International business in Kenya

What You Should Know About International Business in Kenya

International Business in Kenya

Kenya is located in East Africa bordering the Indian Ocean, between Somalia and Tanzania.

It has diverse geographical areas including mountains, plains as well as desserts. Kenya is widely famous for its tourism, particularly wildlife safaris.

Kenya is a parliamentary democratic country with a multi-party political system. Elections in Kenya are open, free and highly competitive. The parliament includes the National Assembly and the Senate. Elections are held every five years. The president and the deputy president comprise the executive. The president nominates a candidate who is not a part of the National Assembly with the approval of the assembly as a cabinet minister.

Economic Parameters Kenya as of 2016

Population (million) 48.46
GDP (billion USD) 63
GDP per capita (USD) 1,455
GDP per capita PPP (USD) 3,156
Purchasing power per dollar, compared to the USA 217%
Surface area (sq km) 580,370
% of population living in urban areas 25%
% of GDP added by agriculture - industry - services 30% - 19% - 50%
Ease of doing business index (1 = best, 180 = lowest) 136

In Kenya percentage of income held by the top 10% was around 37.99%, and by the lowest 10% was around 1.96%

Economy in Kenya

Know as the economic and transport hub of East Africa, Kenya’s has recorded real GDP growth at almost 5% for the past several years. The country has has a thriving entrepreneurial culture. However, corruption is the main culprit that hampers faster growth and poverty reduction.

The country’s poor infrastructure weakens Kenya's long-term position as the largest East African economy.

International financial funding agencies and donors still play a major role Kenya's economic growth and development. Recently Kenya raised capital in the global bond market. The first sovereign bond (slated for infrastructure spending) offering in mid-2014, generated $2 billion at 6% interest. Rapidly falling global food and fuel prices and monetary interventions by the Central Bank have eased off inflationary pressures on Kenyan economy. However, recent instances of terrorism in Kenya Kenya's major economic driver - tourism industry.

What are business opportunities in Kenya?

  • Major business sectors are agriculture, which is the involves the major portion of GDP. Mainly for exports fresh vegetables and flowers are being grown. Even horticulture has started to improve in the past few years.
  • Tourism is the major business sector due to the diverse climate.
  • Manufacturing includes tenth part of the GDP of the country. Mainly the cement industry is improving rapidly. Tourism and communication sectors constitute around 11% of the GDP and are improving rapidly.

Major Industries in Kenya

    • Agriculture
      -The agricultural sector is the backbone of Kenya's economy. The fertile land is ideal for Tea, coffee, sisal, pyrethrum, corn, and wheat. The semi-arid savanna to the north and east has seen growth in Livestock. Coconuts, pineapples, cashew nuts, cotton, sugar cane, sisal, and corn are the main produce of the lower-lying areas.
    • Forestry and fishing
      -Output from forestry has been depleted with depleting resources. Fisheries remain an important activity around Lake Victoria and have shown growth potential on Lake Turkana.
    • Mining and minerals
      -The major mining production in Kenya is soda ash operation at Lake Magadi. The chief minerals found are limestone, gold, and salt.  Huge quantities of niobium, fluorspar,and fossil fuel are also found.
    • Industry and manufacturing
      -Kenya ranks as the the most industrially developed country in East Africa. However, disruptions in hydroelectric power, soaring energy costs, dysfunctional transport infrastructure, and cheap imports continue to challenge domestic production.
    • Energy
      -Kenya's electricity supply is largely dependent on hydroelectric stations at dams along the Tana River and the Turkwel Gorge Dam in the west.  Draughts result in periodic shortfalls in electricity supply.
    • Tourism
      -Tourism dominates Kenya's services sector that contributes about 63 percent of GDP.
  • Financial services
    -Kenya is the most important hub for financial services in the East and Central Africa. The market capitalisation of Nairobi Stock Exchange (NSE) is 4th in Africa. The Central Bank of Kenya (CBK) oversees Kenya’s banking system.

What are Kenya’s important events?

  • In Kenya Good Friday and Easter Monday, Christmas and New Years are public holidays. Eid al-Fitr usually in September is also celebrated in Muslim regions of Kenya. Jamhuri day, which means Republic day is also a public holiday and is celebrated on 12 December every year as Kenya got independence from Britain in 1963 on the same day.
  • There are major carnival festivals that attract tourists from all over the world. Important festivals include Lamu Cultural Festival, Lake Turkana Festival, Mombasa Carnival, International Camel Derby Festival and the famous Safari rally.

Public holidays in Kenya

There are approximately twelve nationally recognized public holidays celebrated in the Republic of Kenya, a country in East Africa:

  • January 1-New Year's Day
  • Good Friday - date variable
  • Easter - date variable
  • Easter Monday - date variable
  • May 1-Labour Day
  • June 1-Madaraka Day
  • Eid al-Fitr (End of Ramadan) - date depends on the sighting of the moon
  • October 20-Mashujaa Day, formerly Kenyatta Day
  • December 12-Jamhuri Day
  • December 25-Christmas Day
  • December 26-Boxing Day

To expand your international business in Kenya, a complete market research will help you understand the country and formulate your expansion strategy.