Economic situation Sound economic basis
Compared with other African countries, Kenya has a sound economic basis. It 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 experienced annual growth of between five and six per cent. Following the downturn (minus 0.3 per cent) in 2020 caused by the COVID-19 crisis, 2021 saw a marked upturn again, with growth back at 7.5 per cent. The World Bank expects growth rates of about five per cent for 2023 and 2024.
Challenges include a high level of public debt in combination with heavy dependency on external creditors like China. Germany has offered Kenya a debt swap. Negotiations about the cancellation of debt for the benefit of a climate programme are currently under way.
Key role of agriculture
Agriculture is the most employment-intensive sector of the economy, providing a living for some 50 to 60 per cent of the working population. The country's main exports include tea, coffee and cut flowers. The services sector also plays an important role in the economy – especially IT and tourism.
Fund offers micro loans
The new government of President William Ruto has announced that one focus of its work will be the creation of new jobs. During his election campaign, Ruto had put great emphasis on promising support for poor people. One visible step has been the creation of a fund that gives informal sector workers access to the formal lending system for the first time. According to estimates, over 80 per cent of Kenya's workforce is employed in the informal sector.
The new fund has a capital stock of about 400 million dollars. It provides short-term micro loans for which people can apply in an uncomplicated way using their mobile phones. By early February 2023, as many as 18.4 million Kenyans had taken out loans worth about 127 million US dollars. Nearly 62 million US dollars has already been paid back.
East African Community
Kenya is a founding member of, and a driving force behind, the East African Community (EAC) – the other members being Tanzania, Uganda, Rwanda, Burundi, South Sudan, and the Democratic Republic of the Congo. In 2022, Kenya chaired the EAC and worked hard to advance the accession of the DR Congo and to make progress on economic integration. Since 2010, the EAC member 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.
As at: 02/05/2023