Kenya Economics and Business

According to cheeroutdoor, Kenya is an African country located in the eastern part of the continent. The economy is largely reliant on services, with tourism and banking being two of its most important industries. Agriculture also plays a major role in the economy, as it accounts for a large percentage of Kenya’s GDP and employs a significant portion of its population. In recent years, the government has implemented various economic reforms to stimulate growth and to attract foreign investment. These efforts have helped to diversify the country’s economy away from traditional sectors such as agriculture and towards more modern sectors such as IT and manufacturing.


Agriculture is the main employment and source of income for the majority of the population, but the service industry and the manufacturing industry are also important. The country’s economic growth from independence to the late 1970s was one of Africa’s highest. In the years 1970–78, average GDP growth was more than 5 percent per year; the industrial sector grew by more than 10 percent per year during the 1970s.

Kenya GDP (Nominal, $USD) 2003-2017

However, in the early 1980s, the economy began to face problems in the form of falling export prices and rising import prices, which led to problems with the balance of payments and reduced foreign exchange reserves. A slight upturn was noted in 1983, but a severe drought in 1984 led to a continued decline. During the 1990s, growth could not keep pace with population growth, and living standards were falling for many Kenyans. During the late 1990s, the country had problems with increasing budget deficits, declining tourism and falling agricultural exports. Widespread corruption and recurring banking crises have caused several of the country’s most important donors to stop payments on several occasions.

The new government that took office in 2002 deregulated the economy and growth reversed again. Political unrest in 2008 had severe but relatively short-term consequences for both agriculture and tourism. A socio-economic reform program supported by the IMF was adopted in 2011.


Although there is a lack of good agricultural land and only 7 percent of the total area is classified as highly productive, agriculture dominates the country’s economy. In addition to plantations and remaining large farms, which were established during the colonial period, the sector is characterized by a large number of agricultural households with areas less than 2 ha. More than half of agricultural production is for self-sufficiency.

During the 1970s, agricultural growth did not keep pace with population growth, but with the exception of the dry years of 1983 and 1984, that was the case during the 1980s. The beginning of the 1990s was characterized by low growth due to drought. The country has subsequently been hit by several dry periods (1996–97, 2000 and 2011) and flood disasters (1998), which has caused major problems for agriculture. Kenya has been forced to import large quantities of food during periods.

The main crop crops are coffee, tea and cut flowers, which are the most important export crops, as well as sugar, maize, wheat, sisal, pyrethrum, tobacco and cotton. Coffee production reached a peak in 1988 of 125,000 tonnes, but production has fallen due to falling world market prices. However, the decline in coffee production has been offset by a sharp increase in tea production, and Kenya is one of the world’s largest exporters of black tea. The country is also one of the world’s largest producers of sisal and pyrethrum. The main food crop is corn. Livestock management is important both for domestic consumption and for export.


Large parts of Kenya’s former forest holdings have been cleared to provide room for agriculture. The total forest area is estimated to be approximately 162,000 ha (about 3 percent of the country’s total area). Due to increasing forest harvesting, soil degradation has become a major problem. The state is therefore trying to encourage replanting to counteract further soil erosion and to meet the country’s timber needs. Since 1999, there has been a ban on logging of plantation forest, but a number of large forest companies have been exempted.


Most of the country’s fishing is freshwater fishing and is conducted in Lake Victoria and Lake Turkana. Fishing is an important supplement in the diet, but traditional consumption patterns limit demand. Lake Turkana is considered to have Africa’s largest yet untapped potential for freshwater fishing.


Mineral extraction in Kenya is limited. However, fluvial deposits in the Kerio River valley have been utilized since 1975. Soda is extracted from Lake Magadis in the Rift Valley. Kenya has relatively large deposits of rubies, and since 1974 jewelry rubies have been extracted from these. Exploration for chrome, nickel and copper, among others, is ongoing in the Central Province and in the valley of the Kerio River. Oil exploration, especially in coastal areas, has not yet produced any results.


Most of the country’s energy needs are covered by hydroelectric power stations, five in the Tana River and one in the Turkwelf River, a geothermal power plant at Olkaria in the Rift Valley and an oil power plant on the coast. Plans are under way for an expansion of the geothermal power plant in the Rift Valley.


