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Kenya
POLITICAL AND ECONOMIC DATA
Economic growth driven by public investments and innovative services
If public investments in infrastructure have driven growth in recent years, the Kenyan government is now seeking to develop a local industry, creating jobs, dedicated to covering the needs of its internal market and those of other countries in the Community of East Africa (200 million inhabitants).
With a GDP per capita of USD 1,880, Kenya is classified as a “middle-income country” (the only one in the East African Community). A real middle class is emerging, estimated at 5% of the population nationally and 20% of the population of Nairobi (household income above 750 USD/month). These consumers are accustomed to so-called modern distribution and are hungry for brands, choice and customer service.
Agriculture represents 34% of GDP, tourism 9%, transport 8.5%, trade 7.6% and the manufacturing sector 7.5% of GDP.
The level of development of transport infrastructure, services (particularly financial) but also the health, technology and education sectors make Kenya a true regional platform.
A dynamic investment support policy
In line with the national development program “Vision 2030”, which has enabled the country to double its growth rate since the 2010s, President Uhuru Kenyatta announced 4 strategic sectors, entitled “The Big Four”, which guide his agenda . economic throughout his second mandate, which will end in 2022: 1) the development of social and accessible housing; 2) universal access to health; 3) the revival of the manufacturing sector; 4) food security
A recent Constitution which decentralizes power
Promulgated in 2010, the Constitution decentralizes power to Kenya's 47 counties which are managed by governors and local assemblies, which can pass certain laws and levy taxes.
Perspectives and challenges
- Growing market: 50 million inhabitants and more than 66 million by 2030.
- Strong presence of donors + third world headquarters of the United Nations.
- EU-EAC Economic Partnership Agreement currently blocked.
- Corruption remains important.
- Impact of the Covid-19 crisis.
AGREEMENTS
Kenya has been a member of the East African Community (EAC) since 1967 alongside 5 other countries: Burundi, Uganda, Rwanda, Tanzania, and Sudan. South. In 2004, the EAC adopted the creation of a customs union (of which South Sudan is not a member).
Kenya is also part of the Common Market for Eastern and Southern Africa (COMESA): a free trade zone bringing together 22 countries in Eastern and Southern Africa.
Kenya has been a member of the World Intellectual Property Organization since 1971 and a signatory to the Paris Convention for the Protection of Industrial Property.
An Economic Partnership Agreement (EPA) was concluded in 2016 between the EU and the EAC to liberalize trade between the two areas. However, it has not been implemented to date (Tanzania and Burundi blocking ratification at the EAC level).
PROMISING SECTORS
Agriculture and agri-food industries
- Agricultural machinery (coffee, tea, cut flowers, fruits/vegetables, breeding, irrigation, etc.)
- Breeding (animal feed, genetics)
- Agri-food equipment (processing, packaging)
- Wines/spirits
Technologies and services
- Fintech, financial services and mobile payment
- Retail
- E-commerce
- Cybersecurity and digital trust
- Big data, Blockchain, IoT, AI
Industries and cleantech
- Energy, including renewable energy
- Environment (waste management)
- Water and sanitation
- Sustainable city (mobility, architecture, town planning, energy efficiency, etc.)
- Sea sector and blue economy
- Building & secondary works
- Rail & urban transport
Art of living and health
- Medical devices
- Pharmaceutical products
- E-health
- Care products and cosmetics
- Clothing
BUSINESS ENVIRONMENT
Kenya has once again moved up in the World Bank's 2020 Doing Business business climate rankings. The country ranks 56th in this world ranking which has become a reference, and is in 3rd place among sub-Saharan African countries, behind Mauritius and Rwanda, and ahead of South Africa.
Payments are traditionally made within 90 days. The reference currency for commercial contracts remains the US dollar, however, the euro is increasingly accepted.
Many international calls for tenders are financed or co-financed by donors who cover Kenya (World Bank, African Development Bank, French Development Agency, etc.). These donors provide a guarantee of payments on the projects they finance. They are mainly active in the sectors of infrastructure, transport, energy, water, health, education, etc.
FOREIGN DIRECT INVESTMENTS (FDI)
According to UNCTAD, the amount of inward FDI flows into Kenya amounted to USD 1.6 billion in 2018 (+27% compared to 2017 flows), bringing the total stock of FDI to 14.4 USD billion. In 2018, investments were received in various sectors, including manufacturing, chemicals, hospitality and the petroleum sector.
The country has promoted its export processing zones (SEZs) as attractive destinations for foreign investment in the manufacturing sector: Kenya has 61 special economic zones, 1st in number on the African continent. The tax law of April 2020, adopted to limit the effects of the Covid-19 crisis, however withdraws tax advantages from SEZs.