Kenya is the regional hub for trade and finance in East Africa and the natural entry point to the region. The country has a market-based economy with a liberalized foreign trade policy.

Macroeconomic review

Kenya’s economy has been inconsistent since its independence in 1963. During the initial years of independence, the country achieved high economic growth of 6%, which declined to below 4% in the following decades. In the 1990s, Kenya’s GDP also experienced great inconsistency, ranging between negative figures to 4%. After the millennium, Kenya started to produce higher and higher growth rates which peaked in 2007 with 7%. Post-election violence in early 2008, coupled with the effects of the global financial crisis on remittance and exports, reduced GDP growth to 1.7% in 2008, but the economy has rebounded in 2010-11 by showing growth rates higher than 5% and the economic prospects for Kenya for the coming years remain favorable. If the positive trend continous, Kenya is projected to be the first East African country to move from low-income status to middle-income status. Current GDP per capita is in the neighbourhood of $760.

High inflation have been a problem for the past couple of years with inflation as high as 12%, but fiscal consolidation and tight monetary policy have secured a declining inflation, and it is believed that inflation will be brought back to single digits in the near future. Furthermore, the Kenyan Shilling has stabilized following the a significant weakening in mid 2011.

Looking forward, it is believed that sustained efforts to increase exports and invest in transport and energy infrastructure will help accelerate economic growth and strengthen Kenya’s position externally.

East African Community (EAC)

Through the EAC, the member states are hoping to boost regional trade and commerce. The members are; Kenya, Uganda, Tanzania, Rwanda and Burundi. The trade bloc aims to work towards economic policies that are pro-market, pro-private sector and pro-liberalisation. Though significant progress has been made in the bloc’s integration progress, the customs union and the common market are yet to be fully operational.


Kenya is the most industrialised country in East and Central Africa. The main export partners for Kenya include the rest of the East African region as well as the UK, the Netherlands and the US. Main import partners include China, India, United Arab Emirates (UAE) and South Africa.

Agriculture has over the years been the backbone of Kenyas economy and the country has therefore been the source of many agricultural products for export. This industry is well distributed across the country with different regions favouring the growth of various agricultural products depending mostly on climatic conditions. Kenya is especially famous for horticultural products.

Tourism is another main industry in Kenya. Having realised the importance of tourism to the economy, the Kenyan Government has been working extremely hard to further promote tourism to attract tourists and travellers from around the world.

Another major industry in Kenya is the manufacturing industry. Kenya is mostly involved in the export of raw products but is now working towards keeping more of the added-value processes in the country.