Description

Kenya displays significant potential for economic growth due to its strategic location in East Africa. Even though Kenya’s growth has been slower than that of the African region, its Vision 2030 strategy is expected to enable its growth to World Bank’s second rung of countries with highest gross national income. Two out of three Kenyans are estimated to have access to the Internet, which is higher than the African regional average of 18%, making ICT one of the rising sectors in the country. Opportunities to grow exist in the services sector. Its business, telecommunication, tourism and finance sectors have prospered over the last year. The increase in private consumption will enable the services sector to contribute more to the GDP in the future. Infrastructural developments in the transport and energy sectors, favorable business climate and growth of renewable energy sector are expected to spur GDP growth in the long term. While imports have been steady, the trade deficit has been affected by imports from East Asia into the East African market. The trade deficit is expected to continue despite expected growth through exploration of oil reserves and completion of infrastructural projects. While refined petroleum is a major source of energy in the country, Kenya’s recent discovery of oil in the Turkana region is expected to reduce its dependence on imported petroleum products and narrow the country’s trade deficit in the long term. Continual increase in private consumption and public infrastructural investments have aided in spurring economic growth in the country, exceeding the average among sub-Saharan African region over the previous eight years. In addition to making it an ideal investment destination, mega infrastructure projects planned for the future are expected to boost economic growth and position the country as a major economic hub in the Eastern African region in the medium term. While FDI decreased in 2016, the country has recorded the fastest increase in FDI across diverse domains such as real estate, renewable and geothermal energy, rail and roadways. Kenya’s improved ranking of 92 in Ease of Doing Business for 2017 is expected to help it attract more foreign investment, aided by its strong links through various trade agreements with countries in Europe, the Caribbean Basin, APAC, as well as other third-world countries. The country’s strategic location in East Africa, proposed infrastructure developments, move towards renewable energy, increase in private consumption and growth of eCommerce will propel Kenya in its economic growth and establish it as one of the key countries in the region.