ANNEX 2 
KENYA  
  
 EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-171 
 
 
 CONTENTS 
Page 
I. ECONOMIC ENVIRONMENT A2-175 
 (1) M AJOR FEATURES OF THE ECONOMY  A2-175 
 (2) R ECENT ECONOMIC DEVELOPMENTS  A2-177 
 (3) T RADE PERFORMANCE  A2-180 
 (4) I NVESTMENT PERFORMANCE  A2-181 
 (5) O UTLOOK  A2-184 
II. TRADE AND INVESTMENT REGIMES A2-185 
 (1) G ENERAL FRAMEWORK  A2-185 
 (2) T RADE POLICY OBJECTIVES  A2-189 
 (3) T RADE AGREEMENTS  A2-190 
 (4) I NVESTMENT FRAMEWORK  A2-190 
III. TRADE POLICIES AND PRACTICES BY MEASURE A2-193 
 (1) M EASURES DIRECTLY AFFECTING IMPORTS  A2-193 
  (i) Registration and preshipment inspection A2-193   (ii) Customs procedures A2-193 
  (iii) Tariffs and other charges on imports A2-194 
  (iv) Internal taxes A2-195 
  (v) Duty and tax concessions and exemptions A2-196 
  (vi) Rules of origin A2-196   (vii) Prohibitions, controls and licensing A2-197 
  (viii) Contingency measures A2-197 
  (ix) Standards, technical regulations, and other requirements A2-197   (x) Health, sanitary, phytosanitary, and environmental protection measures A2-201 
 (2) M
EASURES DIRECTLY AFFECTING EXPORTS  A2-203 
  (i) Procedures A2-203   (ii) Export taxes A2-204 
  (iii) Export prohibitions, re strictions, and licensing A2-204 
  (iv) Export subsidies and incentives A2-204   (v) Export finance, insurance, and guarantees A2-205 
  (vi) Export promotion and marketing assistance A2-205 
 (3) M
EASURES AFFECTING PRODUCTION AND TRADE  A2-205 
  (i) Incentives A2-205 
  (ii) Competition policy and price controls A2-206 
  (iii) State-trading enterprises, st ate-ownership, and privatization A2-208 
  (iv) Public procurement A2-210 
  (v) Intellectual property rights (IPRs) A2-211 
 WT/TPR/S/271/KEN Trade Policy Review 
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 Page 
IV. TRADE POLICIES BY SECTOR A2-217 
 (1) A GRICULTURE  A2-217 
  (i) Main features A2-217   (ii) Policy developments A2-217 
  (iii) Selected products A2-219 
 (2) M
ANUFACTURING  A2-226 
 (3) M INING , QUARRYING , AND ENERGY  A2-229 
  (i) Mining and Quarrying A2-229 
  (ii) Energy A2-231 
 (4) S ERVICES  A2-235 
  (i) Financial services A2-236 
  (ii) Transport A2-240   (iii) Telecommunications and postal services A2-243 
  (iv) Tourism A2-245 
 REFERENCES   A2-249 
 
APPENDIX TABLES  A2-251 EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-173 
 
 
 CHARTS 
Page 
I. ECONOMIC ENVIRONMENT 
I.1 Composition of merchandise trade, 2005 and 2010 A2-182 
I.2 Direction of merchandise trade, 2005 and 2010 A2-183 
TABLES 
I. ECONOMIC ENVIRONMENT 
I.1 Economic indicators, 2005-11 A2-176 
I.2 Balance of payments, 2005-11 A2-179 
I.3 FDI, 2006-10  A2-184 
II. TRADE AND INVESTMENT REGIMES 
II.1 Selected trade-related laws, June 2012 A2-187 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 Official fees for PVoC A2-199 III.2 Performance of EPZ key indicators:  2006-11 A2-205 
III.3 List of selected state-owned companies A2-209 
III.4 Classification of public entities for procurement procedures A2-211 
III.5 Overview of IPR protection, 2012 A2-212 
III.6 Applications and registrations of patents, industrial designs and utility models, 2006-10 A2-214 
III.7 Registration of Marks A2-214 
 
IV. TRADE POLICIES BY SECTOR  
IV.1 Taxes and levies directly or indirectly affecting tea growers A2-220 
IV.2 Production and consumption of sugar, 2006-10 A2-222 IV.3 Production and sale of livestock and dairy products, 2006-10 A2-224 
IV.4 Fish production, 2006-10 A2-225 
IV.5 Exports of fresh and frozen fish A2-225 IV.6 Forest products, 2006-10 A2-226 
IV.7 Manufacturing production index, 2006-10 A2-227 
IV.8 Quantity and value of mineral exports, 2006-11 A2-229 IV.9 Mining licences, 2011 A2-230 
IV.10 Production, trade and consumption of energy, 2006-10 A2-231 
IV.11 Main sources of electricity generation A2-232 IV.12 Electricity tariff structure in Kenya A2-233 
IV.13 Petroleum supply and demand, 2006-10 A2-234 
IV.14 Transport output, 2006-10 A2-240 
IV.15 Traffic handled at Mombasa port, 2006-10 A2-243 WT/TPR/S/271/KEN Trade Policy Review 
Page A2-174 
  
 APPENDIX TABLES 
Page 
I. ECONOMIC ENVIRONMENT 
AI.1 Structure of imports, 2005-10 A2-253 
AI.2 Structure of exports, including re-exports 2005-10 A2-254 
AI.3 Origin of imports, 2005-10 A2-255 
AI.4 Destination of exports, including re-exports 2005-10 A2-256 
 
II. TRADE AND INVESTMENT REGIMES 
AII.1 Selected notifications to the WTO, 2006-12 A2-257 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 AIII.1 Products subject to excise duties, 2011 A2-259 
AIII.2 Threshold matrix for class A procuring entities A2-262 
AIII.3 Threshold matrix for class B procuring entities A2-263 AIII.4 Threshold matrix for class C procuring entities A2-265 
 
 EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-175 
 
 
 I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. The Republic of Kenya encompasses a landmass of  586,650 square kilometers (8.1% arable) 
on Africa's eastern coast.  Its population was es timated at 43 million in 2012, with an annual 
expansion rate of 2.4%.  Nairobi (3 .1 million people) is the capital and is situated in the most densely 
populated region;  it is also Kenya's main center of commercial activity.  According to the most recent 
census, Kenya's population is relatively young:  42 .2% in the 0-14 range, 51.1% in the 15-64 range 
and 2.7% were 65 or older. 
2. Kenya is a low income country with a GDP per capita at US$862 in 2011 (Table I.1), and 
Human Development Index (HDI) of 0.509 in 2011 (r anking it 143 out of 187 countries).  More than 
40% of Kenyans live below poverty line, on less than US$1.25 a day.  The most vulnerable populations are families and children living in the urba n slums, in the arid lands of northern Kenya, 
and in areas of the country worst affected by HIV.  These are also areas with high child mortality and 
low school enrolment.  
3. Services, including banking, to urism, transport, and communi cations, continue to be the 
largest contributor to GDP, with an estimated shar e of 49.1 % in 2011 (Table I.1).  Agriculture is 
crucial to the overall socio-economic performance, in  terms of its contribution to GDP (21% in 2011), 
foreign exchange earnings, and liv elihood to rural populations (Cha pter IV(1)).  Mining activities 
remain marginal in the economy.  The manufacturing sector, which accounts for about 10% of Kenya's GDP, faces challenges of inadequate raw materials and high costs of production; nevertheless 
it is the most developed in the EAC region.  
4. Kenya is the finance, trade, and transport hub in  East Africa.  With 40% of the region's GDP, 
its economy is the largest among EAC countries.  However, despite its standing among the East 
African countries, Kenya suffers from an important infr astructural deficit.  As a result, transport costs 
amount to 40%-50% of total costs of production.  These higher costs add to the difficulty for local products to compete on international markets.
1  Traditional agricultural techniques and over-reliance 
on weather conditions also hold Kenya's economy in  a vulnerability trap.  Furthermore, erratic 
agriculture production, together with governance i ssues in marketing institutions and infrastructure 
are the main factors undermining Kenya's export performance.2 
5. Kenya accepted the obligations of Article VIII of  the IMF Agreement in February 1994, and 
maintains no exchange rate restriction on current transactions.  Kenya maintains a managed floating 
exchange rate regime with Cent ral Bank of Kenya (CBK) interventions to smooth out unwarranted 
fluctuations of the Kenyan Shilling (K Sh).  The obj ective of monetary policy in Kenya is to maintain 
internal price stability and to provide liqui dity to a market-based financial system. 
                                                      
1 Online information.  Viewed at:  www.africaneconomicoutlook.org. 
2 World Bank (2010).  WT/TPR/S/271/KEN Trade Policy Review 
Page A2-176 
  
 Table I.1 
Economic indicators 2005-11  
2005 2006 2007 2008 2009 2010 2011a 
Nominal GDP (K Sh million) 1,415,724 1,622,4 34 1,833,511 2,111, 173 2,365,453 2, 551,167 3,024,782 
Nominal GDP (US$ million) 18,739 22, 503 27,236 30, 517 30,581 32, 200 34,059 
Real GDP growth rate (%) 5.9 6.3 7.0 1.5 2.6 5.8 4.4 
GDP per capita (current US$) 534 623 732 797 792 836 862 
Gross national savings (% of GDP at 
market prices) 13.4 14.8 13.9 16.0 12.9 11.3 13.2 
Gross domestic savings (% of GDP at 
market prices) 5.7 6.8 6.1 8.4 5.9 5.1 .. 
Gross domestic investments (% of GDP at 
market prices) 16.9 17.9 19.0 19.2 19.6 20.3 20.1 
National accounts (% of GDP) 
Government final consumption 
expenditure .. 17.6 17.9 16.5 15.8 16.6 17.8 
Private final consumption expenditure .. 75.4 75.5 75.0 78.2 77.8 77.7 
Gross fixed capital formation .. 19.1 19.4 19.4 19.1 19.9 20.1 
Changes in inventories .. -1.1 -0.3 -0.2 0.3 -0.6 -0.8 
Gross domestic expenditure .. 110.9 112.4 110.7 113.4 113.8 114.8 
Net exports .. -10.7 -10.9 -14.1 -12.5 -10.3 -16.7 
Exports of goods and services .. 27.1 26.8 27.6 24.2 27.5 28.7 
Imports of goods and services .. 37.8 37.7 41.7 36.6 37.9 45.4 
Discrepancyb .. -0.1 -1.5 3.4 -0.9 -3.4 1.9 
GDP by economic activities at constant 
2001 prices (% of GDP) 
Agriculture and forestry 25.5 25.0 24.0 22.6 21.5 21.7 21.0 
Fishing 0.5 0.5 0.5 0.4 0.4 0.4 0.4 
Mining and quarrying 0.5 0.4 0.5 0.5 0.4 0.5 0.5 
Manufacturing 9.8 9.8 9.8 10.0 9.8 9.7 9.6 
Electricity and water 2.4 2.2 2.2 2.3 2.2 2.3 2.1 
Construction 3.0 3.0 3.0 3.2 3.5 3.5 3.5 
Services 46.9 47.0 47.5 47.8 48.9 48.8 49.1 
Wholesale and retail trade 9.0 9.5 9.9 10.2 10.3 10.5 10.8 
Hotels and restaurants 1.3 1.4 1.6 1.0 1.4 1.3 1.4 
Transport and communication 10.4 10.9 11.7 11.9 12.3 12.4 12.4 
Financial intermediation 3.8 3.8 3.8 3.8 3.9 4.0 4.2 
Real estate, renting, business serv ices 5.6 5.5 5.3 5.4 5.4 5.3 5.3 
Public administration 4.0 3.7 3.4 3.3 3.3 3.2 3.1 
Education 6.2 5.9 5.7 6.0 6.0 5.9 5.9 
Other services 6.6 6.4 6.2 6.3 6.3 6.1 6.1 
FISIM -1.0 -0.9 -0.9 -0.8 -0.9 -0.7 -0.8 
All industries at basic prices 87.7 87.1 86.5 86.1 85.8 86.1 85.4 
Taxes on products 12.3 12.9 13.5 13.9 14.2 13.9 14.6 
Prices and interest rates 
Inflation (CPI, % change) 10.3 14.5 9.8 26.2 9.2 4.0 14.0 
Deposit rate (% per annum) 5.1 5.1 5.2 5.3 6.0 4.6 5.6 
Lending rate (% per annum) 12.9 13.6 13.3 14.0 14.8 14.4 15.0 
Exchange rate  
Exchange rate (K Sh/US$, period average) 75.6 72.1 67.3 69.2 77.4 79.2 88.8 
Real effective exchange rate (Annual 
average; index, 2000=100)c 115.0 124.0 127.0 133.0 133.0 129.0 116.0 
Nominal effective exchange rate (Annual 
average; index, 2000=100)c 91 96 98 94 89 87 77.0 
Table I.1 (cont'd) EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-177 
 
 
 2005 2006 2007 2008 2009 2010 2011a 
Fiscal policy (% of GDP) 
Revenue excl. grants 20.2 19.1 20.3 20.9 20.7 22.6 21.5 
Tax revenue 18.7 17.8 18.9 19.3 19.8 21.1 20.8 
Total expenditure and net lending 21.1 21.9 22.6 31.5 29.3 31.6 33.0 
Fiscal balance including grants 0.4 -1.6 -1.5 -9.3 -6.9 -6.3 -7.5 
Fiscal balance excluding grants -0.9 -2.8 -2.4 -10.6 -8.7 -9.0 -11.5 
Memorandum 
Public debt (US$ billion; end period)d 9.8 10.7 12.0 13.5 13.7 15.0 .. 
Domestic (% of GDP) 23.4 23.2 23.6 21.2 21.7 20.9 20.7 
External (% of GDP) 32.2 27.9 23.1 21.6 21.5 20.7 23.1 
External debt service as % of GDP 1.1 1.0 1.0 1.1 1.0 1.3 1.1 
External debt service as % of exports of 
goods and services 3.9 4.0 3.8 4.2 4.2 3.4 3.8 
Inward FDI stock (% of GDP) 5.9 5.2 7.0 6.6 7.2 7.0 .. 
Outward FDI stock (% of GDP) 0.7 0.7 0.7 0.8 1.0 1.0 .. 
Terms of trade (1982=100) 71.8 72.0 69.6 76.9 82.0 85.0 84.1 
 
