Kenya

Kenya, officially the Republic of Kenya, East Africa, about halfway down, near the horn of Africa. It has the Indian Ocean to its east and Lake Victoria to its west. Kenya borders the nations of Somalia (east), Ethiopia (north), South Sudan (north-west), Uganda (west), and Tanzania (south). 

The country has the most vibrant economy in East Africa, and Nairobi is the main commercial centre of the country. Nairobi has a well-developed infrastructure, including modern financial and communications systems. Leading domestic (Kenya Commercial Bank) and international banks (Barclays, Citibank, Standard Chartered) operate out of Nairobi.

With 47 simultaneous counties, Kenya is governed by elected governors. At 580,367 square kilometres (224,081 sq mi), Kenya is the world’s 48th largest country by total area. With a population of more than 47.6 million people, Kenya is the 29th most populous country.

Kenya is named after Mount Kenya, a major landmark and the second highest mountain peak in Africa, and its first inhabitants were hunter-gatherers related to modern Khoisan speakers.. Bantu-speaking farmers began to populate the region by the first millennium AD followed quickly by Arab traders.

The colonial history of Kenya dates from the Berlin Conference of 1885 when the European powers first partitioned East Africa into spheres of influence. In 1895, the U.K. Government established the East African Protectorate and, soon after, opened the fertile highlands to white settlers.

Today, the government of Kenya continues to face huge challenges in tackling poverty, massive unemployment, corruption and poor infrastructure – legacies of misrule in previous regimes. The HIV and AIDS pandemic is a serious threat to nation rebuilding efforts. Kenya also faces periodic droughts.

Politics

Founding president and liberation struggle icon Jomo KENYATTA led Kenya from independence in 1963 until his death in 1978, when Vice President Daniel Arap MOI took power in a constitutional succession. The country was a de facto one-party state from 1969 until 1982, after which time the ruling Kenya African National Union (KANU) changed the constitution to make itself the sole legal party in Kenya. MOI acceded to internal and external pressure for political liberalization in late 1991. The ethnically fractured opposition failed to dislodge KANU from power in elections in 1992 and 1997, which were marred by violence and fraud. President MOI stepped down in December 2002 following fair and peaceful elections. Mwai KIBAKI, running as the candidate of the multiethnic, united opposition group, the National Rainbow Coalition (NARC), defeated KANU candidate Uhuru KENYATTA, the son of founding president Jomo KENYATTA, and assumed the presidency following a campaign centered on an anticorruption platform.

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KIBAKI’s reelection in December 2007 brought charges of vote rigging from Orange Democratic Movement (ODM) candidate Raila ODINGA and unleashed two months of violence in which approximately 1,100 people died. African Union-sponsored mediation led by former UN Secretary General Kofi ANNAN in late February 2008 resulted in a power-sharing accord bringing ODINGA into the government in the restored position of prime minister. The power sharing accord included a broad reform agenda, the centerpiece of which was constitutional reform. In August 2010, Kenyans overwhelmingly adopted a new constitution in a national referendum. The new constitution introduced additional checks and balances to executive power and devolved power and resources to 47 newly created counties. It also eliminated the position of prime minister. Uhuru KENYATTA won the first presidential election under the new constitution in March 2013, and was sworn into office the following month; he began a second term in November 2017 following a contentious, repeat election.

Health and welfare

Together with improved housing, education, sanitation, and nutrition, health care programs have drastically reduced mortality rates from preindependence levels, especially for infants. Despite significant gains in promoting awareness of health and wellness in Kenya, preventable diseases remain a serious issue. High rates of malaria, gastroenteritis, diarrhea and dysentery, trachoma, amebiasis, and schistosomiasis continue. Malaria is one of the country’s biggest problems, with 6.7 million new cases and 4,000 deaths each year, particularly among children under 5.

While access to quality health care is a constitutional right, millions of Kenyans cannot afford to pay for health services at public or private clinics. Even with public health insurance available since 1966, only 20% of Kenyans have access to some sort of medical coverage.

In the devolved government, the Kenya Health Policy 2014 – 2030 provides guidance to the health sector in terms of identifying and outlining the requisite activities in achieving the government’s health goals.

Kenya’s health care system is structured in a step-wise manner so that complicated cases are referred to a higher level. Gaps in the system are filled by private and church run units.

• Dispensaries and private clinics
• Health centres
• Sub-district hospitals and nursing homes
• District hospital and private hospitals
• Provincial hospital
• National hospital

Besides affordable housing, manufacturing, and creation of food security, health care is also one of the Government’s big four agendas. The quality and availability of healthcare in Kenya varies tremendously, depending on location, choice of hospital, and need for treatment. In general, though, expats will find the standard of healthcare throughout Kenya to be below par. Foreigners are advised to look at private healthcare options and to look into the speciality areas of each hospital.

