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 2022, 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. However, the magnitude of growth was somewhat subdued by suppressed agricultural production, owing to adverse weather conditions during the year.
The real Gross Domestic Product (GDP) decelerated from a revised growth of 7.6 per cent in 2021 to 4.8 per cent in 2022. On the other hand, the nominal GDP increased from KShs 12,027.7 billion in 2021 to KShs 13,368.3 billion in 2022. Most of the sectors of the economy posted decelerated growths mainly due to the significantly high growths attained in 2021 that signified recovery from the economic downturn in 2020.
During the period under review, all economic activities registered positive growths except Agriculture, Forestry and Fishing, which contracted by 1.6 per cent. Some of the key sectors that supported the growth in 2022 were Transportation and Storage (5.6%), Financial and Insurance (12.8%), Information and Communication (9.9%) and Accommodation and Food service activities (26.2%)
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:
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.