.. Not available. 
 a Provisional. 
b Adjustments including differen ce between GDP production approach and GDP expenditure approach. 
c An increase indicates appreciation. d Fiscal year to 30 June.  
Source: Kenya National Bureau of Statistics online inform ation.  Viewed at:  http://www.knbs.or.ke;  KNBS Quarterly 
 GDP Reports,  1st quarter 2011.  Viewed at:  http://www.knbs .or.ke/gdpreports.php;  Central Bank (2011)  Monthly 
 Economic Review,  September ;  Information provide d by the Kenyan authorities;  African Statistical Yearbook 
 2012 ;  IMF IFS database.  Viewed at:  http://elibrary-data. imf.org/;  UNCTAD statistics database.   Viewed at:  
 http://unctadstat.uncta d.org/;  and IMF (2012) Regional Economic Outlook:  Sub-Saharan Africa,   April for REER 
 and NEER. 
(2) RECENT ECONOMIC DEVELOPMENTS  
6. In 2008, Kenya adopted its long-term devel opment blueprint, Vision 2030, covering the 
period 2008 to 2030.  According to the authorities, the Vision aims to transform Kenya into a middle-income country by 2030.  It is being implemente d in successive five-year Medium-Term Plans.  The 
first, covering 2008-12, focuses on creating economic growth and employment as the key to poverty 
reduction.  It also prescribes specific measures to address income disparities among households and 
regions in Kenya, while special consideration is  given to good governance and capacity building. 
7. The performance of Kenya's overall economy was mixed during the review period.  The 
growth momentum was strong in 2005 through 2007,  but a range of external and internal shocks 
interrupted its positive pace in 2008.  However, since 2010, its main economic indicators have 
improved. 
8. Kenya's real GDP growth rate was 7% in 2007, up from 6.3% in 2006.  This was attributed to 
broad-based growth in many economic sectors, s purred by the Economic Recovery Strategy for 
Wealth and Employment Creation (ERS).  The ERS was adopted in 2003 with a view to reversing, 
through improved macroeconomic management, the poor performance of Kenya's main socio-
economic indicators, including high unemployment,  low GDP growth, and high inflation.  
9. Overall GDP growth was supported by agricu lture, manufacturing, and wholesale and retail 
trade, as well as by an increase in investment in, inter alia , road construction, maintenance, and 
rehabilitation activities.  The tourism subsector al so expanded sharply, due to improved marketing WT/TPR/S/271/KEN Trade Policy Review 
Page A2-178 
  
 strategies and campaigns to tap eastern Europe and Asian countries’ potential. Growth in transport 
and communication services was led by increasi ng tourist arrivals and the buoyancy of 
communication services. 
10. In 2008, Kenya's economy underperformed, followi ng three adverse shocks.  First, the global 
economic downturn depressed demand for Kenya’s ma in exports.  Second, the poor rainfalls and 
subsequent drought had a negative impact on the ag ricultural and power sectors, given that 50% of 
national-grid connected power is generated through hydroelectric sources.  Third, the post-election 
unrest adversely affected the economy.  As a result, the GDP growth rate decreased dramatically, to 1.5% and 2.6% in 2008 and 2009, respectively. 
11. The Government undertook several economic m easures to mitigate the impact of these 
shocks.  It implemented an econom ic stimulus programme, by fundi ng public projects in agriculture, 
services, infrastructure, health, and education.  It continues to support the economic activity by facilitating the private sector's access to affordable credit.  The CBK gradually adjusted the Central 
Bank Rate (CBR) from 8.5% in January 2009 to 6% in  July 2010.  In addition, it reduced the Cash 
Reserve Ratio from 5.0% to 4.5% in the first half  of 2009.  These macroeconomic measures, together 
with a recovery in international markets and impr oved rainfall, have helped  the economy to recover, 
with a GDP growth rate of 5.8 % in 2010.  Howe ver, high international oil and food prices have 
affected this new growth momentum, with GDP growth down to 4.4% in 2011. 
12. Under the ERS, the Government pursues prudent fiscal policy.  As a result of sustained tax 
collection, through the modernization of tax admini stration and the broadening of the tax base, which 
was planned to include the informal sector, ta x revenue has increased steadily increased since 2006 
(Table I.1).  Tax revenues averaged about 20% of GDP  over the review period.  This explains to some 
extent Kenya's relatively low dependence on foreign de velopment aid, which is below 6% of the total 
budget.  Government borrowing from the domestic banki ng system has been limited in order to avoid 
its crowding-out effect.  A VAT Bill, which is in the adoption process, is to remove a number of 
ad hoc tax exemptions and zero-rated goods, wh ich have undermined revenue collection and 
complicated VAT administration (Chapter III(1)(iv)). 
13. Efforts have been made to contain the expans ion of total government expenditures, while 
progressively shifting resources from recurrent expend itures to capital expenditures.  These include 
measures to reduce allocations on non-priority act ivities, and formulation of the Public Financial 
Management Bill, which is aimed at improving e fficiency in spending an d enhancing expenditure 
control.  However, recurrent expenditures have c ontinued to make up a large part of government 
expenditures, with an annual average of 70%.  In  the medium-term, the Government is committed to 
reducing the wages bill to 6% of GDP.  In this regard,  the Salaries and Remuneration Commission has 
been established to regulate salary increases and fo r the adoption of a contributory based pension 
system for public servants.  
14. The Monetary Policy Committee (MPC) is th e CBK organ responsible for formulating 
monetary policy.  The Minister in charge of Fina nce, by notice in writing to the Bank, sets the price 
stability targets for the Government .  The CBK aims to maintain inflation rates at around 5% over the 
medium-term, through control of money supply, in li ne with the targeted growth in real GDP. Open-
market operations and cash reserve requirements (CRR) are the main monetary policy instruments. 
15. Over the review period, the Kenyan shilling fluctuated vis-à-vis  the main currencies, with a 
strong appreciation trend between 2007 and 2011 vis-à-vis  the U.S. dollar. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-179 
 
 
 16. The ratio to GDP of total Central Government debt decreased steadily between 2005 (55.6%) 
and 2008 (42.8%);  the same ratio for external de bt also decreased over the same period (from 32.2% 
to 21.6%).  However, these ratios increased in 2010  to 48.1% and 22.2%, respectively.  The external 
debt service as a percentage of exports of goods and services averaged 4% during the review period.  
Kenya has a well-structured public debt managing syst em, which seeks to minimize the cost and risk 
of Kenya's existing public debt portfolio and new borrowings.  Its strategy also envisions building a 
vibrant domestic market for public borrowing.  
17. In May 2009, the IMF Board approved disbur sement of approximately US$200 million under 
its Exogenous Shock Facility (ESF), to help Keny a recover from the negative impact of higher food 
and international fuel and fertilizer costs, and th e slowdown in external demand associated with the 
global financial crisis.  In January 2011, the IMF approved a three-year US$508.7 million 
arrangement for Kenya under the Fund's Extended Credit Facility.3 
18. In general, Kenya's balance of payment (BOP) surplus continued to improve at a steady pace 
during the review period.  This performance resu lted from the expanding surplus in the capital and 
financial account, fuelled by increased investment in flows, and the privatization of a number of public 
enterprises.  An exceptional deficit was observed in 2008, in the wake of the global economic and 
financial crisis, due to an increased deficit of  the current account (from K Sh 69,476 million in 2007 
to 137,148 million in 2008), and a significant reduc tion of the surplus of the capital and financial 
account due to low investment inflows (Table I.2) .  The good performance of Kenya's exports in 
2009, together with a rebound in investments helped move the BOP into surplus. 
Table I.2 
Balance of payments, 2005-11 
 (Million shillings) 
2005 2006 2007 2008 2009 2010 2011a 
Current account -19,063  -34,524 -69,476 - 137,148 -129,240  - 199,232  -296,024 
      Goods -161,651  -234,562 -286,506 -390,784 -383,860  -499,404  -746,052 
           Debit 423,229  488,086 564,680 739,412 734,145  913,376  1,261,738 
           Credit 261,578  253,524 278,174 348,629 350,285  413,972  515,686 
      Services 56,135  76,398 84,805 95,498 82,844  131,509  173,913 
           Debit 85,915  101,053 112,476 129,374 140,149  159,709  190,188 
           Credit 142,050  177,451 197,281 224,872 222,993  291,218  364,100 
           Transportation 23,439  25,321 23,762 29,404 18,683  49,884  60,478 
              Debit 32,206  48,336 52,294 59,478 65,036  73,922  94,086 
              Credit 55,645  73,657 76,056 88,882 83,719  123,806  154,564 
           Foreign travel 34,397  36,749 43,901 33,657 35,830  46,595  64,723 
               Debit 9,359  12,820 17,808 18,375 17,536  16,787  17,507 
               Credit 43,756  49,569 61,709 52,032 53,366  63,382  82,230 
           Other services - private -14,910  -6,106 -5,100 -3,787 -10,904  -9,076  -5,080 
                Debit 30,558  27,869 29,479 37,183 43,044  53,210  62,311 
                Credit 15,648  21,763 24,379 33,396 32,140  44,134  57,231 
          Government services, 
           n.e.s. 13,209  20,434 22,242 36,224 39,235  44,106  53,791 
                Debit 13,792  12,028 12,895 14,338 14,533  15,790  16,284 
                Credit 27,001  32,462 35,137 50,562 53,768  59,896  70,075 
      Income -8,194  -5,053 -9,706 -3,127 -2,926  -12,493  619 
           Debit 13,730  12,221 20,518 15,317 16,426  23,121  25,091 
           Credit 5,536  7,168 10,812 12,190 13,500  10,628  25,710 
Table I.2 (cont'd)
                                                      
3 IMF (2011). WT/TPR/S/271/KEN Trade Policy Review 
Page A2-180 
  
 2005 2006 2007 2008 2009 2010 2011a 
      Current transfers 94,647  128,69 3 141,931 161,265 174,70 2  181,156  275,496 
           Debit 5,028  3,452 2,722 6,092 6,405  6,496  4,121 
           Credit 99,675  132,145 144,653 167,356 181,107  187,652  279,617 
Capital & financial account 57,863  63,780 150,090 83,197 200,031  187,406  289,640 
   Capital account 7,807  12,142 10,558 6,535 20,178  19,030  20,861 
     Debit 0  0 0 0 0  0  0 
     Credit 7,807  12,142 10,558 6,535 20,178  19,030  20,861 
    Direct investment 871  1,927 46,652 3,585 5,436  14,596  28,936 
        Debit 732  1,727 2,426 3,028 3,557  125  838 
        Credit 1,603  3,654 49,078 6,612 8,993  14,721  29,774 
     Portfolio investment -2,301  -1,488 -1,664 -1,805 -1,615  -1,397  -5,094 
         Debit 3,466  1,702 1,717 2,486 1,831  4,054  7,210 
          Credit 1,165  214 53 681 216  2,657  2,116 
     Other investment (net) 51,486  51,199 94,544 74,882 176,032  155,177  244,937 
       Long term 555  1,035 44,270 49,127 88,902  59,815  87,782 
          Debit 22,298  18,713 26,743 34,349 26,744  34,971  49,929 
          Credit 22,853  19,748 71,013 83,476 115,646  94,786  137,711 
        Short term 50,931  50,164 50,274 25,755 87,130  95,362  157,156 
           Debit 8,839  13,034 19,262 38,960 -42,442  -7,590  60,061 
           Credit 59,770  63,198 69,536 64,714 44,688  87,772  217,217 
Errors and omissions -17,637  15,190 -17,364 20,788 4,389  24,051  28,225 
Overall balance 21,163  44,446 63,250 -33,163 75,180  12,225  12,841 
Reserve assets -21,162  -44,447 -63,250 33,162 -75,180  -12,225  -12,841 
Special drawing rights (net) 0  0 0 0 0  0  0 
Reserve position in the fund 
(net) 115  -73 -68 32 -34  20  5 
Foreign exchange (net) -21,257  -44,368 -63,161 33,127 -75,122  -12,302  -21,826 
Other claims (net) -20  -6 -21 3 -24  57  -20 
Indicators (%) 
Balance of goods/GDP -11.4  -14.5 -15.6 -18.5 -16.2  -19.6  -24.7 
Current account balance/GDP -1.3  -2.1 -3.8 -6.5 -5.5  -7.8  -9.8 
Overall balance/GDP 1.5  2.7 3.4 -1.6 3.2  0.5  0.4 
 
a Provisional. 
 
