Economic Overview

| Overview | Vision 2030 | Important multinationals active in Kenya |
| GDP growth and an economic outlook | Reform programmes and challenges |
| Small and Medium-sized Enterprises (SMEs) |

Mombasa Port

The Kenyan economy, East Africa's largest, has experienced considerable growth in the past few years, driven by several key factors. The country enjoys some particular advantages: a reasonably well-educated labour force, a vital port that serves as an entry point for goods destined for countries in the East African and Central Africa interior, abundant wildlife and kilometers of attractive coastline and above all, a government that is committed to implementing business reforms.

Kenya's agricultural development remains the most important contributor to GDP with horticultural industry of mainly high quality cut flowers being among the leading export products. KKenya's transport and communications infrastructure are of a middling quality, although recent developments should bring about more vigorous competition and better services in the medium and long term. Kenya is part of the East African Community (EAC), of which Tanzania, Uganda, Rwanda and Burundi are the other members. The EAC is working toward a closer integration and this is likely to have far-reaching, positive consequences for Kenya's economy. Kenya is also a member of COMESA, the 20 member Common Market for East and Southern Africa, opening up the way for trade across Eastern and Southern Africa for nearly 400 million people which is about a half of Africa's total population.

The development of the EAC presents opportunities, as well as challenges for Kenya. Kenya's economy is considerably larger than those of Uganda and Tanzania, not to mention Burundi and Rwanda, and it has been necessary for the government to make tax concessions so that the customs union, in effect from January 1, 2005 does not unfairly disadvantage the other members.

Vision 2030

In October 2006, the Kenyan government unveiled vision 2030 with a focus to Transforming National Development. This is an ambitious long-term strategy that will supersede the Economic Recovery Strategy for Wealth and Employment Creation (ERSWEC) which expired in 2007. Vision 2030 aims to turn Kenya into an economic powerhouse by increasing income per head five fold to $3000, achieving annual economic growth of 10 percent, and transforming the country into an efficient modern democracy. Vision 2030 will be steered by the National Economic and Social Council (NESC), which is chaired by the President and the CEOs of top businesses and other organizations.The Council is further reinforced by Personalities of high calibre profile like Baroness Linda Chalker of the United Kingdom.

Important multinationals active in Kenya

Barclays Bank, Standard Chartered Bank and mobile service provider Vodafone (all three from the UK) are among the top companies doing business in Kenya. Also present are Bata, the global shoe company headquartered in Canada, and Beiersdorf, the German chemical manufacturer and producer of Nivea skincare products. Other multinationals operating in Kenya include British American Tobacco (BAT), food manufacturer Cadbury and Toyota Tsusho Corporation.

GDP growth and an economic outlook

Kenya's 2005 real GDP at market prices according to CBK data was approximately KSH 1,415 trillion or $ 20.6billion.GDP growth for 2006 stood at 6.1 percent. Growth in 2005 was 5.8 percent, in 2004 4.9 percent and in 2003 3 percent. GDP per head was KSH 40,489 up from KSH 37,655 the previous year.

The outlook for Kenya's economy over the next three years is varied with continued high oil prices which are likely to affect stability and inflation albeit slightly.

Reform programmes and challenges

President Kibaki's reform agenda includes plans to privatize most parastatals and create more conducive environment for investment, both domestic and foreign.

The government in 2006 took major steps towards divestment of public enterprises under its control. The administration is also working to promote more vigorous competition, not just in sectors that were or remain monopolized by parastatals. The Kenyan public has become more welcoming to foreign investors' entries into domestic markets. At the same time, the Kenya Investment Authority (KIA) has moved to make smooth the process of investing in Kenya. KIA is working towards becoming a one-stop shop, as it is still necessary at the moment to apply to other ministries for industry-specific licenses, such as those in the mining sector.According to the ground breaking report on Kenya's "Businesses Licensing Reforms released in early 2007, government intends to scrap hundreds of license obligations as a way forward and aims to lower the minimum investment amount to from $500,000 to $100,000.

Getting an investment in Kenya underway is an easy and transparent process today, thanks to the Kenya Investment Authority (KIA) which specializes in guiding foreign investors. Consulting KIA agents is the first in a series of steps towards investing in Kenya. As one can easily begin with the Kenya Investment Authority (KIA) whose head office is located in Nairobi. Further information on KIA's investment assistance and information can be found at Kenyan embassies and high commissions around the world as well their website - www.investmentkenya.com - which  provides detailed information and easy-to-follow guides on investing in Kenya. Still others seek advice from consultants and lawyers.

Small and Medium-sized Enterprises (SMEs)