Economic situation Sound economic basis

Kenya generates around 40 per cent of East Africa's economic output. And the country is the most important business partner in the region for German companies. Compared with other African states, Kenya has a sound economic basis.

An employee checks an assembly line on which tetrapacks of fruit juice are being conveyed.

An employee checks an assembly line on which tetrapacks of fruit juice are being conveyed.

An employee checks an assembly line on which tetrapacks of fruit juice are being conveyed.

The country has a dynamic private sector and its dependence on commodity exports is comparatively small. Furthermore, it has a growing middle class and an increasingly productive agricultural sector. In recent years, the country's economy has shown annual growth of between five and six per cent. In 2020, GDP growth slumped to around one per cent because of the COVID-19 crisis. However, the World Bank expects that Kenya's gross domestic product will again grow by five to six per cent over the next few years.

The key role of agriculture

Agriculture is the most employment-intensive and the second-largest sector of the economy, providing a living for some 50 to 60 per cent of the working population. And it accounts for 34 per cent of GDP. Tea, coffee and cut flowers are the country's main exports. Also very important in economic terms is the services sector – in particular the IT sector and tourism –, which in 2019 generated 43 per cent of the country's GDP.

On the other hand, the challenges facing Kenya include a high level of public debt and of indebtedness to external creditors such as China; frequent misappropriation of public funds; high rates of unemployment; infrastructural deficits and its dependence on imports. And Kenya's manufacturing sector cannot compete with that of low-wage countries, in particular those in Asia.

East African Community

Kenya is a founding member of, as well as a driving force behind, the East African Community (EAC) – to which Tanzania, Uganda, Rwanda, Burundi and South Sudan also belong. Since 2010, these six countries have maintained a common market, with free movement of goods and people for the over 180 million inhabitants living within their borders. The EAC's long-term goal is political union, with a common currency, along the lines of the EU.