Source: Central Bank of Kenya Balance of Payments Statistics.  Viewed at:  http://www.centralbank.go.ke/Publications/ 
 default.aspx;  and information pr ovided by the Kenyan authorities. 
(3) TRADE PERFORMANCE  
19. Kenya's current account deficit, as a share of GDP, deteriorated considerably between 2006 
and 2011 (from 2.1% to 9.8%)  The rise in the im port bill was largely on account of increased imports 
of oil, machinery, and transport and telecommunica tion equipment, reflecting increased infrastructure 
development (Table I.2).  
20. Trade in goods and services averaged 64% of the GDP between 2006 and 2010, of which the 
larger part was attributed to imports (over 37% on average).  Kenya's sh are in total world trade 
remained low, at an average of 0.05% over the same period. 
21. The value of imports grew markedly between 2005 and 2010, from US$5.8 billion to 
US$12 billion, with a large share attributed to ma nufactures (over 60% of import value on average).  
The broad composition of imports also remained  mainly unchanged.  However, the share of 
agricultural products increased from 11.2% to 13.6% , influenced by increasing food products, and 
share of manufactured products declined, from 64.3% to 62.7% (Chart I.1 and Table AI.1). EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-181 
 
 
 22. Kenya's main exports are agricultural products , whose share in total exports expanded 
significantly between 2005 and 2010 (Chart I.1 and Table AI.2).  Tea, coffee, and horticultural 
products are the main agricultural exports.  Fuel  exports, which represented some 18.3% of total 
exports in 2005, dropped markedly during the period to 4.2%. 
23. Asia provides some 42% of Kenya's total impor ts, and remains the main source of Kenya's 
imports, with China and India leading the way.  Eu rope is also a significant source of imports, with 
20.6% of total imports (18.6% for EU countries) (C hart I.2 and Table AI.3).  Kenya's imports from 
Africa remain low, and South Africa is its main supp lier on the continent.  The share of the U.S. in 
Kenya's imports decreased signifi cantly over the review period. 
24. Africa remains the main export market for Ke nya.  The leading African markets include 
Uganda, Tanzania, Sudan and Egypt (Chart I.2 and Table AI.4).  EU accounts for 24.8% of Kenya's 
export markets.  In general, Kenya's principal e xport markets are those to which it has preferential 
access:  Uganda and Tanzania under the EAC, EU  in the framework of the Interim Economic 
Partnership Agreement, and Egypt under COMESA. 
25. Kenya's trade in services has been growing since 2006, and continued to register a net surplus 
over the review period.  Tourism remains the cornerst one in services trade, by fuelling performance in 
transportation and foreign travel.  However, the services surplus dropped in 2009 (K Sh 82,844 
million) relative to 2008 (K Sh 95,498 million) as a consequence of internal and external shocks 
(Table I.2). 
(4) INVESTMENT PERFORMANCE  
26. Kenya's foreign direct investment (FDI) perfo rmance remains weak in  comparison with its 
neighbouring countries.  Poor infrastructure and co mplex administrative procedures remain the main 
challenges.  According to the World Bank, Kenya ranks 109th (106th in 2011) out of 183 economies for ease of doing business.  Starting a business in Kenya requires an average of 33 days and 11 different administrative procedures.
4 
27. During the review period, due to privatizati on processes and new investment in mobile phone 
companies, Kenya received significant FDI flows.  The 2007 upsurge, which amounted to 
US$729 million (Table I.3), was attributed to the en try of a new mobile telephone operator and the 
privatization of Telkom Kenya.  
28. Australia, China, Germany, India, and the United Kingdom are the main sources of FDI. 
                                                      
4 World Bank (2012).  WT/TPR/S/271/KEN Trade Policy Review 
Page A2-182 
  
 Chart I.1
Composition of merchandise trade, 2005 and 2010
2005 2010
(a)    Exports, including re-exports (f.o.b.)
Other mining
1.9
Manufactures
31.8Other mining 
2.0
Other 
agricultural 
raw material
3.0Chemicals
9.0Machinery and 
transport 
equipment  
5.1Other semi-
manuf.
7.0
Other 
manufactures 
9.9
Other food 
24.4Cut flowers and 
foliage
7.7Fuels 4.2Iron and steel
3.0
Total:   US$3.4 billion Total:  US$5.2 billion
(b)    Imports (c.i.f.)
Chemicals
14.4Manufactures
64.3
Electrical
machines
5.8Non-electrical 
machinery    
6.8Other manfactures
8.7
Other mining
1.5Fuels
22.9Automotive 
products
6.5Other transport 
equipment
11.6
Food
9.5
Agricultural raw 
material
1.7Iron and steel
4.8
Non-electrical
machinery 
8.6Automotive 
products
6.5
Electrical
machines
10.3Iron and steel 4.5
Food
12.1
Agricultural 
raw material
1.6Other  
0.1Other semi-manuf.   
6.7Other transport 
equip.  
6.3
Chemicals
13.3Manufactures
62.7
Total:   US$5.8 billion Total:   US$12.1 billion Per cent
Manufactures
33.9
Tea
22.5Fuels
18.3
Other  0.1Other food
21.1Other  2.3
Agriculture 
57.6
Source :  UNSD, Comtrade database (SITC Rev.3).Mining
23.6Other semi-manuf.
5.7Agriculture  
47.6
Agriculture
13.6Agriculture
11.2
Mining
24.4Chemicals 
8.4
Other  0.3
Other 
manufactures 
6.5
Other mining
1.5Fuels
22.1Other agricultural 
raw material
2.8Machinery and 
transport 
equipment  
2.9Other semi-
manuf.
5.5
Other 
manufactures 
11.5
Tea
16.6
Cut flowers and 
foliage
7.2Iron and steel
3.6
 EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-183 
 
 
 Chart I.2
Direction of merchandise  trade, 2005 and 2010
2005 2010
(a)    Exports, including re-exports (f.o.b.)
Asia  
11.4United 
States  
5.5
Uganda
12.7Other Africa
20.7Middle East 
7.4Asia
12.6
Other Europe
0.9Pakistan
4.4Other Asia
8.2Other America
0.4
Total:   US$3.4 billion Total:  US$5.2 billion
(b)    Imports (c.i.f.)
Japan 5.2
EU(27)
21.0 Europe  
22.8
Middle 
East 24.4Other Middle East 
10.2China 5.2
South Africa
9.7Other 
Europe
1.8
Other Africa 
4.5United States
9.6Other
1.4
EU(27)
18.6
Europe
20.6 Asia
42.0Other America 1.7
India 10.8Japan 6.1
Africa 
12.0 South Africa
6.2
Other Africa  
5.7Middle 
East 
17.6
U.A.E. 12.1 Other Middle East 
5.5United States
4.1Other
2.1
Total:   US$5.8 billion Total:   US$12.1 billionPer cent
United States
6.7
Uganda
16.6
Other Asia  
12.6United Republic of 
Tanzania
8.1
Source :  UNSD, Comtrade database (SITC Rev.3).Other Europe
2.0EU(27)
23.9
Asia
25.5EU(27)
24.5
Africa 46.7
Sudan
4.6
India 5.6
U.A.E. 14.2United Republic 
of Tanzania
7.7
Africa 
14.2Other   
3.0Other 
5.8
Africa 46.1
Other Asia 
9.5
China 12.6Other 
America 2.1Sudan 2.6Europe
25.4Middle East 3.5
Europe
24.8
Other Africa
19.8 Other Europe
0.9Pakistan
5.4Other Asia
5.9Other America
0.5
 WT/TPR/S/271/KEN Trade Policy Review 
Page A2-184 
  
 Table I.3 
FDI, 2006-10 
(US$ million)  
Type 2006 2007 2008 2009 2010 
Stocks      
Inward 1,164 1,893 1,989 2,129 2,262 
Outward 163 199 243 289 306 
Flows      
Inflows 51 729 96 141 133 
Outflows 24 36 44 46 18 
 
Source : UNCTADSTAT. 
29. Kenya is actively involved in making cross-border investment, mainly in Africa.  Kenya's 
main investments have been in the banking sector, re tail stores, cement industry, and marketing.  EAC 
countries are the main destinations for Kenyan i nvestments, but Kenya also invests in Ethiopia, 
Zambia, Democratic Republic of Congo, Mo zambique, and South Africa For example. 
30. A Kenyan oil marketing company, Kenol Kob il has established presence in the Democratic 
Republic of Congo, Zambia, and Mozambique, and Ke nyan wholesale and retail supermarket chains 
(Nakumatt and Uchumi) have established presence in E ast Africa.  In banking, two of its leading 
commercial banks, Equity Bank and Kenya Commerc ial Bank (KCB), have established presence in 
Eastern Africa, including EAC countries. 
(5) OUTLOOK  
31. The prospects for Kenya's economic performance remain promising.  A combination of 
certain designated factors could help to consolidate the positive outlook in the short- to medium-term.  
Reforms undertaken by the Government in all economic sectors since the adoption of a new 
constitution are expected to strengthen investor  confidence and create a more conducive business 
environment.  Continued government investment in infrastructure is to reduce costs of doing business.  
Efforts to deepen regional integration at EAC leve l, by harmonizing trade and investment policies and 
practices, as well as removing all trade barriers will cr eate a larger market for the private sector.  In 
addition, business-friendly macroeconom ic management will keep inflati on and interest rates low, to 
expand production activities.  In a favourable scenar io, Kenya's economy is forecast to grow by an 
average of nearly 6% between 2012 and 2014.5 
32. Kenya's economic performance may be unde rmined by its high reliance on rain-fed 
agricultural outputs.  This vulnerability to climat ic conditions may be addressed by diversifying its 
economy and undertaking massive investments in reliable irrigation systems.  Another risk facing Kenya's positive economic prospects lies in the 2012 elections;  any socio-political unrest would 
certainly undermine the performance of Kenya' s most dynamic sectors, including tourism and 
agriculture. 
33. According to the authorities, annual GDP growth is expected to be 5.5 % in 2013; and the 
positive trend to continue in 2014 a nd 2015 (with expected annual GDP growth of 5.9% and 6.3%).  
This performance is to be bolstered by continued expansion in agriculture, tourism, construction, 
transport and communication, and ICT, while expo rts will continue to benefit from the relatively 
strong growth in the subregion 
                                                      
5 IMF (2012). EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-185 
 
 
 II. TRADE AND INVESTMENT REGIMES 
(1) GENERAL FRAMEWORK6 
34. Since Kenya's last Trade Policy Review, the st ructure of its legal framework has changed 
significantly.7  On 27 August 2010, the Republic of Ke nya passed its new Constitution replacing the 
Constitution in force since Independence in 1963.8  The Constitution is the supreme law of the land 
and binds all persons and all State organs.  Theref ore, any law, including customary law, that is 
inconsistent with the Constitution, is void, to the exte nt of such inconsistency, and any act or omission 
in contravention of the Constitution is invalid. 
35. The Constitution introduces a two-tier level of  legal and administrative frameworks, the 
national and county levels.  These tw o levels are distinct but inter-dependant, and must conduct their 
mutual relations on the basis of consultation a nd cooperation.  The func tional and institutional 
integrity, as well as the Constitutional status, and ins titutions, of each level, must be respected.  This 
new approach to government, i.e. devolution, aims at promoting democratic and accountable exercise 
of power;  giving power of self-governance to the people;  recognizing the right of communities to manage their own affairs;  furthering their deve lopment;  and ensuring equitable sharing of national 
and local resources throughout Kenya.
9 
36. According to Article 6 (1) of the Constitution, the territory of Kenya is divided into various 
counties as specified in the First Schedule.10  County governments are set up in Article 176 to consist 
of a county assembly and a county executive.  Ev ery county government shall decentralize its 
functions and the provision of its services to the ex tent that is efficient and practicable to do so.11 
37. The Executive is set up in Chapter Nine (Artic le 130) of the Constitution.  Its composition 
shall reflect the regional and ethnic diversity of th e people of Kenya and its Cabinet shall consist of 
the President, Deputy President, Attorney General,  and not fewer than 14 and not more than 22 
Cabinet Secretaries.  The President is Head of State and Government, and Commander-in-Chief of the 
Kenya Defence Forces.  According to Article 142 (2 ), a person shall not hold office as President for 
more than two terms.12 
38. Legislative power is vested in Parliament, which is established under Article 93(1).  It 
consists of the National Assembly and the Sena te.  The National Assembly is representative of 
Kenya's constituencies and special interests, and delib erates on, and resolves, issues of concern to the 
people.  The Senate represents the counties and serves to protect their interests.  It participates in the 
law-making function of Parliament, by consid ering, debating and approving Bills concerning 
counties.  It also determines allocati on of national revenues among counties, etc. 
                                                      
6 Section based on the Constitution of Kenya 2010.  Viewed at:  http://www.parliament.go.ke/index. 
php?option=com_content&view=article&id=83&Itemid=79. 
7 See WT/TPR/S/171/Rev.1 (2006). 
8 Kenya Gazette , Special Issue. 
9 See Chapter 11, Article 174, of the Constitution. 
10 These include Mombasa, Kwale, Kilifi, Tana River, Lamu, Taita/T aveta, Garissa, Wajir, Mandera, 
Marsabit, Isiolo, Meru, Tharaka-N ithi, Embu, Kitui, Machakos, Makueni, Nyadarua, Nyeri, Kirinyaga, 
Murang'a, Kiambu, Turkana, West Pokot, Samburu, Trans Nzoia, Uasin Gishu, Elgeyo/Marakwet, Nandi, 
Baringo, Laikipia,, Nakuru, Narok, Kajiado, Kericho, Bomet, Kakamega,Vihiga, Bungoma, Busia, Siaya, 
Kisumu, Homa Bay, Migori, Kisii, Nyamira, Nairobi city. 
11 See Article 176 (2), Constitution of Kenya, 2010. 
12 According to information provided by the Kenyan  authorities, a President is electable once for a 
maximum of ten years. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-186 
  
