- Economic Overview
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 kilometres of attractive coastline and above all, a government that is committed to implementing business reforms.
Kenya’s economy remained one of the strongest economies in Africa recording a GDP of Kshs. 7749. 4 billion (US$ 77.494 billion) and growing at 4.9 % in 2017. Agriculture is the most important contributor to Kenya’s GDP at 24.9 %. Tea and horticulture are the leading export earners for Kenya. In 2017, tea and horticulture exports were valued at Kshs. 147.3 billion (US$ 1.473 billion) and Kshs. 113.3 billion (US$ 1.133 billion) respectively. Africa is the leading destination of Kenya’s exports followed by Asia and Europe. Kenya’s main exports to Japan are tea, coffee and cut flowers. Pakistan remains the leading importer of Kenyan tea.
Kenya’s position as the economic, commercial and logistical hub in Eastern Central Africa, places the country as one of the best investment destinations globally. Foreign Direct Investments (FDI) has been on the rise and is strongest in the East Africa region. Additionally, the re-based Gross Domestic Product (GDP) figures of USD 58.1 Billion in 2014 elevated Kenya to a Lower Middle Income Country, one of the largest economies in Sub-Saharan Africa and amongst the fastest growing in the world. In the region, Kenya is the dominant economy in the East Africa Community, contributing to more than 40% of the region’s GDP. This is also uniquely distinguished from many countries by the fact that Kenya’s economy has for a long time been one of the most diversified with no oil, nor gas exports. The recent discovery of oil in Turkana (northern part of the country) is likely to strengthen and boost Kenya’s economic growth.
Other Milestone steps evidenced in modernizing railways, seaports, the airports, and development of geothermal power stations, all puts Kenya on an accelerated developmental pedestal. This is further complemented by Kenya being a member of both the EAC and COMESA economic regional blocs, which both gives a combined market population of over 400 million which is about a half of Africa’s total population.
For more information on the overall economic outlook, and GDP growth of the Kenyan Economy click http://www.knbs.or.ke/.
Kenya Vision 2030 is the country’s long-term development blueprint covering the period 2008 to 2030. It aims at transforming Kenya into a newly industrializing, “middle income country providing a high quality life for all its citizens by the year 2030”. The Vision was developed through an all-inclusive stakeholder consultative process, involving Kenyans from all parts of the country. The Vision was developed to provide continuity to the growth trajectory realised by the successful implementation of the Economic Recovery Strategy for Wealth and Employment Creation (ERS) that saw the country’s economy grow from a dismal 0.6% in 2002 to a high of 7.1% in 2007.
The Vision is motivated by the collective aspiration for a better society, providing high quality life for all its citizens by the year 2030”. It is anchored on 3 pillars namely; the economic pillar, the social pillar and the political pillar. The economic pillar aims at providing prosperity for all Kenyans through an economic development programme aimed at achieving a sustained average Gross Domestic Product (GDP) growth rate of 10 % per annum. The social pillar seeks to build “a just and cohesive society with social equity in a clean and secure environment”. The political pillar aims at realizing a democratic political system founded on issue-based politics that respects the rule of law, and protects the rights and freedoms of every individual in the Kenyan society.
The Kenya Vision 2030 is a long-term development strategy, being implemented in successive five-year Medium-Term Plans (MTPs), the first being MTP 2007/08 – 2012, the second MTP being 2013 – 2017 and the third and current being MTP 2018- 2023.
For more information : VISION 2030
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.
Doing Business 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. The Government has also prioritised the Big 4 agenda in the medium term (2018/19 – 2022/23) focusing on manufacturing, food and nutrition security, affordable housing and universal health care. This has been complemented by the integration of the EAC and the establishment in 2005 of a customs union and a common market (2010). Further Kenya is a member of COMESA with 21 countries; a population of 560 million people and a GDP of USD 769 billion.
In March 2018, in Kigali Rwanda, during the Extra Ordinary Summit on the African Continental Free Trade Area (AfCFTA), Kenya was among the 44 countries that signed the AfCFTA Agreement and later to be the 2nd to ratify it. The AfCFTA created a market of more than 1.2 billion people; a GDP of USD 3.4 trillion and expected to increase intra-African trade by 52.3% or USD 34.6 billion by 2022.
The initial step in forming a company is to register the proposed company name with the Registrar of Companies at the Attorney General’s Chambers in Nairobi. The Memorandum and Articles of Association should be filed with the Registrar of Companies who, upon satisfaction, issues the Certificate of Incorporation.
For more information :Starting A Business in Kenya – Kenya Investment Authority