Kenya is now classified as a middle-income country and the ninth largest economy in Africa up from position 12. This is after a review of its national economic data which increased the size of the economy by 25.3%.
This is the sixth time that Kenya has revised its Gross Domestic Product (GDP) since independence, an exercise conducted by the Kenya National Bureau of Statistics (KNBS). The revision has enabled Kenya achieve a major “Vision 2030” development objective of attaining a middle-income country status 15 years well before the 2030 target.
Kenya is the largest and the most advanced economy in East and Central Africa; with strong growth prospects supported by an emerging, urban middle class with an increasing appetite for high value goods and services.
Comparative GDP, Current USD BN, 2013 source: World Bank
Kenya is the dominant economy in the East Africa Community, contributing to more than 40% to the region’s GDP.
Kenya has the second largest population within the EAC at ~41.8 MN and is growing at a rate of 2% p.a. There is a rising trend towards urbanisation which is contributing to an increase in consumer demand for high value goods. This trend is forecasted to continue, with 50% of the population expected to live in urban areas by 2050.
The size of Kenya’s middle class is growing as evidenced by the growth in its GNI per capita, which has increased at a CAGR of 2%. over the past 10 years
Kenya’s investment climate is the strongest in the EAC, with FDI flowing in from emerging and developed markets and a high volume of multinationals with regional and continent-wide headquarters in the country
FDI has been on the rise and is significantly stronger than investment in other EAC countries. Given its position as the economic, commercial and logistical hub of East Africa, private equity capital is now flowing into Kenya.
In 2013, Kenya was the top destination for international investors in the Eastern Africa Region after attracting 12 private equity deals valued at over USD 110.5 million.
Recent Landmark Investments
Strategic Geographical Location
Kenya’s geographical location makes the country ideal for strategic partnerships aimed at improving regional and global market share.
Kenyan infrastructure is the gateway to the vibrant East and Central Africa region and access to the 138 million population i.e. Mombasa ports, KE-UG railway.
Jomo Kenyatta International Airport functions as an effective air hub between Africa, Europe and Asia.
Kenya’s membership to regional economic blocs, coupled with her strategic geographic position, makes the country the gateway to the huge EAC and COMESA regional Markets and beneficiary of several trade preferential arrangements.
Kenya is a member to several trade arrangements and beneficiary to trade-enhancing schemes that include the Africa Growth and Opportunity Act (AGOA), World Trade Organisation and EAC-EU Trade Agreement.
Soon there will be Tripartite Free Trade Area (FTA) cooperation, a regional bloc of the EAC, COMESA and SADC nations.
POTENTIAL MARKET: 600 MILLION PEOPLE!
Political stability and Favourable Investment Policy
Empowered by a new constitution and administration, the national and county governments are approaching the private sector as a central partner in the development and growth of the Kenyan economy.
A New Government
The new Jubilee Administration regards the private sector as a key centre of economic and social development and has signalled this shift in government’s orientation through the divestment of its majority shareholding in state commercial companies through the Nairobi Securities Exchange.
Business Environment Reforms
Kenya is making efforts to lower the cost of doing business by conducting extensive business regulatory reforms intended to substantially reduce the number of licensing requirements and to make the licensing regimes more transparent and focused on legitimate regulatory purposes.
Open Market Access System
Kenya has fully liberalised its economy and removed all obstacles that previously hampered the free flow of trade and private investment, such as exchange controls, import and export licensing, as well as restrictions on remittances of profits and dividends.
Devolution into County Governments
Empowered by the new constitution, devolution offers an opportunity for investment through localised innovation with scale through collaboration by building commercial ecosystems in each county that expand employment opportunities and empower local communities.
Tax Treaties and Investment Promotion and Protection Agreements
Kenya’s infrastructure landscape is also undergoing significant transformation as evidenced by commitment of over USD20 billion towards infrastructure development through public private partnerships.
Increasing investment in infrastructure under PPP arrangements
KONZA TECHNOLOGY CITY “SILICON CITY” ($ 14.5BN)
IT Hub to be built on 5000 acres of land in Machakos County.
LAMU PORT SOUTHERN SUDAN –ETHIOPIA TRANSPORT CORRIDOR (LAPPSET) ($ 5.5BN)
Construction of Lamu Port headquarters is in progress.