 39. Chapter 10 of the Kenyan Constitution deals with  the establishment and the hierarchy of the 
Judiciary.  It is headed by the Chief Justice, who is appointed by the President on recommendation 
from the Judicial Service Commission, subject to  approval by the National Assembly.  The Chief 
Justice is assisted by a Deputy Chief Justice and other judges.  Judicial authority is to be exercised by 
the courts and tribunals established by or under the Constitution.  The Judiciary has Superior courts 
such as the Supreme court, Court of Appeal, High C ourt, and subordinate courts, such as magistrates 
courts, Kadhis courts, Courts Martia l and any other courts and local tribunals as may be established as 
per Article 162(2).13  The Judiciary also has a commercial court section. 
40. The Constitution incorporates the general rules of international law as forming part of the law 
of Kenya.  Similarly, Article 2(6) of the Cons titution incorporates into la w any treaty or convention 
ratified by Kenya.  According to Article 132 (5) th e President is obligated to ensure that Kenya's 
international obligations are fulfilled through the actions  of the relevant Cabinet Secretaries.  Treaties 
and international agreements have to be adopted through domestic laws and in the event of conflict, 
the national law prevails over the treaty/international agreement.  The hierarchy of the laws in Kenya 
is:  the Constitution;  acts of Kenyan Parliament;  specific Acts of Parliament of the United Kingdom 
cited in Part I of the Schedule to the Judicature Ac t;  subsidiary/delegated/subordinate legislation;  
English statutes of general application, in force in England on the 12 August 1897;  the substance of 
common law in force on the 12 August 1897;  judicial precedents;  the doctrine of equity in force in 
England on the 12 August 1897;  procedures and Practic es observed by courts of Justice in England 
on 12 August 1897;  African customary law;  a nd other recognized sources of law including Hindu 
Law and Islamic Law. 
41. The Government executes its functions through ministries, which are charged with sector 
portfolios, and formulate policies in their areas of responsibility.  The Ministry of Trade (MOT) 
remains the main body in the formulation, implementa tion, and coordination of Kenya's trade policies.  
According to Presidential Circular No. 1/2008 of 30  May 2008, on organization of the Government of 
the Republic of Kenya, the Minist ry has been mandated to execute the following functions:  trade 
policy development, promotion of retail and whol esale markets, development of micro and small 
business, fair trade practices and consumer protectio n, private-sector development and international 
trade affairs (such as EAC, COMESA, and WTO).14 
42. The Ministry executes some of its mandate th rough: Kenya Institute of Business Training 
(KIBT), Business Premises Rent Tribunal (BPRT), Export Processing Zones Authority (EPZA), 
Export Promotion Council (EPC), Kenya Nationa l Trading Corporation (KNTC), Kenya Wine 
Agencies Limited (KWAL) and Industrial and Comme rcial Development Corporation (ICDC).  In 
execution of its mandate, the MOT collaborates with  other line ministries such as agriculture, 
planning, finance, environment and mineral resources, energy. 
43. In general, policies are formulated and implem ented by means of laws.  As a result of the 
2010 Constitution, Kenya is undergoing a major law reform and amendment process.15 
                                                      
13 Other variations of the High Court hear disput es related to employment and labour relations, 
environment, use and occupation of and title to la nd.  See Article 162 (2), Constitution of Kenya. 
14 See Ministry of Trade online information.   Viewed at:  http://www.trade.go.ke/. 
15 Kenya Law Reform Commission, "Constitution Implementation Status, 27th August 2010 to 
27th August 2011".  Viewed at:  h ttp://www.klrc.go.ke/.images/stories/klrc -report-on-status-of-implementation-
18th-august-2011.pdf;  Implementation status according to the Kenya Law Reform Commission.  Viewed at:  
http://www.klrc.go.ke/.images/stories/klrc-report-on-s tatus-of-implementation-18th-august-2011.pdf;  and 
additional information provided by the Kenyan authorities. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-187 
 
 
 Table II.1 
Selected trade-related laws, June 2012 
Area Law 
Trade in services EAC Common Market Protocol, 2010 
Customs EAC Customs Union Protocol, 2005 
 EAC Customs Management Act, 2004, revised 2009 
 Customs and Excise Act (Cap. 472), revised edition 2010 
Import/Export control The Stamp Duty Act (Cap. 480) as ame nded by the Statute Law (Miscellaneous 
Amendments) Act of 2009 
 Sale of Goods Act, (Cap 31), 2003 
 Trade Disputes Act (Cap. 234), 1991 
 Price Control (Essential Goods) 2011 
 Trading in prohibited goods (Cap 519) 1967 
 Weights and Measures Act, (Cap 513) 1993 
 Trade Descriptions Act, (Cap 505) 1980 
Licensing of businesses Registration of Business Names (Cap. 499) 
 Licensing Laws (Repeals and Amendments) Act, 2006 
 Transfer of Businesses (Cap 500) 
 Business Premises Rent Tribunal Act (Cap 301) 
 Aliens Restriction Act, Repealed by 12 of 2011 
 Companies Act (Cap. 486), 2009 
 Factories Act and other places of work (Cap. 514), Repealed by A 15  of 2007 Act 
 Bankruptcy Act (Cap. 53), 1982 
Taxation Income Tax Act (Cap. 470), 1993, 2010 
 Value Added Tax Act (Cap. 476), 2004 
 Stamp Duty Act, 1982 
Exchange rate Exchange Control (Repealed) Act, 1994 
Sanitary and phytosa nitary measures Pest Control Products Act, 1985 
 Meat Control Act, (Cap 356) 
 Fertilizers and Animal Foodstuffs Act, (Cap 345) 
 Animal Disease Act (Cap 364) 
 Plant Protection Act (Cap 324) 
 Public Health Act (Cap. 242) 
 Food, Drugs, and Chemical Substances Act (Cap. 254) 1992 
Pharmacy and Poisons Act, (Cap 244) Veterinary Surgeons and Veterinary Pa raprofessionals Act, Number 29 of 2011 
Biosafety Act, Number 9 of 2009 Fisheries Act, (Cap 378) 
Standards Standards Act (Cap. 496) 1981 
Foreign investment Investment Promotion Act (Cap 485B) 2005 
 Foreign Investments Protection (Cap. 518), 2010 
 Housing Act, 1990;  revised 2010 
 Land Acquisition Act, 1983;  revised 2010 
 Investment Disputes Convention, 1967 
 Partnership Act (Cap. 29) revised 2010  
 Arbitration (Amendment) Act No.11 of 2009 
Privatization Privatization Act, 2005:  revised 2009 
Export processing zones Export Processing Zone's Act (Amendment) (Cap. 517), 1993 
Government procurement Local Government Act, 1998 revised 2010  
 Sale of Goods Act, 2003 
 Government Contracts Act, 1979 revised 2010 
 Architects and Quantity Surveyors Act, 1978 
  
 Public Procurement and Disposal  of Public Assets Act, 2005 
Table II.1 (cont'd)WT/TPR/S/271/KEN Trade Policy Review 
Page A2-188 
  
 Area Law 
Intellectual property rights Industrial Property Act, 2001 
 Anti-Counterfeit Act, 2008 
 Seeds and Plant Varieties Act (Cap. 326), 1991 
 Trade Marks Act, (Cap. 506) 2002 
 Science and Technology Act (Cap. 250), 1977 
 Trade Description Act (Cap. 505), 1980 revised 2010 
 Copyright Act, 2001 revised 2009 
Competition Competition Act Cap 12 of 2010 (Cap. 504) 
 Arbitration (Amendment ) Act No.11 of 2009 Act, 1985 
Agriculture and related activities The Agriculture Act, (Cap. 318) 
 Agricultural Produce (Export) Act (Cap. 319) 
 Agricultural Produce Marketing (Cap. 320) 
 Tea Act (Cap. 343) 1991 
 Sugar Act, (Cap 342) 
 Fisheries Act, (Cap 278) 1988 revised 1991 
Pyrethrum Amendment Act 2011 Sisal Industry Act (Cap 341) 1991 
 Coffee Act,(Cap 333) 
 Forests Act, Number 7 of 2005 
 The Tobacco Control Act,No.8 of 2007 as am ended by the Statute Law (Miscellaneous 
Amendments) Act of 2009 
 Coconut Industry (Cap. 331) 1983 
Coconut Preservation Act (Cap 332) 1983 
 The Pest Control Products Act (Cap.346) as  amended by the Statute Law (Miscellaneous 
Amendments) Act of 2009 
 The Animal Diseases Act (Cap. 364) 1989 
 Kenya Meat Commission Act (Cap 363) 1990 
 The Hide Skin and Leather Trade Act (Cap 359) 
Crop Production and Livestock Act, (Cap 321) Dairy Industry Act, (Cap 336) 
Financial services Banking Act (Cap. 488), 2002 revised 2010 
The Insurance Reinsurance Act (Cap 487A) 1997 
 Finance Act, 2012 
 Insurance Act, 1984 revised 2010 
 Central Bank of Kenya Act (Cap 491),1984 2010 
 Retirement and Benefit Authority Act, No. 3 of 1997 revised 2009 
Capital Markets Act (2000) Central Depositories Act (2000) 
Energy The Energy Act, 2006 (No.12 of 2006), as amended by the Statute Law (Miscellaneous 
Amendments) Act of 2009 
 Electric Power Act, No. 11 of 1997 
Mining Mining Act (Cap 306), 1940 
 Petroleum (Exploration and Production) (Cap. 308) 
Trading in Unwrought Precious Metals (Cap 309) 1988 revised 2008 Diamond Industry Protection Cap 310 1991 Gold Mines Development Loans (Cap 311) 1986 Continental Shelf (Cap 312) 1977 repealed A6/89 
Water Water Act 2002 
Transport Merchant Shipping Act (Cap. 389), 2009 
 Kenya Roads Board Act, 2000 
 Kenya Airport Authority Act (Cap 395), 1992 
 Civil Aviation (Amendment) Act, 2002 
 Kenya Ports Authority Act (Cap 391) 
Postal, information, and communication 
services Kenya Information and Communications Act, (Cap 411A) 
Table II.1 (cont'd)EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-189 
 
 
 Area Law 
Tourism The Tourism Act 2011 
 Wildlife Conservation and Management Act, 1989 
Environment The Environmental Management and Co-ordination Act, 1999 (No.8 of 1999) as 
amended by the Statute Law (Miscel laneous Amendments) Act of 2009 
Other important laws Local Government Act, (Cap 265) (and its By-laws) 
 
Source: Kenya Law Reports.  Viewed at:  ht tp://www.kenyalaw.org/klr/index.php. 
(2) TRADE POLICY OBJECTIVES  
44. Kenya's Vision 2030 is the new development blue print covering the period 2008 to 2030.  It 
aims at making Kenya a newly industrializing, “mi ddle income country providing high-quality life for 
all its citizens by the year 2030”.  The Vision wa s developed through an a ll-inclusive stakeholder 
consultative process, including with the National Committee on WTO (NCWTO).16  The economic 
pillar of the Vision aims to maintain sustaine d economic growth of 10% over the 10 years from 
2008.17  This Vision’s programme followed after the successful implementation of the Economic 
Recovery Strategy for Wealth and Employment Creation (ERS), under which the country’s economy 
moved back into growth from 2002, when GDP grew at  0.6%;  this is expected to rise to 5.4% in 
2012.18 
45. As an element of Kenya's overall economic  policy, its 2011 National Trade Policy (NTP)19 is 
to play a key role by contributing to the developm ent of a competitive and globally efficient economy.  
To this end, the NTP set forth two broad objectiv es:  to pursue more open, competitive, and export-
oriented policies that are compatible with the country’s national developm ent objectives;  and to 
create an enabling environment for trade and inv estment to thrive.  The NTP aims to use a 
comprehensive, coherent, and integrated appro ach to achieving these objectives by:  setting and re-
defining government policy relating to internatio nal and domestic trade;  designing appropriate 
complementary measures to improve the business regulatory and macroeconomic environment;  
increasing investment in infrastructure to support trade development;  improving trade facilitation in order to enhance efficiency and delivery of g oods and services in both domestic and international 
markets;  improving coordination of institutions r esponsible for promoting and regulating trade;  and 
ensuring effective participation of key stakeholders  (members of Parliament, government ministries, 
private sector, civil society, and development partners, among others). 
46. The MOT's priorities, through the NTP, incl ude expanding and dive rsifying domestic and 
export trade, enhancing support for trade facilita tion, promotion of e-trade, expanding and 
strengthening public-private partnerships, establis hing a trade and investment information-sharing 
system, providing entrepreneurial skills for micro,  small, and medium-size enterprises (MSMEs), 
supporting the improvement of the business and inv estment climate, formulating an appropriate 
trade-remedy regime, developing an appropriate ne gotiating structure and an integrated database on 
trade in goods and services, and aggressively promoting trade in services.
20 
                                                      
16 This Committee meets periodically to review issu es pertaining to the multilateral trading system. 
17 http://www.planning.go.ke. 
18 Economist Intelligence Unit, March 2012.  Viewed  at:  http://www.eiu.com/report_dl.asp?issue_id= 
218848406&mode=pdf. 
19 NTP bill 2011 is finalized and awaiting Cabinet and Parliament approval. 
20 Kenya National Trade Policy 2009.  Online information.  Viewed a t:  http://www.eac.int/trade/index. 
php?option=com_docman&task=cat_view&gid=43&Itemid=124. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-190 
  
 47. The sectors identified as offering export opportunitie s to Kenya are:  tea, coffee, horticulture, 
livestock and livestock products, fish and fish produc ts, food and beverages, textiles and clothing, and 
commercial crafts.  The challenge is for the G overnment to create an enabling environment for 
investment in the manufacturing sector, to undertake value-addition of these primary products as well 
as production of other manufactures, so as to tap inte rnational markets.  Tourism and other services 
sectors such as transport, ICT, and the promotion of  e-enabled services are also considered important 
for export.  In this context, the importance of developing domestic regulatory frameworks as well as 
an enabling legislation, especially for e-commerce and other back-office operations, is seen as critical 
in allowing Kenya to diversify into higher value services. 
(3) TRADE AGREEMENTS  
48. Kenya is an active Member in the WTO DDA negotiations as well as in the organization's 
regular work;  Kenya submitted several notificat ions to the WTO during the review period 
(Table AII.1).  Kenya aligns its DDA negotiation po sitions with those taken by the African and ACP 
groups, as well as other groups depending on the issu es at hand.  In 2011, Kenya coordinated the 
African group, and was (and remains) focal point  for Africa on negotiations on non-agricultural 
market access, and for the ACP on services and agriculture. 
49. Kenya is a founding member of the EAC, the Inter-Governmental Authority on Development 
(IGAD), the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC), and the Common Market for Eastern and Southern Africa (COMES A).  Kenya has also initialled an Economic 
Partnership Agreement (EPA) with the EU and contin ues to engage in these negotiations.  As part of 
the EAC it is currently negotiating the EAC-COME SA-SADC Tripartite FTA.  Kenya benefits from 
the U.S. AGOA and the GSP schemes of some de veloped partners, notab ly Canada, EU, Japan, 
Norway, Switzerland, and the United States.  It  also participates in the U.S-EAC Trade and 
Investment Framework Agreement. 
(4) I
NVESTMENT FRAMEWORK  
50. The Kenyan Constitution provides for a guarantee against expropriation of private property. 
Expropriation may only occur for security reasons or public interest, upon which fair and prompt 
compensation is guaranteed.21 
51. Kenya's institutional and legislative framewo rk governing investment is set out in the 
Investment Promotion Act (IPA) of 2004.22  Its aims are to promote and facilitate investment by 
assisting investors in obtaining the licences necessar y to invest, and providing other assistance and 
incentives for related purposes.  A foreign investor is  defined as a natural person that is not a Kenyan 
citizen;  a partnership in which the controlling in terest is owned by persons that are non-Kenyan 
citizens;  or a company or other body-corporate incorporated under the laws of a country other than Kenya.
23  Part 11(3.2) of the IPA requires that a forei gn investor intending to invest in Kenya applies 
for an investment certificate.  Foreign investors are required to  have an amount of at least 
US$500,000, or the equivalent in any transactable cu rrency.  In practice, foreign investors with 
US$100,000 are also welcomed. 
                                                      
