting employed to earn a buck. Multinational companies in the last decade have set their bases in the country further raising Kenya’s profile as a hub for business and proving the sector is ripe for growth.
A locally assembled all-weather vehicle, Mobias 11, has had orders from as far as US, giving the impression that local products also are getting approvals.
6. Finance sector
Kenya’s liberal market and fairly friendly operational policies has meant the financial sector is a thriving one. One of Kenya’s top banks by numbers, Equity Bank, has been recognised as among the fastest growing in the world. Kenya is currently ranked 92nd out of 190 in the World Bank’s Ease of Doing Business Report of 2017.
The local money market is currently among the strongest in the continent and overall the fourth fastest growing digital economy.
Another leading bank, KCB Group was also named in 2017 as Kenya’s Bank of the Year by the Financial Times of London owing to its asset base and product portfolio strength. The sector has also embraced revolutionary technology from money transfer service to the world beating M-Pesa service.
Kenya has over the past decade or so invested billions of shillings through arrangements with developed partners on solid infrastructural plans. From telecommunications to road and railway developments, the country has become a model that many other countries want to borrow the template from.
These massive projects have seen many international companies set shop in the country as they seek to secure a foothold in the region which has a population of almost 200 million people. Particularly gratifying is the investment by the government and private sector on the telcos front which has made communication faster and easier due to the current 5G network in place.
The Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) corridor project which when complete will transform the East African ecosystem and the widely appraised Standard Gauge Railway (SGR) are some of the projects that have made Kenya on many lips.
This is considered to be a sleeping giant with a potential to transform the fortunes of the country. Over the past couple of years, lots of licences have been issued to mining companies to excavate various minerals, especially precious stones.
Kenya has a rich deposit of rare minerals. Firms that have already settled down in the business include the Coast-based Titanium Inc.
With Kenya’s plans of exporting crude oil come 2021, the sector is seen as holding a great promise for the economy. The northern frontier particularly would be the greatest beneficiaries and this could well transform the states in the region for the better.
It is suggested that the oil that is extracted from Kenya has fairly low sulphur levels and would thus fetch high pricing in the international market. Already Tullow Oil has struck 750 millions of the “Black Gold” since 2012 and this has led to plans of constructing an 865 kilometre pipeline from Lokichar, Turkana and to Lamu.
Both national and county governments and the locals will earn returns even before exportation begins in the initial public offering (IPO) of National Oil Corporation shares estimated to rise to Sh103 billion.
10. Blue Economy
Kenya’s total maritime territory covers 230,000 square kilometres and a distance of 200 nautical miles offshore or more locally it is as big as 31 of the 47 counties combined according to Kenya Maritime Authority (KMA).
Experts have argued that this sector has been poorly utilised despite potential signs. The government is, however, keen to work out a plan to reap big and in the recent past signed a memorandum of understanding of co-operation in marine time, tourism and trade with Seychelles. The Indian Ocean island country is big on the sector and is the single most valued product for the tiny economy.