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Kenya’s allocation to the health sector has been increasing every fiscal year, rising for instance from about Sh5.2 billion in 2001/02 to Sh34.4 billion in 2008/09. Health systems in Kenya. While, the country’s public spending on health was 1.8 per cent of GDP in 2011, equivalent to US$36 per capita. In the most recent survey conducted between 1997 and 2011, there were 18 doctors, and 79 nurses and midwives per 100,000 people. Kenya allocated around Sh60.9 billion for healthcare services, compared to Sh60.3 billion in 2016/17.

For the 2020/2012 budget, Kenya has allocated 111.7 billion KES (€916 million, $1 billion) out of a total budget of 2.75 trillion KES. Following the outbreak and the wide spread of Corona Virus Globally, and with the reported cases of the Corona Virus disease (COVID-19) in Kenya, The Government of Kenya has instituted a series of responses to curb the spread of the virus. In lieu of this, the Kenya Healthcare Federation (Voice of the Private Health Sector) has constituted a 24hr response team, KHF COVID19 Response Team.

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Kenya’s water and sanitation crisis

With a population of 50 million, 40 percent of Kenyans rely on unimproved water sources, such as ponds, shallow wells and rivers, while 70 percent of Kenyans lack access to basic sanitation solutions.

Tourism

The country’s history dates to the Stone Age, making Kenya one of the countries in the world that possesses the largest and most complete record of man’s cultural development. This is partly because of the country’s rich variety of environmental factors conducive to human survival and development.

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While wildlife remains the lodestone, Kenya also offers awesome Indian Ocean beaches, world-class mountain trekking, surprisingly good nightlife, an eclectic cultural heritage and interesting ways to get around (from ancient sailing craft to a spanking brand new railway line).

In Kenya, conservation is a cornerstone of the economy. Kenya is a country of diverse, rich habitat. The humid broadleaf forests along the coast of the Indian Ocean give way to lush grasslands and savannas. The Kenya Lake System of the geologically dramatic Great Rift Valley is a UNESCO World Heritage Site.

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Kenya is the original safari destination and remains one of the best places in Africa to see wild animals. Its bevy of iconic game reserves include the Maasai Mara, Amboseli National Park and both East and West Tsavo. Every year, millions of wildebeest and zebra migrate across the Tanzanian border into southern Kenya on the annual Great Migration – one of nature’s most spectacular events.

Kenya’s second largest city and biggest port, Mombasa is a multicultural tourist magnet. British, Portuguese, Arab, Indian, and Asian immigrants add to the rich cultural mix, and their influence is evident in the architecture, as well as the many different types of cuisine.

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Kenya’s western provinces, marked by lakes and rivers, are forested, while a small portion of the north is desert and semidesert. The country’s diverse wildlife and panoramic geography draw large numbers of European and North American visitors, and tourism is an important contributor to Kenya’s economy.

The country enacted strict legislation regulating the sale and consumption of alcohol and cigarettes. Penalties for possessing banned wildlife items under Kenya’s Wildlife Act include large fines and severe penalties, including life imprisonment. Violations of the Kenya Firearms Act are punishable from one year to life imprisonment.

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Kenya visa applications are automatically approved by the Kenyan Government after screening. At times the system becomes congested due to high volumes of applications, and this can cause some applications to be excluded in the batch approvals.

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Care must be taken especially when traveling after dark anywhere in Kenya due to crime. Violent crime, such as armed carjacking, mugging, home invasion, and kidnapping, can occur at any time. Local police are willing but often lack the capability to respond effectively to serious criminal incidents and terrorist attacks.

Economy

The Republic of Kenya is one of the most developed and economically robust nations in Africa. Kenya’s economy is the biggest in East and Central Africa. Increased investments in infrastructure, coupled with a strong macro-economic environment, seems to have helped Kenya beat Ethiopia.

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The economy of Kenya is a market-based economy with a liberalised external trade system and a few state enterprises. Major industries include agriculture, forestry, fishing, mining, manufacturing, energy, tourism and financial services.

Kenya’s stagnant economy and political problems during the 1980s and 1990s led to an outpouring of Kenyan students and professionals seeking permanent opportunities in the West and southern Africa.

The Kenya economy has been growing each year since 1990, with the exception of 2000. in 2005 and 2006 economic growth figures reached a top of 5.7% and 6.1%, respectively. The unrest following the contested 2007 presidential elections has again threatened to derail the progress in Kenya.

Kenya’s diversified economy has produced 5-6 percent annual GDP growth over the last decade, and an increasing number of American companies have established their regional or Africa-wide headquarters in Nairobi. Since 2014, Kenya has been ranked as a lower middle income country because its per capita GDP crossed a World Bank threshold.

In 2018 Kenya was the number 71 economy in the world in terms of GDP (constant 2011 international USD), the number 103 in total exports, the number 79 in total imports, and the number 83 most complex economy according to the Economic Complexity Index (ECI).In 2018, Kenya exported $6.63B and imported $19.7B, resulting in a negative trade balance of -$13B.