21 See Article 40 (2) and (3), Constitution. 
22 The IPA was passed by Parliament and assented to by the President in December 2004.  It was 
published in the Kenya Gazette  on 3 January 2005. 
23 See Article 2, IPA. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-191 
 
 
 52. Investments are only allowed if they are beneficial  to Kenya.  In order to determine the latter, 
the Kenya Investment Authority (KenInvest) considers the extent to which such investment or activity 
will contribute to employment creation, acquisition of  new skills or technology,  and to tax revenues or 
other government revenues.24  There are procedures in the event of dissatisfaction with a decision 
related to an application for an investment certificate.   A review Panel is appointed by the Minister of 
Finance and may confirm, vary, or set-aside a decisi on, direct that KenInvest reconsider its decision, 
or make an order as to payment of costs. 
53. An investment certificate allows the hol der a legal entitlement to certain licences.25  A 
certificate holder is also entitled to three entry work  permits for management and technical staff as 
well as three others for owners, sh areholders, partners, and dependants.   Both are for an initial, but 
renewable, two-year period.  Capital repatriati on and remittance of dividends and interests are 
guaranteed to foreign investors under the IPA. 
54. Areas under state monopoly or exclusive ri ghts are not open to private investment 
(Chapter IV).  Investments that may adversely a ffect security, health, or the environment require 
approval from the competent authorities, such as th e National Environmental Management Authority, 
and the Public Health Authorities, before approvals are granted.26  Investments are highly regulated 
in, inter alia  forest products, mining, energy, and petroleum products. 
55. The Ministry of Finance oversees investment po licy in Kenya.  KenInvest, under the auspices 
of the Ministry of Finance, was established in October 2005 with a mandate to promote and facilitate 
investment by, inter alia :  issuing investment certificates;  assisting investors in obtaining licences, 
permits, incentives, and exemptions;  providing information on investment opportunities and sources 
of capital;  and advising the authorities on improving the investment environment.  KenInvest has a 
digital one-stop shop for pro cessing investment applications. 
56. According to KenInvest, there are 12 easy steps to  investing in Kenya:  obtaining approval for 
the company name from the Registrar of Companie s;  stamping the Memorandum and Articles and a 
statement of the nominal capital;  paying stamp duty at a bank;  Declaration of compliance 
(Form 208), which is signed before a Commissioner of  Oaths or Notary Public;  filing of deed and 
details with the Registrar of Companies at the Atto rney General's Chambers in Nairobi;  registering 
with the Tax Department for a personal identification number (PIN);  registering with the VAT office;  
applying for a business permit;  registering with  the National Social Security Fund (NSSF);  
registering with the National Hospital Insurance Fund (NHIF);  registering for PAYE;  and making a 
company seal after a certificate of incorporation has been issued.27 
57. Other important economic institu tions on investment in Kenya are:  the Central Bank of 
Kenya (CBK), which, inter alia , provides opportunities for investment in treasury bills28;  and the 
Export Processing Zones Authority (EPZA), which provides investors with tax incentives, a 
                                                      
24 Other conditions that may be considered include whether such investment contributes to technology 
transfer, increases foreign exchange;  either through exports or import substitution, uses domestic raw materials, 
supplies, and services;  will adopt value-addition in the processing of local, natural and agricultural resources;  
and will utilize, promote, develop, and implement ICT an d any other factors the Authority considers beneficial 
to Kenya. 
25 General licences to which a holder of an investment certificate may be entitled are listed in the 
Second Schedule to the IPA. 
26 Information provided by the Kenyan authorities. 
27 Viewed at:  http://www.investmentkenya.com/. 
28 Viewed at:  http://www.centralbank.g o.ke/securities/bills/introduction.aspx. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-192 
  
 facilitating operating environment, good physical in frastructure, and day-to-day support by EPZA 
staff.29  Incentives are provided to investors under various schemes such as the SEZ, EPZ, 
manufacturing under bond, etc. (see Chapter III(2), (3) and (4)).  The Capital Markets Authority 
(CMA) provides an important alternative source  of long-term finance for long-term productive 
investments30, and the Nairobi Securities Exchange (N SE) lists investment markets for public 
purchase in several sectors, including in agriculture, commercial, services, industrial, allied, finance, 
and investment.31 
58. Kenya is a member of the Multilateral Investme nt Guarantee Agency (MIGA);  the Africa 
Trade Insurance Agency (ATIA), which insures i nvestors against non-commercial risks;  and the 
International Centre for Settlement of Investment Disputes (ICSID). 
59. Kenya has signed bilateral treaties for the pr omotion and protection of FDI with China, 
France, Finland, Germany, Iran, Italy, Libya,  Mauritius, the Netherlands, Switzerland, and the 
United Kingdom.  It has concluded bilateral doubl e taxation treaties with:  Austria, Bangladesh, 
Belgium, Canada, China, Denmark, France, German y, Greece, India, Indonesia, Iran, Ireland, Japan, 
Mauritius, the Netherlands, Norway, South Afri ca, Sweden, Thailand, the United Kingdom, and 
Zambia. 
                                                      
29 Viewed at:  http://www.epzakenya.com/. 
30 Viewed at:  http://www.cma.or.ke/. 
31 Viewed at:  http://www.nse.co.ke/. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-193 
 
 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration and preshipment inspection 
60. Trade activities, including imports, are open to bot h Kenyans and foreigners.  The repeal of 
the Imports, Exports and Essential Supplies Act and the Trade Licensing Act have simplified 
registration procedures.32 The documents required for importa tion of goods include a personal 
identification number (PIN), from the Domestic Ta xes Department of the Kenya Revenue Authority 
(KRA);  and an import declaration form (IDF), which costs 2.25% of c.i.f. value or K Sh 5000, whichever is higher. 
61. Since 2005, the Kenyan Bureau of Standards (KEBS) has established a system of pre-export 
verification of conformity (PVoC) to Kenyan technical regulations or approved equivalents 
(section ix).
33  The conformity assessment programme is carried out by verification bodies appointed 
through tendering.  As of 18 January 2012, Bureau  Veritas, Intertek International, and Société 
Générale de Surveillance (SGS) were appointed to carry out PVoC procedures on a list of 2,463 tariff 
lines, including textile, chemical, food, and el ectrical products imported to Kenya market 
(section (iii)). KEBS may undertake a surveillance a udit to check the effec tiveness of the appointed 
bodies. 
(ii) Customs procedures 
62. Kenya Revenue Authority (KRA) is  responsible for customs proc edures, as well as collection, 
accounting, and administration of all government ta xes, including customs and excise duties and VAT 
on imports. 
63. Since its last Review, Kenya has embarked on a wide range of trade facilitation reforms, 
geared towards improving its global competitivene ss.  In this respect, in 2005, KRA brought into 
operation the Simba electronic system, to process customs declarations.  In general, the documents required for customs declaration are:   the supplier's invoice, the packing list, the bill of lading, the 
PVoC certificate of conformity, the import declara tion form (IDF), the single entry document (C17B), 
the insurance debit note, and the declaration of customs value form (C36).  The customs authority 
may request the importer to provide additional s upporting documents.  According to the World Bank, 
Kenya ranks 141st out of 183 economies in term of ease of trade across border; and an average of 
24 days are necessary for overall import procedures (11 days for documents preparation, three days for customs clearance and technical control, six days for port and terminal handling, and four days for 
inland transportation).
34 
64. According to the authorities the mean clearance  time (time difference between arrival and 
release of imported goods) improved from 10 days in  2007 to 8 days and nine hours in 2011.  
However, the customs clearance system in Kenya does not provide for information exchange among 
all border control agencies, and this continues to  pose challenges to the timely release of imported 
goods. 
                                                      
32 The Licensing Laws (Repeals and Amendments) Act, 2006. 
33 Legal Notice No. 78 of 15th July 2005. 
34 World Bank (2010a). WT/TPR/S/271/KEN Trade Policy Review 
Page A2-194 
  
 65. Kenya participates in the RADDEX project, a sy stem for electronic exchange of documents 
and information among EAC customs authorities (Common Report III(1)(i)).  
66. Import procedures are regulated through the EA C Customs Management Act and the Customs 
and Excise Act CAP 472 (2011 Amendment).  Importers  clear their own goods through an appointed 
agent.  An application fee of US$10 is required fo r a customs broker licence.  Once licensed, the agent 
is required, inter alia,  to execute a security bond of US$5,000, pay an annual licence fee of US$400, 
and have a computer system capable of connecting to the Simba system. 
67. A risk management system is built into the Si mba system:  goods may be routed through a red 
channel (high risk), requiring a physical inspection of the documents and goods before clearance;  a 
yellow channel (medium risk), requiring inspection of  the documents; or a green channel (low risk), 
for clearance without the need for inspection.  During  the review period, an average of 37% of goods 
were cleared through the green channel, 42% through  the yellow, and 21% through the red.  The blue 
channel is used for clearance of authorized economi c operators (AEO), which was adopted in 2008.  It 
grants special status to importers and their cl earing agents who have proven to be reliable and 
compliant KRA partners.  To be considered as an AEO, international trade operators are required to 
have, inter alia , a satisfactory system for management of commercial records, proven financial and 
safety capacities, and good knowledge of customs pro cedures in Kenya.  An application form is 
available on the KRA website, for importers and clearing agents. 
68. Kenya has notified its legislation on customs valuation to the WTO.35  According to the 
authorities, customs valuation in Kenya is ba sed on the Fourth Schedule of the EAC Customs 
Management Act, which is aligned on the WTO Customs Valuation Agreement.  The transaction 
value method has applied to some 66% of imported goods.  A database of reference values (previously 
accepted transaction values) is provided through th e electronic Kenya Revenue Authority Valuation 
System (KRAVS).  Transport and insurance costs from entry points in Burundi, Rwanda, Tanzania, 
and Uganda to the Kenyan border are no longer dutiabl e.  Challenges in the area of customs valuation 
include capacity gaps in detecting undervaluation, and mis-declaration of certain products, mainly 
newly developed goods whose value is unknown.  
69. Aggrieved importers or any other authorized person may appeal to the Customs and Excise 
Appeals Tribunal, within 30 days from notification of a decision. Since the members of the Tribunal were gazetted in 2008, 20 appeals have been filed, of  which 8 were related to customs valuation, 5 to 
tariff classification, and the remainder to other cust oms issues.  If unsatisfied by the decision of the 
Appeals Tribunal, a person may appeal to the High Court within 40 days;  however, no such case 
occurred during the review period. 
(iii) Tariffs and other charges on imports 
(a) MFN applied tariff structure 
70. Since January 2005, Kenya has based its tariff  structure on the EAC Common External Tariff 
(Common Report, Chapter III(1)(iv)).  It continu es to apply higher tariffs on a list of 58 sensitive 
items.  
                                                      
35 WTO document G/VAL/N/1/KEN/1, 21 January 2002. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-195 
 
 
 (b) Other duties and charges 
71. In addition to tariffs, an import declaration fee of 2.25% is payable on the c.i.f. value of all 
imports (at a minimum of K Sh 5,000).  A 7% levy applies on the value of imported sugar.  The EAC 
Secretariat has listed other duties and charges co llected within the region, with the view to 
harmonizing them (Common Report, Chapter III(iv)(d)). 
(c) Tariff binding 
72. Kenya's bound tariffs (15% of all its tariff lines) have not changed since its last TPR.  Tariffs 
for all agricultural products are bound at a ceiling ra te of 100%.  For non-agri cultural products, Kenya 
has bound six tariff lines (at the HS four-digit level), equivalent to 1.6% of non-agricultural tariff lines 
fresh, chilled, or frozen fish (HS 03.02 and 03.03), excl uding fish fillets and other minced fish meat at 
62%;  medicaments (HS 30.03) at 35%;  pharmac eutical goods (HS 30.06) at 18%;  mineral or 
chemical fertilizers (HS 31.05) containing two or  three of the fertilizing elements, potassium, 
phosphorus, and nitrogen at 62%;  and polymers of et hylene in primary form (HS 39.01) at 31%.  The 
tariff on "other tractors" (HS 87.01.90) was bound at 62%. 
73. Kenya has bound other duties and charges at zero. 
(d) Tariff preferences 
74. Kenya grants tariff preferences at the zero rate to all products originating from EAC 
countries, under the Protocol on the Establishment of  the EAC Customs Union.  It also grants full 
tariff preferences (on a reciprocal basis) to all products, except sugar, to members of the Common Market for Eastern and Southern Africa (COMESA).
36   The customs duty on sugar originating from 
COMESA countries was reduced from 100% in 2008 to 40% in 2010, and to 10% from 2011;  it is 
expected to be reduced to zero in March 2014 (Chapter IV(1)(iii)). 
(iv) Internal taxes 
(a) Value-Added-Tax (VAT) 
75. VAT in Kenya is governed by the Value Adde d Tax Act (CAP. 476) and the Subsidiary 
Legislations (as revised up to 2004).  There were been no major changes to the legislation during the 
review period.  However, a VAT Bill is awaiting a doption;  it seeks to improve the tax administration 
and to minimize revenue losses linked to VAT exemptions. 
76. VAT is applied to all imported or locally pro duced goods and services.  The standard rate of 
16% applies to most goods and services;  a reduced rate of 14% applies to certain services, in particular hotels and restaurants; in 2008, the VAT rate on electricity was reduced to 12%.  Under the 
fifth Schedule (Section 8) of the Value Added Tax Act, zero-rated supplies include exports of goods 
and services, imports and purchases by designated pers ons or organizations (e.g. the President, armed 
forces, Commonwealth and other Governments, dipl omatic and aid agencies), all goods and taxable 
services destined for the export processing zones.  The section also provides for a long list of zero-
rated items, including essential goods such as some m ilk products, sugar, maize, and medicines.   
                                                      