Although Kenya is the most developed country in East Africa, the industry’s share of GDP is relatively modest. The sector has previously been largely focused on import substitution, but during the 1990s the export industry began to prioritize. The most important industrial sectors are oil refining, food production and processing of agricultural products, composition of cars, chemical production, printing, textile and sewing industry, cement production, electrical industry and rubber industry. About half of the country’s industry is foreign-owned, and in turn, British companies own about half.

Foreign trade

Since the late 1980s, tourism has been the main source of income for foreign currency. Abbreviated as KEN by,Kenya has a large deficit in trade with countries outside Africa. Exports are dominated by coffee, tea and cut flowers. In order to reduce the dependence on the fluctuating world market prices for agricultural products, the state is trying to stimulate new export products, including fruits and vegetables, handicraft and textile and leather goods. Imports are dominated by mechanical equipment, crude oil, manufacturing and iron and steel. Uganda and Tanzania, with which Kenya has free trade agreements, are the country’s most important export markets. Outside Africa, Pakistan and the United States are important trading partners for exports. The most important importing countries are China, India and the United Arab Emirates.

  • COUNTRYAAH: Find major trading partners of Kenya, including major exports and major imports with latest trade value and market share as well as growth rate.

Tourism and gastronomy

Tourism is the country’s most important source of income for foreign currency and the number of foreign visitors has increased sharply in recent decades; In 2006, the number of foreign tourists amounted to about 1.7 million. The political unrest in 2008 meant a considerable reduction, but the industry has recovered rapidly. Most visitors come from Germany and the UK, but tourists from Asia are growing. The peak season for tourism in Kenya is December – March.

Note: the capital city of Kenya is Nairobi with a population of 4.4 million (2019). Other major cities include Mombasa, Kisumu, Nakuru, Eldoret.

Most of Kenya’s tourists come for national parks. South of Nairobi, Nairobi’s national park with rhinos, hippos, antelopes and ostriches is spreading in unspoilt surroundings, despite the large city skyscrapers gleaming in the background. From Nairobi, the country road can also reach the magnificent landscape of the East African Rift Valley (Great Rift Valley), the large lakes northwest of the capital and the constantly snow-covered Mount Kenya, which can be climbed. Amboseli National Park in southern Kenya is among the most visited, with Kilimanjaro in Tanzania as the fund. Here are elephants but also lions and black rhinos. The Masai Mara Game Reserve is a continuation of the Serengeti National Parkin Tanzania and houses practically every species of animal in Kenya. The largest national park Tsavo, known for its large population of elephants and its unique landscape, lies in the southeast.

The capital of Nairobi is a modern city, with no other historical traces to show than the museum over the railway between the coast and Lake Victoria which was the cause of the city’s emergence as well as memories from Karen Blixen. The National Museum deserves a visit for its interesting exhibition of finds from human history.

Also of great interest is the coast of the Indian Ocean, with the ancient mixed culture and ancient sites of ancient Muslim culture, but also with 400 km of sandy beaches and a crystal clear sea that attracts bathing tourism. The commercial hub of Mombasa (where you can go with the elegant colonial night train from Nairobi) houses the Fort Jesus fortress, built by the Portuguese and now a museum. Another point of interest on the coast is the old commercial town of Lamu with well-preserved Swahili architecture.

Seafood is an important part of the gastronomy of the coastal resorts, but also delicate game dishes (zebra, gazelle, warthog) and beef are characteristic of modern Kenyan cuisine; the Indo-Pakistani business class has ensured that there are also plenty of restaurants with Indian food (mainly in Nairobi). Tropical fruits, fruit juices as well as vegetables and exotic root vegetables are important elements of the food culture, which also offer excellent dairy products.

Traditional Kenyan home cooking is rare in tourist restaurants. It includes stews with potatoes, peas and beans, corn porridge and fried freshwater fish with spicy sauces. Coastal Swahili traditions use coconut for deep frying and flavoring. The coastal area is also an important region for spice cultivation, which is reflected in spicy seasonings, not least of fish dishes. Tea (chai) is consumed in large quantities. Beer is locally sourced, and domestic wines are produced at wineries on Lake Naiva.

Kenya Economics and Business

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