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Real GDP grew by an estimated 5.9% in 2019, driven by household consumption and investment on the demand side and services on the supply side (such as public administration, information technology, finance and insurance, and transport and storage. In 2019, Kenya had an estimated GDP of $99.246 billion and per capita GDP of $2,010 making it the 62nd largest economy in the world. As of 2020, Kenya had the third largest economy in Sub-Saharan Africa, coming behind Nigeria and South Africa.

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The economy is likely to take a massive hit following the Covid-19 in the country. Economic activity is heavily weighed down by a combination of supply and demand, the worst case scenario could see growth shrink to one per cent. The economy has further deteriorated in the second quarter as confinement measures to slow the spread of Covid-19 are constraining domestic activity, while lockdowns abroad are depressing tourism revenues and remittance inflows. For Kenya, a two per cent of GDP stimulus programme is around Sh200 billion. The Sh53.7 billion unveiled by the President is 0.5 per cent of GDP, so the plan is underwhelming.

Kenya’s economic response seems to borrow from Keynesian economics, but with a little tweak. Instead of just increasing government expenditure, the government also wants to stimulate consumers to continue spending by increasing their disposable income.

Small businesses in Kenya are challenged by the lack of essential business support services, especially financial services. Two-thirds of Kenyans do not have access to basic financial services such as banking accounts.

Although Kenya’s economy is projected to grow at 6.1 per cent this year, analysts are already painting a picture of grim prospects. Increased layoffs due to a depressed private sector, profit warnings by listed firms as well as high rates of unemployment, all dampen the county’s economic prospects.

Kenya has made significant political, structural and economic reforms that have largely driven sustained economic growth, social development and political gains over the past decade.
Kenya continues to try to improve its business environment but still lags in some areas. The government is the largest formal-sector employer. The nonsalary cost of employing a worker is low.

However, its key development challenges still include poverty, inequality, climate change, continued weak private sector investment and the vulnerability of the economy to internal and external shocks.

Kenya’s recent political reform stemmed from the passage of a new constitution in 2010 that introduced a bicameral legislative house, devolved county government, a constitutionally tenured Judiciary and electoral body. The first election was in 2013. The August 8, 2017 presidential elections were nullified on September 1, 2017 by the Supreme Court, and a new presidential election was held on October 17, 2017. Kenyan President Uhuru Kenyatta was sworn in for a second and final five-year term on November 28, 2017.

Devolution remains the biggest gain from the August 2010 constitution, which ushered in a new political and economic governance system. It is transformative and has promoted greater investments at the grassroots, strengthened accountability and public service delivery at local levels.

While economic activity faltered following the 2008 global economic recession, growth resumed in the last five years reaching 5.7% in 2019 placing Kenya as one of the fastest growing economies in Sub-Saharan Africa. The recent economic expansion has been boosted by a stable macroeconomic environment, positive investor confidence and a resilient services sector.

Looking ahead, medium-term gross domestic product growth (GDP) is expected to rise to 5.9% in 2020 and 6.0% in 2020 underpinned by private consumption, a pick-up in industrial activity and still strong performance in the services sector. Inflation is expected to remain within the government’s target range while the current account deficit is projected to remain manageable. Growth will also be driven by ongoing key investment to support implementation of the Big 4 development agenda and improved business sentiment. Growth could have been stronger in the absence of interest rate caps that continue to derail recovery in private credit growth.

In addition to aligning fostering economic development through the country’s development agenda to the long-term development plan; Vision 2030, the President in December outlined the “Big Four” development priority areas for his final term as President. The Big Four will prioritize manufacturing, universal healthcare, affordable housing and food security. Social Development

Kenya has met some Millennium Development Goals (MDGs)  targets, including reduced child mortality, near universal primary school enrolment, and narrowed gender gaps in education. Interventions and increased spending on health and education are paying dividends. While the healthcare system has faced challenges recently, devolved health care and free maternal health care at all public health facilities will improve health care outcomes and develop a more equitable health care system.

Kenya has the potential to be one of Africa’s success stories from its growing youthful population, a dynamic private sector, highly skilled workforce, improved infrastructure, a new constitution, and its pivotal role in East Africa. Addressing the challenges of poverty, inequality, governance, the skills gap between market requirements and the education curriculum, climate change, low investment and low firm productivity to achieve rapid, sustained growth rates that will transform lives of ordinary citizens, will be a major goal for Kenya.

Agriculture

Kenya Agriculture sector is the highest contributor of Kenya gross domestic product; any investment in agriculture in Kenya starts with profits. The agriculture sector continues to play a vital role in the rural economy. The sector was one of the first to fully devolve the function of service provision to the county governments underscoring the importance of County Governments’ role in ensuring food security.

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The major agricultural products in Kenya include tea, coffee, horticulture, corn, wheat, sugarcane, dairy products, beef, pork, poultry, and eggs. Tea production, which netted US$520 million in 1998, is Kenya’s largest single foreign exchange earner. Coffee and horticulture are the other major agricultural export foreign exchange earners.

Although less than 8% of the land is used for crop and feed production. Less than 20% of the land is suitable for cultivation, of which only 12% is classified as high potential (adequate rainfall) agricultural land and about 8% is medium potential land.