36 Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, 
Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwa nda, Seychelles, Sudan, Swaziland, Uganda, Zambia, 
Zimbabwe. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-196 
  
 77. Exemptions are regulated in the second and third schedules of the VAT Act.  They comprise, 
notably, unprocessed agricultural products, incl uding fishery, forestry, livestock, and processed 
foodstuffs.  Exempted services include financial and insurance services, education and training, health 
and sanitary, agricultural services, social welfare, burial services, transportation, renting and leasing 
of land and residential bui ldings, postal services, tour operations and travel agencies, entertainment, 
accommodation and restaurant, conference, car pa rk services, and tourist transportation. 
78. VAT is based on the sale price for local suppli es.  For imports, the taxable value is the 
customs value plus customs duties, whether or not  a remission of the duty has been granted.  
79. As part of the ongoing reform efforts, the KRA has embarked on an extensive audit procedure 
on VAT payers. 
(b) Excise duties 
80. Excise taxes in Kenya are regulated by the Customs and Excises Act, CAP 472. Excise duties 
apply to imports and locally produced goods, in cluding foodstuffs, alcoholic beverages, tobacco 
products, fuels, and cosmetics (Table AIII.1).  These duties are charged on the ex-factory price of domestic goods and the import value (inclusive of cu stoms duties) of imported items.  Excise duties 
on imports are collected at the time of import, along with import duties and VAT. 
81. In 2009, an Excise Bill was submitted for parliame ntary consultation.  It aims to further 
modernize Kenya's excise duties collection.  However, the Bill is yet to be adopted. 
(v) Duty and tax concessions and exemptions 
82. The second and fifth schedules of the East Africa  Custom Management Act provide the list of 
goods exempted from duties (Common Report, Chapter III(1)(iv)(c)).  
83. In 2011, the Government suspended import du ties, including VAT, on maize and wheat to 
deal with the severe shortage that hit the country.  In addition, the EAC granted a one-year exemption 
to Kenya to apply a tariff rate of 35% to milled rice, instead of the "sensitive items" rate (75% or 
US$200/MT, whichever is higher).  Import duties ha ve also been eliminated on battery-powered 
vehicles for use in hotels, hospitals, and airports.  Other exemptions apply to gloves for laboratory and 
medical use, tsetse fly traps, and security equipment.   Most of these exemptions have led to significant 
losses in government revenue.  Some K Sh 6 billion were forgone due to exemptions on maize and 
wheat for the financial year 2010/11.  
84. Goods in transit are exempt from customs duties.   However, a transit fee (the Transit Toll on 
trucks) is collected for road maintenance.  Its ra tes are:  US$5 per km for buses, US$6 per km for up 
to 3-axle trucks, US$10 per km for trucks of more than 3-axles.  
(vi) Rules of origin 
85. Kenya has notified, to the WTO Committee on Rules of Origin, that it does not apply 
non-preferential rules of origin.
37  Its preferential rules of origin, in the EAC framework, have yet to 
be notified.  The EAC Protocol on the establishment of the customs union provides origin criteria for 
products from the EAC region (Common Report, Chapter III(1)(iii)). 
                                                      
37 WTO document G/RO/N/9, 19 April 1996. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-197 
 
 
 86. Under COMESA rules of origin, a product qualifi es for preferential treatment if it is wholly 
produced by a member state or has undergone substa ntial transformation in that member state (i.e. 
import content of no more than 60% of total cost of all materials, or value-a dded of 35% or change of 
tariff heading, or 25% value added for goods of economic importance).  Criteria for goods of 
economic importance include potential for povert y reduction, foreign exchange earnings, and 
potential to attract FDI.  Cumulation of origin is  allowed between COMESA countries.  Goods that 
have been accepted as meeting all the rules of orig in requirements should be issued with a COMESA 
Certificate of Origin by the relevant authority. 
87. The KRA is in charge of issuing certificates of origin for exports to enjoy preferential 
treatment into relevant export markets. 
(vii) Prohibitions, controls and licensing 
88. Kenya's import prohibition and licensing regime is governed by the second and the third 
schedules of the EAC Customs Management Act, 2004.   Goods are categorized into prohibited goods 
and restricted goods, which require approval from relevant authorities (Common Report, 
Chapter III(1)(vii)).  The Minister in ch arge of Trade may, by order in the Gazette,  amend the list of 
goods subject to import prohibition or licensing.  However, no such measures were taken by the 
Minister of Trade over the review period.  Kenya does not maintain a licensing system to administer 
quantitative restrictions. 
89. The Imports, Exports and Essential Supplies Act, which regulated import licensing, was 
repealed in 2006.38 
(viii) Contingency measures 
90. There have been no major changes to Kenya's regime on contingency me asures since its last 
TPR.  Kenya has never applied anti-dumping, count ervailing or safeguard measures under the WTO.  
The legal basis for the imposition of such measures is  contained in the Protocol on Establishment of 
the EAC Customs Union, and Sections 125 and 126 of the Customs and Excise Act. 
91. According to the authorities, Kenya is deve loping a new trade remedy regime.  Draft 
legislation on anti-dumping, countervailing, and safe guard measures and investigating authority is 
under consideration. 
(ix) Standards, technical regulations, and other requirements 
(a) Standardization, conformity assessment, and certification 
92. Standardization, testing, and certification in Ke nya are regulated by the Standards Acts (CAP 
496).  Kenya is a member of the International Organization for Standardization (ISO), the 
International Electrotechnical Commission (IEC), and the African Regional Organization for Standardization (ARSO). 
(b) Standardization 
93. The institutional framework for standards deve lopment has not fundamentally changed since 
Kenya's last Review.
39  Under the Ministry in charge of I ndustry, the Kenya Bureau of Standards 
                                                      
38 The Licensing Laws (Repeals and Amendment) Act, 2006. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-198 
  
 (KEBS) continues to coordinate:  the preparation of  standards relating to pr oducts, measurements, and 
processes;  the certification of industrial produc ts;  assistance in quality controls;  and the 
dissemination of information relating to standards.  KEBS is Kenya's national enquiry point under the 
TBT Agreement, while the Ministry in charge of Trade is the national notification Authority.40 
94. Any interested party (manufacturers/service pr oviders, consumers, Government Ministry, 
corporate body or NGO) may submit proposals for se tting a standard, or for revising, amending, or 
cancelling an established standard.  The standard s formulation process is undertaken when the 
relevant technical committee is satisfied, followi ng its own investigation and consultations with 
concerned stakeholders, of the need for standardization.41  According to the authorities, ex-ante 
impact assessment analyses are undert aken to ensure that standards me et the need of market-place and 
contribute to promoting smoother trade.  Noti ces concerning the development or adoption of 
standards and technical regulations by KEBS are published in the Gazette  or legal notices.  All draft 
standards are published in the KEBS Standards Work Programme Bulletin .  Interested persons are 
given the opportunity to make written comments on draft standards within 60 days.42  Compulsory 
standards (technical regulations) apply equally to im ports and locally produced goods. Such technical 
regulations become effective upon declaration through a legal notice by the relevant Ministry, which 
also includes the date it will take effect.  Exemption from compliance with a technical regulation may be granted by the Minister in charge of Industry on a case-by-case basis.
43  Standards are reviewed 
after three years for the first time and ever y five years thereafter or as needs arise. 
95. At the time of the last TPR of Kenya, concer ns were raised regardi ng the factual confusion 
between voluntary standards and technical regulati on (compulsory standards).  The authorities have 
undertaken to make formal separ ation between the two concepts,  through the ongoing revision 
process of the Standards Act.  Between Janua ry 2006 and December 2010, Kenya notified some 
190 technical regulations to the WTO.  The notifi cations concern notably, food products, chemicals, 
textiles, water and waste management, cosmetics, and electric equipment (Table AII.1).  Some 6,600 technical regulations are in force in Kenya,  covering food products, chemicals , mechanical and 
electrical products, textile and consumer pr oducts, and building an d related products. 
(c) Conformity assessment and certification 
96. A PVoC programme is carried out to ensure quality of products, health, and safety, and 
environmental protection for consumers.  It includ es physical inspection, product testing in approved 
laboratories, quality audit of production process (whe re applicable), and documentary review.  The 
programme was notified to the WTO Committee on Technical Barriers to Trade in 2005.
44 
97. Any product subject to PVoC must be accompanied by a certificate of conformity (CoC), 
which is compulsory for clearance in Kenya.  Where goods do not meet the requirements, a non-
conformity report (NCR) is issued to an exporter,  and the goods are not allowed to be imported to 
Kenya. 
                                                                                                                                                                     
39 See WT/TPR/S/171/KEN/Rev.1 
40 WTO document G/TBT/2/Add.86, 28 April 2005. 
41 The technical committees (TCs) cover several sectors, including food and agriculture, chemical, 
engineering (mechanical, civil, electro-technical, ICT, textiles, and metrology. 
42 WTO document G/TBT/2/Add.86, 28 April 2005. 
43 Section 9 (iii) of the Standa rds Act Cap 496, as revised. 
44 WTO document G/TBT/N/KEN/14, 7 July 2005. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-199 
 
 
 98. Physical inspection and documentary review fe es are paid by the exporter (Table III.1).  
Sampling and testing fees are determined by PVoC ag ents on a case-by-case basis.  Any good that is 
subject to PVoC, and arrives at the port of entry w ithout a CoC, is subject to a destination inspection 
fee equivalent to 15% of the c.i.f. value of the g oods.  The importer will be further required to execute 
a redeemable bond of a similar amount pending qua lity verification.  Non-compliance may lead to 
destruction or reshipment back to  source at the importer's costs. 
99. Kenya's PVoC certification process consists of th ree lanes based on:  risk to health, safety, 
and the environment, and the profile of the trader.45  Under the Route A, goods must be tested and 
physically inspected to demonstrate their conformity.  Route B is a fast track lane:  exporters wishing 
to use this lane must register for one year, and pa y a specified fee;  regist ered products are exempt 
from mandatory testing, but random testing is s till required;  sugar, cereals and pulses, fertilizer, 
animal, fishery, and dairy products, fresh horticultu ral products, and used goods are not eligible for 
Route B.  Route C is open to manufacturers who can demonstrate the existence of a quality management system in their manufacturing process.  A licence, valid for one year, is granted to 
manufacturers, after a successful audit of their pr oduction processes.  During the review period,  the 
annual average percentage of products per lane was 60% for Route A, 30% for B, and 10% for C. 
Table III.1 
Official fees for PVoC 
 Physical inspection, documentary 
review Product registration fee 
(Route B) Manufacturing licensing (Route C) 
Route A Ad valorem  fee of 0.500% of the f.o.b. 
value of the goods   
Route B Ad valorem  fee of 0.450% of the f.o.b. 
value of the goods US$375 for the first 15 products/line 
items.  Every additional product/line 
item above 15 products/items is 
charged an additional US$20 per product/product category  
Route C Ad valorem  fee of 0.275% of the f.o.b. 
value of the goods  To be determined by PVoC agents on 
a case-by-case basis 
Note: The above fees are subject to a minimum of US$220, for routes A, B, and C.  The maximum fee is US$2,375.  The fees do not  
 include:  sampling and testing. 
Source:  Kenya Bureau of Standards.   Viewed at:  www.KEBS.org. 
100. PVoC is also required for used road vehicles,  before they are shipped to Kenya.  Auto 
Terminal Japan Ltd (ATJ), Japan Export Vehicle Inspection Center Co. Ltd (JEVIC) and Quality 
Inspection Services Inc. Japan (QISJ) are mandate d by KEBS to provide inspection services for used 
vehicles originating from Japan, the United Arab  Emirates, United Kingdom, Singapore, and South 
Africa.  Vehicles originating elsewhere are subject to  destination inspection by the Ministry in charge 
of roads.  An inspection report is transmitted to KE BS to allow the issuance of a Certificate of Road 
Worthiness, which is needed for registration of the ve hicle.  The Ministry's inspection fee is 0.5% of 
the c.i.f. value or US$220, whichever is higher. 
101. KEBS is ISO 9001:2008 certified, for its activiti es of standard development, inspection, and 
quality assurance.  These activities relate notably to imported products, which are eligible for 
destination inspection, and locally produced goods  monitored regularly through visits to factories 
                                                      