STANDARD GAUGE RAILWAY ($ 2.6BN)
Railway systems around Nairobi, connecting Mombasa to Malaba/Kisumu to be complete in 2018.
JOMO KENYATTA INTERNATIONAL AIRPORT EXPANSION ($ 654MN)
Construction of a 178,000sqm facility to be complete in 2017, complemented by Nairobi Commuter Rail Service linking the city centre to the airport.
MOMBASA PORT EXPANSION ($ 366MN)
Harbour channel was deepened by 15 metres and widened to 500 metres to accommodate larger vessels.
THIKA SUPERHIGHWAY ($ 360MN)
Construction of the eight-lane controlled-access 50-km Nairobi– Thika superhighway was completed in 2012.
Reducing cost of energy and improving energy availability
Kenya is also perfectly positioned to unleash Africa’s power generation capacity through its focus on green and cost effective sources of energy, set to contribute to a 5000MW increase in the national power grid.
Power & Energy Strategy
Increasing share of power generated from green and more cost effective sources, with a target to increase electricity generation capacity by 5,000MW from the current 1,644MW to 6,700 MW in 40 months.
Key Power Project and Recent Resource Discoveries
WIND POWER PROJECT
300 MW Lake Turkana Wind Power Project valued at USD 823MN.
Two new water sources at Turkana Basin and Lotikipi Basin holding 250bn m³ of water, sufficient to supply Kenya for 70 years.
Discovery of reserves by Tullow oil, estimated to extract as much as one billion barrels.
GEOTHERMAL POWER PROJECT
3,000 MW Geothermal Power Project in Baringo valued at USD135MN.
COAL POWER PLANT
900 -1,000MW Coal Power Plant in Lamu.
NATURAL GAS PLANT
700-800 MW Natural Gas Fired Plant near Mombasa through a PPP.
Well Established Private Sector
Kenya’s private sector is very substantial including a number of foreign investors and is touted as one of the most resilient in the world. Key players in voicing private-sector concerns include: Kenya Private Sector Alliance (KEPSA), Federation of Kenya Employers (FKE) and the Kenya Association of Manufacturers (KAM).
Vibrant capital markets
Foreign participation in NSE: 54.1% of total equity turnover (January-June 2014)
Large Pool of Labor Force
Kenya prides itself in its large pool of highly educated, skilled and sought after work force in Africa trained from within the country and in institutions round the world. It is estimated that over 55% of the Kenyan population is aged between 15 and 64. This means therefore that majority of the population is active and able to provide labour.
List of institutions involved in investment promotion
Kenya Investment Authority (KENINVEST)
Kenya Railways Headquarters,
Block D, 4th Floor Workshop Road,
off Haile Selasie Avenue
P.O. Box 55704 – 00200 City Square Nairobi, Kenya.
Pilot Line: +254 (730) 104-200
Fax: +254 020 2243862
Office cell: +254 730 104 900
Export Processing Zone Authority
Administration Building, Viwanda Road,
off Nairobi-Namanga Highway,
Athi River, Kenya
P.O. Box 50563 Nairobi 00200 Kenya
VoIP Lines: 020-7606040/3
Cellphone (Safaricom): 0713-051172/3;
Export Promotion Council
1st and 16th Floor
Anniversary Towers, University Way
P.O. Box 40247 00100 GPO
Tel: +254 20 222 8534-8
Vision 2030 Delivery Secretariat
Kussco Centre, 2nd Floor,
P.O. Box 52301-00200
Tel: +254 20 272 20 30, +254 20 272 22 004
Fax: 254-20-809 13 53
Konza Technopolis Development Authority (KOTDA)
5th Floor, Capital West Business Centre,
Opposite New Rehema House, Westlands,
P.O. Box 30519-00100
LAPSSET Corridor Development Authority (LCDA)
Chester House Building, Koinange Street,
Kenya Association of Manufacturers
86 Riverside lane,
Off Riverside drive,
P.O. Box 30225 – 00100
Tel: +254 20 3746022
Fax: +254 20 2166658
Cell: +254 722201368 / 734646005/4
Heritan House, Ground Floor, Woodlands Road, Off Argwings Kodhek Road,
Opposite Department Of Defence HQs, Hurlingham.
P.O Box 47024-00200,