Overview of Kenya today

The area that now comprises Kenya came under British domination in the 1890s, though it was not declared an official Crown colony until 1920. Under British hegemony (complete domination), a racially stratified economy was created, with European settlers controlling a large segment of the fertile land and managing nascent industries, while the African indigenous population worked as laborers on cash-crop plantations and in factories. Indians, occupying a status somewhere between the Europeans and Africans, formed a petty-capitalist class of artisans, clerks, and merchants. By and large, the colonial economy was characterized by settler control of farming lands (settler-economy), with tea and coffee acting as the major export crops designated for sale in European markets abroad.
Following the emergence of various nationalist movements throughout the 1950s, in addition to a series of rebellions (the Mau Mau) against British rule, Kenya was granted independence in December 1963. Under the subsequent rule of the Kenya African National Union (KANU), headed by President Jomo Kenyatta, Kenya experienced significant economic growth throughout the 1960s. Although KANU, a self-proclaimed African socialist party, pursued various socialistic policies— including government control of agricultural marketing boards, state ownership of certain industries, and import-substitution —the economy under Kenyatta was more or less mixed.
In 1980, a growing balance of payments deficit caused by declining terms of trade (international prices for agricultural commodities greatly outweighed by prices for capital goods ) and high international oil prices, compelled Kenya to borrow heavily from the World Bank. The latter issued a second large-scale loan to Kenya in 1982, with both the first and second loans being subjected to numerous conditionalities (requirements). Such conditionalities centered on increasing the role of the private sector in the economy while concomitantly decreasing the role of the government. In particular, the conditionalities—collectively labeled Structural Adjustment Packages (SAPs)—emphasized trade liberalization and gradual dissolution of government marketing boards that controlled purchasing and selling of agricultural commodities.
Kenya's slow progress towards implementing agricultural conditionalities, in addition to the widespread use of public resources by government and parastatal officials for private gain (corruption), prompted many bilateral donors and the major international financial institutions to severely criticize KANU throughout the early 1990s. Inefficient and corrupt parastatals were singled out as being particularly draining to the country's treasury, and thus a major factor behind deficit and debt problems. Economic performance in the 1990s declined severely, and the average annual GDP growth rate, which stood at 6.5 percent between 1960 to 1980, fell to 2 percent between 1990 to 1999. In August 1993, inflation temporarily reached a record high of 100 percent. Five years later, in 1998, the unemployment rate soared to 50 percent.
Both the IMF and the World Bank suspended structural adjustment programs in 1997, as a result of KANU's failure to implement governance conditionalities designed primarily to curb corruption and promote sound economic policy. In July 2000, however, Kenya signed a long-awaited 3-year Poverty Reduction and Growth Facility (PRGF) with the IMF, a development that is expected to normalize relations with the World Bank and various bilateral donors. The PRGF, a direct relative of the SAPs, sets out some of the most detailed conditions ever agreed to by a national government.
The Kenyan economy continues to be dominated by agriculture, with tea, coffee, horticultural products, and petroleum products acting as the country's major exports. Export partners, in turn, include Uganda, Tanzania, the UK, Egypt, and Germany. Tourism is the second largest contributor to foreign exchange, while agriculture is the first. Kenya's major imports include machinery and transportation equipment, petroleum products, and iron and steel, most of which are imported from the UK, the United Arab Emirates, the United States, Japan, Germany, and India. Due, in large part, to the uneven terms of trade between Kenya's agricultural exports and higher value-added imports, the country runs a significant balance of trade deficit. This means that Kenya must borrow heavily to finance imports, hence the various SAPs. In 1998, Kenya's total external debt stood at US$7 billion. In addition to commercial loans, the country also receives large amounts of economic aid from various international organizations and bilateral donors. In 1997, for instance, Kenya received a total of US$457 million in aid.
A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.2% in 2000. The IMF, which had resumed loans in 2000 to help Kenya through the drought, again halted lending in 2001 when the government failed to institute several anticorruption measures. Despite the return of strong rains in 2001, weak commodity prices, endemic corruption, and low investment limited Kenya's economic growth to 1.2%. Growth lagged at 1.1% in 2002 because of erratic rains, low investor confidence, meager donor support, and political infighting up to the elections. In the key December 2002 elections, Daniel Arap MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation. After some early progress in rooting out corruption and encouraging donor support, the KIBAKI government was rocked by high-level graft scandals in 2005 and 2006. In 2006, the World Bank and IMF delayed loans pending action by the government on corruption. The international financial institutions and donors have since resumed lending, despite little action on the government's part to deal with corruption. Post-election violence in early 2008, coupled with the effects of the global financial crisis on remittance and exports, reduced estimated GDP growth below 2% in 2008 and 2009.
GDP (purchasing power parity):
$63.52 billion (2009 est.)