45 Viewed at:   www.kebs.org. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-200 
  
 according to annual, quarterly, and monthly plans based on product risk and previous records of 
inspections and tests.46 
102. KEBS issues quality marks, which are a legal marking requirement for all goods 
manufactured in Kenya, under the Standards Act.  Manufacturers must apply for a "Standardization 
Mark", using the STA/1  form available on KEBS website.  KEBS also issues the "Diamond Mark", on 
a voluntary basis.  In addition to the required products specification, the "Diamond Mark" takes into consideration the production process. 
103. Persons who are denied a quality mark, or who wi sh to challenge any c ondition attached to a 
mark, may appeal to the Standards Tribunal, within 14 days of receipt of notification.  The Tribunal 
was established by the Standards Act (2004) and cons tituted in 2011;  it has not handled any cases to 
date. 
104. KEBS testing laboratories provide services for chemistry, food, microbiology, engineering, 
and textiles.  KEBS Quality Inspectors for Kenya Standards are among their main customers.  The laboratories hold accreditation from the United Kingdom Accreditation Service (UKAS). 
105. KEBS operates 13 metrology laboratories, 5 of which are accredited by the German 
accrediting body "DKD".  In January 2010, Kenya b ecame a full member of the General Conference 
of Weights and Measures (CGPM) of the Metre C onvention, and a signatory to the Committee on 
Weights and Measures Mutual Recognition Arrangement (CIPM-MRA). 
106. Kenya has concluded mutual recognition agreem ents (MRAs) with the other EAC countries, 
creating a regional recognition for quality marks issued by member states.  In addition Kenya has 
concluded memorandums of unders tanding (MoUs) with several countries, including Egypt and 
Sudan, on harmonization of standa rds, and technical cooperation. 
(d) Accreditation 
107. The Kenya Accreditation Service (KENAS) was established under Legal Notice No. 55 of 
May 2009.  It provides accreditation services to cer tification bodies, inspection bodies (IBs), and 
testing laboratories (testing and calibration).  KENAS is an associate member of the International 
Laboratory Accreditation Cooperation (ILAC).  Full membership of ILAC will enhance the 
acceptance of KENAS products and services across national borders. 
(e) Marking, labelling, and packaging 
108. All matters related to marking,  labelling, and packaging are governed by the Food, Drugs, and 
Chemicals Substances Act;  the Food Labelling, Additives, and Standard Regulations;  and the 
Weights and Measures Act.  Implementation is unde r the responsibility of:  the Ministry of Public 
Health and Sanitation, Kenya Bureau of Standards,  and the Department of Weights and Measures.  
The institutional setting seeks to prevent the cons umer or purchaser from being misled about the 
quality, quantity, character, value, composition, and the effect of products in Kenya.  All items traded 
in Kenya should be labelled with metric measurements, and packaged. 
109. All foodstuffs must be labelled in English or Kiswahili;  manufacturers must indicate on the 
labels of all consumables the date of manufacture and of expiry.  Except for paints packed in tubes or 
boxes, commonly sold as artists' or children's pain ts, imports of pre-packaged paints and allied 
                                                      
46 WTO document G/TBT/2/Add.86/Suppl.1, 2 June 2005. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-201 
 
 
 products must be sold by metric weight or metric  fluid measure.  Labelling on pharmaceuticals should 
include: therapeutically active substances, inactiv e ingredients, name and percentage of any 
bactericidal or bacteriostatic agent, manufacture and expiry dates, batch number, any warnings or 
precautions, name and business address of manufactu rer, and product registra tion number.  Banana 
leaves, maize, rice, sorghum or wheat straw, and ba gs containing or having cont ained malt, soil or leaf 
mould must not be used as packing material.  
110. Inadequate capacity to inspect marking, la belling, and packaging, compounded by imposition 
of penalties that are too lenient, has led to wi despread inadequate labelling, use of "foreign 
languages", and proliferation of expired food on Kenya's market. 
(x) Health, sanitary, phytosanitary, and environmental protection measures 
111. The main agencies involved in Kenya's SPS in stitutional framework are the Kenya Plant 
Health Inspectorate Service (KEPHIS), under the Mini stry in charge of Agriculture;  the Department 
of Fisheries (DFR), in the Ministry in charge  of Fisheries Development;  the Department of 
Veterinary Services (DVS), under the Ministry in  charge of Livestock Development;  and the 
Department of Food Safety and Quality, under the Ministry in charge of Public Health. 
112. Kenya's national enquiry points, under the WTO SPS Agreement, are:  KEPHIS for plant 
health issues, the Department of Veterinary Servi ces (DVS) for animal health, and the Department of 
Public health for food safety.  The Department of External Trade in the Ministry in charge of Trade 
has been designated as the SPS national notification authority.47  Kenya is a member of Codex 
Alimentarius, the World Organization for Animal Hea lth (OIE), and the International Plant Protection 
Convention.  It is also a party to the Conventio n on International Trade in Endangered Species of 
Wild Fauna and Flora (CITES). 
113. The Ministry in charge of Health is responsible  for coordination of the institutions involved in 
food safety management, including the Ministry in charge of Agriculture, the public commodity boards (for dairy, sugar, meat, and cereals), and KE BS.  According to the authorities, about 32 laws 
contain provisions dealing with food safety in Kenya.  The Food, Drugs and Chemical Substances 
Act;  the Public Health Act;  the Meat Control Ac t;  the Dairy Industry Act;  and the Pharmacy and 
Poisons Act comprise the main regulations for food safety. 
114. Plant health issues are regulated through th e Plant Protection Act (Cap 324), the Suppression 
of Noxious Weeds Act (Cap 325), the Agricultural Produce (Export) Act (Cap 319), and the Seeds and Plant Varieties Act (Cap 326).  KEPHIS is re sponsible for coordinating all matters relating to 
plant health, and quality control of agricultural inpu ts and products in Kenya.  Its export and import 
control activities are supported by a relatively well-equi pped laboratory facility in Nairobi.  It also has 
a growing number of staff, including over 102 scientists, 100 technical officers, and 150 support staff, and an annual budget of around US $2 million in 2010-11.  In 2007, the EU granted EUR3.2 million to 
Kenya, for capacity building in the areas of analyt ical services for contaminants in food and feed, 
plant health diagnostics, a nd expansion of laboratories.
48  According to the authorities, the project has 
helped in the expansion of the sc ope of accreditation and the introduction of new analytical work in 
mycotoxin analysis;  the setting up of systems for reporting pest outbreaks, improved risk assessment;  
and pest surveillance. 
                                                      
47 WTO documents G/SPS/ENQ/17, 20 October 2004;  and G/SPS/NNA/8, 20 December 2004. 
48 WTO document G/SPS/GEN/1020. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-202 
  
 115. Imports of plants, seeds, and fruit other than ca nned or bottled fruit must be inspected.  Plants 
imported for planting purposes, under a quarantine permit may, if necessary, be detained in quarantine 
or in special nurseries for observation before comme rcialization.  The quarantine facility inspection 
fee is K Sh 5,000.  All imported seeds should be acco mpanied by an Orange ISTA (International Seed 
Testing Association) certificate or equivalent , confirming that it has been produced under 
internationally accepted standards for seeds.  In a ddition, seeds must meet phytosanitary standards 
relating to control of quarantine diseases.  Plant mate rials arriving in Kenya without authorization and 
accompanying documents are intercepted and either destroyed or held until the correct documentation 
is produced, or shipped back at the owners' cost.49 
116. With support from the Government of the Netherlands, under the World Summit on 
Sustainable Development (WSSD) initiative, and FAO, KEPHIS has established an early warning 
system for detection of pests.  To this end, el ectronic pest (e-pest) surve illance software has been 
installed at KEPHIS, and e-pest surveillance hand- held gadgets issued to horticultural growers to 
collect pest data. The objectives of the system are to monitor pest outbreaks and pest dynamics for the 
purpose of developing pest management system s.  In addition, KEPHIS has implemented 
e-certification of horticultural products at the pilo t level, in collaboration with the Netherlands 
Government.50  
117. The main laws on animal health in Kenya are:   the Animal Diseases Act Cap 364;  the Meat 
Control Act Cap 356;  the Fertilizers and Animal Foods tuffs Act, Cap 345;  the Veterinary Surgeons 
and Veterinary Paraprofessionals Act, No 29 of 20 11;  the Prevention of Cruelty to Animals Act, 
Chapter 360;  the Dairy Industry Act, Chapter 336;  Cattle Cleansing Act, Cap 358;  the Rabies Act, 
Chapter 365;  the Branding of Stock Act, Chapter 357;  the Kenya Meat Commission Act Cap 363;  and the Hide Skin and Leather Trade Act, Cap 359. 
118. The Meat Control Act regulates the hygiene, storage, and transportation of meat, and the 
manufacture of meat products;  it also covers live animals intended for slaughter.  Under the Animal 
Diseases Act, the DVS is in charge of identifying  and declaring infected zones, applying animal 
health and animal food safety measures, including surv eillance, testing, inspection, and certification, 
as well as detaining (if necessary).  The DVS may prohibit or regulate the importation or the exportation of any specified kinds of animals, or of  carcasses, meat, hides, skins, hair, wool, litter, 
dung, live viruses capable of setting up infections in animals, sera, vaccines, and other biological or chemical products intended to be used for the cont rol of animal disease or fodder, from any specified 
country, port or territory. 
119. Imports of animals and animal products requi re licences issued by the DVS, and sanitary 
certificates delivered by the corresponding foreign authority, prior to shipment from the country of origin.  Depending on an assessment of risk, an imals may be held in approved quarantine facilities 
with regular veterinary inspection, followed by a health clearance certificate affirming the tests, 
clinical examinations and, where applicable, tr eatment undertaken during quarantine.  The importer 
bears the associated costs.  The ma in quarantine facilities are the Animal Isolation Facility at the Jomo 
Kenyatta International Airport, an d the pet quarantine at the Univers ity of Nairobi Veterinary School, 
for animals entering Kenya for surg ery.  For exports, Kenya has a quarantine facility at Ol Pejeta 
Ranch in Laikipia, which is officially approved fo r collection of bovine embryos for local and export 
markets. 
                                                      
49 For application forms for seeds or phytosanitary requirements see KEPHIS online information.  
Viewed at:  http ://www.kephis.org. 
50 WTO document G/SPS/GEN/1019, 15 June 2010. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-203 
 
 
 120. The Department of Fisheries enforces the hygi ene standards for the handling and processing 
of fish and fishery products in Kenya.  Accord ing to the authorities, th e Fish Quality Assurance 
(FQA) Regulations have been harmonized with those of the EU (Chapter IV(1)(iii)). 
121. Kenya signed the Cartagena Protocol on Biosaf ety in 2000; and fulfilled the ratification 
requirements in 2003.  In 2006, the Government adopted the Policy on Biotechnology, which stresses 
the role of biotechnology as a lever for poverty re duction, food security, and conservation of the 
environment.  The policy identifies industry and trade as key areas for using biotechnology. 
122. A National Biotechnology Awareness Strategy was developed in 2008 by the Ministry in 
charge of Science and Technology to promote public  awareness, education, and participation.  The 
Biosafety Act was adopted in 2009, and a Nationa l Biosafety Authority (NBA) was established in 
2010.  The roles of the NBA include receiving, revi ewing, and making decisions on applications to 
introduce or develop biotechnolog y products for research or commercial purposes in Kenya.  
Supplementary regulations, the Biosafety (Contained Use) Regulations, 2011, the Biosafety (Import, 
Export and Transit) Regulations, 2011, and the Bio safety (Environmental Release) Regulations, 2011, 
were published in 2011 to fully allow trade and tran sportation, and deal with environmental issues 
regarding biosafety products.  However, to da te no genetically modified crops have been 
commercialized in Kenya. 
123. Over the period 2005-06, due to outbreaks of  Avian Flu, Kenya notified 26 emergency SPS 
measures to the WTO Committee on Sanitary and Ph ytosanitary Measures, restricting imports of 
domestic and wild birds, eggs, and bird-meat pr oducts, from affected countries listed in the OIE 
World Animal Health Information database. Kenya also notified, the prohibition, as from April 2010, 
of the importation of live sheep and goats from countries reporting scrapie, caprine arthritis/encephalitis (CAE), and bovi ne spongiform encephalopathy (BSE).
51  In 2010, an alert was 
issued on probable contamination of milk and eggs  originating in China, following the detection of 
contamination with melamine.  This required for full verification of the sanitary status of those 
commodities at the border inspection points. 
124. In July 2010, Kenya notified to the WTO its re quirements for importation of plants and plant 
products. These requirements include the need for a plant import permit (PIP), phytosanitary 
certificate, physical inspections, and adherence to IPPC ISPM No. 15 wood packaging standards for 
containerized cargo.52 
(2) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures 
125. The registration formalities for imports of goods for commercial purposes also apply to 
exports (see section (1)(i)).  Export consignmen ts of animals and animal products require an 
international veterinary certificate issued by the Di rector of Veterinary Services, at a fee averaging 
K Sh 500.  For health-related products, certification is required on the premises where the product is 
processed, manufactured or stored prior to exportati on.  This certification is issued by the health 
authorities, for a fee of K Sh 1000.  KEPHIS issues export permits, depending on requirements of the trading partner. 
                                                      
51 WTO document G/SPS/N/KEN/29, 21 December 2009. 
52 WTO document G/SPS/N/KEN/30, 29 July 2010;  and IPPC (2002). WT/TPR/S/271/KEN Trade Policy Review 
Page A2-204 
  
 (ii) Export taxes 
126. In 2006, with a view to increasing value addition in the leather subsector, the Government 
increased the export taxes on hides and skins from 20% to 40%.  According to the authorities, this 
policy has been successful in boosting Kenya's le ather export;  and almost all skins produced are 
semi-processed to wet blue or fi nished leather.  The number of cottage industries and tanneries has 
also risen, resulting in noticeable jobs creation.  Kenya also applies an export tax of 20% to scrap 
metal, to support local demand for metals. 
(iii) Export prohibitions, restrictions, and licensing 
127. The Third Schedule of the EAC Customs Manageme nt Act is the main legal basis for export 
prohibitions and restrictions (Common Report, Chap ter III(2)(i)).  The Minister in charge of Trade 
may amend the lists, by order in the Gazette .  In October 2008, the Government placed a ban on the 
export of maize to prevent a further shortf all in its supply to the local market. 
128. In 2010, through a G azette  notice, the EAC Council of Ministers restricted the export of used 
automobile batteries, lead scrap, crude and refined le ad, and all other forms of  scrap metals, to support 
the region’s demand for metals. 
(iv) Export subsidies and incentives 
129. According to the authorities, Kenya does not grant any export subsidy;  and there has not been 
substantial change to export incentives over the review period.53  However, three incentives schemes 
are available to Kenyan companies to encourage export-oriented activities:  the Export Processing 
Zones (EPZ) Scheme, the Manufacturing Under Bo nd Scheme, and the Duty Remission Scheme. 
130. The Export Processing Zones Authority (EPZA) administers the implementation of the Export 
Processing Zones (EPZ) Act, Cap 517 of the Laws of  Kenya.  The EPZA appraises applicants for EPZ 
developer/operator licences.  It also reviews app lications for business service permits on the basis of:  
the eligibility of the activity, the applicant’s pr ofessional qualification and adequate experience to 
undertake the proposed business activity, and its financ ial and ethical standings.  The main eligible 
activities are:  export-oriented manufacturing or processing;  export-oriented commercial activities, 
including bulk breaking, trading, relabeling, grad ing, and repacking;  and export services including 
brokerage, repair, consulta ncy, and information. 
131. The criteria against which the EPZ enterprises are evaluated include:  job creation, technology 
transfer and skills training, development of ne w export products and new export markets, and 
backward linkages with the Kenyan economy.  EPZ enterprises benefit from exemptions from all 
taxes and duties payable under the Customs and Ex cise Act and the Value Added Act on all imports 
for use in the eligible business activ ities, subject to the limitations on goods specified in the Second 
Schedule of the EPZ Act, and the conditions specifi ed in the Customs and Excise Act and the Value 
Added Tax Act. 
132. Over 40 gazetted zones in Kenya provide empl oyment to some 32,000 persons, and contribute 
to 7.6 % of Kenya's exports (Table III.2).  Some 50% of EPZ output is exported to the United States 
under AGOA. 
                                                      
