Economic Outlook

Economic Overview

Kenya is the economic, financial, and transport hub of East Africa. Kenya’s real GDP growth has averaged over 5% for the last decade. Since 2014, Kenya has been ranked as a lower middle income country with a Gross Domestic Product in excess of USD 100 billion making it one of the largest non-oil producing economy in Africa.

The Country offers one of the best foreign investment climates in the wider East African region, Over 2015-2019, Kenya’s economic growth averaged 5.7%, making it one of the fastest growing economies in Sub-Saharan Africa. The performance of the economy has been boosted by a stable macroeconomic environment, positive investor confidence and a resilient services sector.

Data from the Kenya National Bureau of Statistics (KNBS) shows that in  2023, the economy sustained the growth momentum that started in 2021, after the recovery from the effects of the COVID-19 pandemic that had significantly slowed down economic activity. 

Kenya’s economy grew by 5.6% in 2023 compared to 4.9% witnessed in 2022. According to the World Bank, Kenya’s economy is expected to grow by 5.2 percent in 2024

Increase in crop and livestock production as a result of improved rainfall, government intervention through the fertilizer subsidy had a positive impact on Kenya’s economic activities . The activities were further boosted by improved earnings from the tourism sector where international visitor arrivals surged by 35.4% to nearly 2.09 million surpassing the pre-Covid levels in 2019. Other sectors that recorded significant growth in 2023 as compared to 2022 include; Transport and Storage, ICT and Real Estate.

However, growth in the construction sector, financial services, Wholesale and Retail trade, education and electricity supply decelerated in 2023 as compared to 2022.

In 2023, agriculture remained the dominant sector, representing 21.8 per cent of the total GDP. Combined, service activities contributed 61.3 per cent of the GDP while industry-related activities comprised 16.9 per cent of the GDP in 2023.

Nominal GDP grew by 12.0 per cent reaching KSh15,108.8 billion in 2023, from KShs 13,489.6 billion in 2022. Gross National Disposable Income increased to KShs 15,882.5 billion in 2023 from KShs 14,051.0 billion in 2022. Additionally, the Gross Domestic Product (GDP) per capita at current prices improved to KShs 293,229 in 2023 from KShs 266,473 in 2022.

The Economy generated 848,200 new jobs with the informal sector generating 85% (720,900) of all the new jobs created in 2023


Market & the Bottom-up Economic Transformation Agenda

Kenya’s economy is market-based, with a few state-owned infrastructure enterprises, and maintains a liberalized external trade system. The country is generally perceived as Eastern and central Africa’s hub for Financial, Communication and Transportation service, with a well-developed social and physical infrastructure.

The government is currently implementing “Vision 2030”, a development agenda that is aimed at transforming the country to a upper middle-income economy by the year 2030.  The vision is being implemented through the Bottom- up Economic Transformation Agenda . Additionally, the present administration has selected five sectors/pillars to focus on in order to ensure that no one is left behind in the pursuit of economic growth. These are:

  • Agricultural Transformation and Inclusive growth
  • Transformation of the Micro, Small and Medium Enterprise (MSME) Economy
  • Housing and Settlement
  • Universal Healthcare;
  • Digital superhighway and Creative Economy .

More importantly, the Government is seeking to leverage technology in public service delivery and roping in youth in the creative industry (Music and arts). 

Other sectors that the Kenyan government is keen of improving include; Infrastructure, manufacturing, services economy, sports, environment and climate change. 

Kenya, is also a strong believer in Regional Integration and enhanced Intra-African trade and continues to advocate for full implementation of the African Continental free Trade Area (AfCFTA) Agreement. Kenya joined eight other African countries in implementation of the guided Trade Initiative under the AfCFTA.

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