$62.39 billion (2008 est.)

$61.35 billion (2007 est.)
GDP (official exchange rate):
$30.21 billion (2009 est.)
GDP - real growth rate:
1.8% (2009 est.)

1.7% (2008 est.)

7% (2007 est.)
GDP - per capita (PPP):
$1,600 (2009 est.)

$1,600 (2008 est.)

$1,700 (2007 est.)
GDP - composition by sector:
agriculture: 21.4%
industry: 16.3%
services: 62.3% (2009 est.)
Labor force:
17.47 million (2009 est.)
Labor force - by occupation:
agriculture: 75%
Unemployment rate:
40% (2008 est.)

40% (2001 est.)
Population below poverty line:
50% (2000 est.)
Household income or consumption by percentage share:
lowest 10%: 1.8%
highest 10%: 37.8% (2005)
Distribution of family income - Gini index:
42.5 (2008)

44.9 (1997)
Investment (gross fixed):
21.5% of GDP (2009 est.)
Budget:
revenues: $6.858 billion
expenditures: $8.759 billion (2009 est.)
Public debt:
54.1% of GDP (2009 est.)

60.1% of GDP (2008 est.)
Inflation rate (consumer prices):
20.5% (2009 est.)

26.2% (2008 est.)
Central bank discount rate:
NA% (31 December 2008)
Commercial bank prime lending rate:
14.02% (31 December 2008)

13.34% (31 December 2007)
Stock of money:
$6.068 billion (31 December 2008)

$5.912 billion (31 December 2007)
Stock of quasi money:
$5.468 billion (31 December 2008)

$6.464 billion (31 December 2007)
Stock of domestic credit:
$10.83 billion (31 December 2008)

$10.67 billion (31 December 2007)
Market value of publicly traded shares:
$10.92 billion (31 December 2008)

$13.39 billion (31 December 2007)

$11.38 billion (31 December 2006)
Agriculture - products:
tea, coffee, corn, wheat, sugarcane, fruit, vegetables; dairy products, beef, pork, poultry, eggs

Industries:
small-scale consumer goods (plastic, furniture, batteries, textiles, clothing, soap, cigarettes, flour), agricultural products, horticulture, oil refining; aluminum, steel, lead; cement, commercial ship repair, tourism
Industrial production growth rate:
2% (2009 est.)
Electricity - production:
5.223 billion kWh (2008 est.)
Electricity - consumption:
4.863 billion kWh (2008 est.)


Electricity - exports:
58.3 million kWh (2007 est.)


Electricity - imports:
22.5 million kWh (2007 est.)


Oil - production:
0 bbl/day (2008 est.)


Oil - consumption:
75,000 bbl/day (2008 est.)


Oil - exports:
7,270 bbl/day (2007 est.)


Oil - imports:
80,530 bbl/day (2007 est.)


Oil - proved reserves:
0 bbl (1 January 2009 est.)


Natural gas - production:
0 cu m (2008 est.)


Natural gas - consumption:
0 cu m (2008 est.)


Natural gas - exports:
0 cu m (2008 est.)


Natural gas - imports:
0 cu m (2008 est.)


Natural gas - proved reserves:
0 cu m (1 January 2009 est.)


Current account balance:
$-1.859 billion (2009 est.)

$-1.978 billion (2008 est.)

Exports:
$4.479 billion (2009 est.)

$5.04 billion (2008 est.)

Exports - commodities:
tea, horticultural products, coffee, petroleum products, fish, cement
Exports - partners:
UK 10%, Netherlands 9.2%, Uganda 9%, Tanzania 8.7%, US 6.3%, Pakistan 5.6% (2008)
Imports:
$9.031 billion (2009 est.)

$10.69 billion (2008 est.)

Imports - commodities:
machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastics
Imports - partners:
India 14.1%, UAE 11.5%, China 10%, Saudi Arabia 8%, South Africa 5.7%, Japan 5.1% (2008)
Reserves of foreign exchange and gold:
$2.601 billion (31 December 2009 est.)

$2.879 billion (31 December 2008 est.)

Debt - external:
$7.729 billion (31 December 2009 est.)

$7.855 billion (31 December 2008 est.)

Stock of direct foreign investment - at home:
$2.053 billion (31 December 2009 est.)

$2.541 billion (31 December 2008 est.)

Stock of direct foreign investment - abroad:
$42 million (31 December 2009 est.)

$12.4 million (31 December 2008 est.)

Exchange rates:
Kenyan shillings (KES) per US dollar - 78.042 (2009), 68.358 (2008), 68.309 (2007), 72.101 (2006), 75.554 (2005)