53 WTO document WT/TPR/S/171/KEN/Rev.1. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-205 
 
 
 Table III.2 
Performance of EPZ key indicators:  2006-11 
Indicator 2006 2007 2008 2009 2010 2011 
Gazetted zones (No.) 39 41 38 41 42 44 
Enterprises operating (No.) 71 72 77 83 75 79 
Employment – (Kenyans) 36,767 34,446 30,187 30,115 31,026 32,043 
Employment – (expatriates) 649 511 471 508 476 421 
Total employment  37,416 34,957 30,658 30,623 31,502 32,464 
Total sales (K Sh million) 25,352 29,400 31,262 26,798 32,348 42,442 
EPA exports to EAC countries 
(K Sh million) 882 1,013 1,527 768 1,425 1,895 
Exports (K Sh million) 22,893 27,400 28,094 23,948 28,998 39,067 
Domestic sales (K Sh . million) 1,403 1,421 2,536 2,214 2,389 2,553 
Imports (K Sh million) 12,674 17,287 16,348 12,672 16,518 21,443 
Investment K Sh million 20,320 19,027 21,701 21,507 23,563 26,468 
Total domestic expenditure (K Sh 
million) 9,173 9,110 11,365 11,032 13,287 14,921 
 
Source: Information provided by the Kenyan authorities. 
133. According to the authorities, EPZs in Kenya are being transformed into special economic 
zones (SEZs).  The SEZ programme will widen the scope  of incentives to various eligible activities.  
(v) Export finance, insurance, and guarantees 
134. Kenya does not maintain a public export finance, insurance or guarantee scheme.  Export 
finance and insurance is provided by private comp anies whose prices are market-determined.  The 
Africa Trade Insurance Agency provides expor t credit guarantees to cover political risks. 
(vi) Export promotion and marketing assistance 
135. The Export Promotion Council (EPC) is the main institution in charge of the development and 
promotion of Kenya's exports.  It has the mandate of coordinati ng and harmonizing export 
development programmes in Kenya.  In collaboration with the Ministry in charge of Trade, the EPC 
develops annual export market development progr ammes to guide the participation of Kenya’s 
exporters in trade fairs and exhi bitions in prioritized markets. 
136. Among the other agencies involved are the Export Processing Zones Authority (EPZA), the 
Kenya National Chamber of Commerce and Industr y (KNCCI), and sectoral producer and exporter 
associations, such as the Kenya Association of Manuf acturers.  Sectoral parastatals, such as the 
Horticultural Crops Development Authority, are also involved in export promotion activities. 
137. A National Export Strategy (NES) was issued in  2003, for the period 2003-07.  According to 
the authorities, the NES assisted in deepening markets for manufacturers in traditional markets, and 
expansion into new markets. 
(3) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Incentives 
138. Kenya has not introduced noticeable changes to  its investment incentives since 2006.  These 
continue to include manufactur ing under bond, export processi ng zones (section (2)(iv)), and 
investment allowances. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-206 
  
 139. A number of government agencies provide agricultural extension services, e.g. promoting the 
use of certain species, veterinary services, plant,  and tractor-hire services to small-scale farmers 
(Chapter IV(1)(ii)). 
140. Various development institutions  have provided long-term loans with soft conditions to 
industrial and commercial activities, including the Industrial Development Ba nk, Development Bank 
of Kenya, Industrial and Commercial Developm ent Corporation, Kenya Tourism Development 
Corporation, and Kenya Industrial Estates. 
141. Kenya has a number of agricultural research ins titutes, many of them focusing on specific 
produce (coffee, tea, sugar, etc.) (Chapter IV(1)).   During the review period, the annual government 
funding to agricultural research in stitutes averaged some K Sh 2.1 billion.  The Kenya Industrial 
Research Development Institute is  the key agency for industrial R&D, and the main beneficiary of 
public funding (90% of total public funds). 
(ii) Competition policy and price controls 
(a) Competition policy 
142. Until August 2011, competitive practices were regulated through the Restrictive Trade 
Practices, Monopolies and Price Control Act (Cap 504)  (the RTPA).  The Act provided for the control 
of restrictive trade practices, collusive tendering,  monopolies and concentrations of economic power, 
and mergers and takeovers.  In a ddition, it contained price-control measures, which, according to the 
authorities, were never used.  Investigation of an y infringement of the Act was the responsibility of 
the Monopolies and Prices Commission, which operated under the Ministry in charge of Finance.  The 
Restrictive Trade Practice Tribunal, and the High C ourt, as last resort, served as appeal bodies.  
Between 2006 and 2011 th e Monopolies and Prices Commission dealt with 51 cases of restrictive 
practices and 98 mergers and acquisitions cases. 
143. The RTPA did not provide scope for avoidi ng conflicting jurisdiction with the numerous 
sector-specific regulators, in dealing with competiti on issues.  In addition, an unclear definition of 
restrictive trade practices, and mergers, compounde d by limited investigation powers vested in the 
Monopolies and Prices Commission, limited the eff ective enforcement of the RTPA.  Among other 
weaknesses, the RTPA did not cover consumer welfare issues. 
144. Kenya's Competition Act 2009, Cap 504, Laws of Kenya, was operationalized in August 
2011, through a legal notice issued by the Minister in charge of Finance, which is responsible for 
competition policy formulation in Kenya.54  The new legislation clearly fits within Kenya's Economic 
Recovery Strategy document, and its Medium -term Plan (2008-2012), which encourages the 
modernization of Kenya's competition policy institutional framework. 
145. The Act provides for the establishment of an autonomous competition authority, the 
Competition Authority of Kenya (CAK), no longer under the Ministry in charge of Finance.  The members are selected using competitive criteria; they are then vetted and approved by the Parliament.  
The primary jurisdiction of the Competition Authorit y is enforcement of the Competition Act.  It will 
also study government policies and practices on competition and consumer welfare.  The CAK  
comprises 19 professionals, and according to the authoriti es, more are to be hired in the near future. 
                                                      
54 Kenya Gazette  Supplement Notice No. 59, Legal Notice No. 73. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-207 
 
 
 146. The Act also established a Competition Tribunal with the mandate of adjudicating appeals 
resulting from determinations of the Competition Authority. 
147. Under Part IV of the Act, any merger or ac quisition requires prior approval from the CAK.  
Approval is required irrespective of the relevant ma rket share and similarities in the business of the 
parties to the merger.  In order to promote transp arency and predictability, the Authority published a 
Market Definition Guideline, to help estim ate the relevant market share of parties.55  E a c h  o f  t h e  
parties involved in a merger is required by the Act to notify the CAK of the proposal, using the prescribed application form.  The merger evaluation process by the Authority is time bound.
56  CAK 
makes a decision regarding a proposed merger within 60 days after recei pt of the notification.  Where 
CAK requires further information or deems it necessary to convene a hearing, it is required by the Act 
to make a decision within 30 days after receipt of the required information or conclusion of the 
hearing.  
148. Under Part III of the Act, the CAK is res ponsible for regulating market conduct, i.e. 
restrictive trade practices, including abuse of market dominance.  This is aimed at, inter alia , ensuring 
that prices are market-determined, and that there is  no barrier to new entrants.  A dominant position is 
where a single firm controls not less than half of the relevant market in Kenya;  dominance is not 
considered at a lower share.  However, refusal to gr ant IPRs is considered as an abuse if its object or 
effect is to limit competition by preventing, hindering  or deterring entry or raising the costs of supply 
for other competitors.  It is envisaged that regula tions to enforce these provisions will be developed.  
Acts considered as abuse, when applied by dominan t firms include: directly or indirectly imposing 
unfair purchase or selling prices;  limiting production, market access, investment, distribution, or 
technological development; and applying dissimilar conditions to equivalent transactions with other 
trading parties.  Consumer protection is also deal t with in the Competition Act, which requires, for 
example, prior notice to consumers in relation to  any imposition of charges and fees by financial 
institutions. Consumers are protected against mislea ding advertisements and products that fall below 
prescribed safety standards.  To facilitate the impl ementation of the provisions of the Act, consumer 
organizations are allocated various roles, such as receiving and investigating complaints, representing 
consumers before the Authority, providing consum er information, and notifying the Authority of 
infringements of the Act. 
149. Exemptions are granted for certain restrictive practices aimed at, inter alia,  promoting 
Kenya's exports, enhancing efficiency in production,  and maintaining quality in services.  CAK has 
developed guidelines to ensure clear en forcement of the exemption measures. 
150. The Act mandates the Authority to negotia te agreements with any regulatory body 
(authorities in charge of sectoral regulation) in  order to identify and establish procedures for 
management of concurrent jurisdiction and ensure c onsistent application of the principles of the Act. 
However, in case of conflict, disharmony or incons istency, the determinations, directives, regulation, 
rules, orders, and decision of the Authority prevail. 
151. In dealing with infringements and with notifie d mergers, the Authority may investigate on its 
own initiative or upon receipt of information or co mplaint from any person or government agency.  
Investigative tools rely on documentary review.  Th e Act grants the Authority the power of entry and 
search of premises of firms suspected of infri ngement.  The Competition Authority gives written 
notice of its proposed decision to each of the parties that may be affected.  The parties may request an 
                                                      
55 For the merger application and withdrawal fo rms see Competition Authority online information. 
Viewed at:  http://www.cak.go.ke, February 2012. 
56 Competition Authority online information. Viewed at:  http://www.cak.go.ke, February 2012. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-208 
  
 oral representation to defend their position.  The Au thority may, to protect public interest, suspend 
any practice that is under investigation.  In general,  the Authority's final decision is published in the 
Gazette . 
152. A person aggrieved by a decision of the Compe tition Authority may appeal in writing to the 
Competition Tribunal;  if dissatisfied with the Tribunal's decision s/he may appeal to the High Court, 
within 30 days of notice of that decision being ser ved.  The decision of the High Court is final.  
Infringers of the Competition Act are liable to imprisonment for a maximum of five years, or a fine not exceeding K Sh 10 million, or both. 
(b) Price controls 
153. In general, prices in Kenya are market-determi ned (since the 1990s).  Although the repealed 
Restrictive Trade Practices, Monopolies, and Price Control Act (CAP 504) had provisions regarding 
price controls, they were never applied.  Howeve r due to persistent increases in prices of basic 
commodities, the Price Control (Essentials Goods) Ac t Cap 26, was enacted in 2011.  The Minister 
charged with the implementation of the Act,  may from time to time, by order in the Gazette , declare 
any goods to be essential commodities and determ ine the maximum prices of the commodities in 
consultation with th e relevant industry.
57  The Act does not provide the criteria for identifying 
essential goods.  The new Price Control Act is not yet in force. 
154. Since 2010, Kenya has introduced a system of monthly fuel price controls. Maximum prices 
are determined on the 15th day of every month, and remain in force until the 14th day of the following month.  The maximum wholesale prices and the retail pump prices of petroleum products 
are determined in accordance with the formula set  out by the Energy Regulatory Commission (ERC). 
Water provision, electricity, reserved postal service s, and interconnection services are also regulated 
in Kenya. 
(iii) State-trading enterprises, state ownership, and privatization 
(a) State trading 
155. Kenya has notified to the WTO that it does not have any state-trading enterprises within the 
meaning of Article XVII of GATT 1994.
58 
156. The Agricultural Produce Marketing Act, Cap 320, which regulates the marketing of 
agricultural products, empowers the various marke ting boards to market the goods under their 
responsibility.  For instance, in the past, the Pyre thrum Board of Kenya (PBK), was actively involved 
in commercial activities.  The Government has initiate d a legal reform that seeks to restructure PBK 
by creating a separate regulatory arm, and an independent marketing agency. 
157. Prior to the enactment of th e Competition Act 2009, Kenya's Re strictive Trade Practices Act 
specifically exempted from its scope, commercia l activities associated with exclusive trading 
privileges recognized by law, such as parastatal s.  Under the new competition framework, state 
corporations are governed by the Competition Act 2009,  insofar as they engage in trade.  According 
to the authorities, about 167 state corporations operate in Kenya, in:  manufacturing;  regulatory 
issues;  services, including finance, education, resear ch;  and regional development.  Some of these 
                                                      
57 The Price Control (Essential Goods) Act No. 26 of 2011. 
58 WTO document G/STR/N/11//KEN, 27 March 2006. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-209 
 
 
 corporations are 100% state owned (Table III.3).  In addition, a number of companies operate under 
monopoly or exclusive rights.  
Table III.3 
List of selected state-owned companies  
Enterprise name Remarks/State of privatization as of May 2006 
State-owned companies in which the State holds all the capital  
Kenya Pipeline Company 100% 
Kenya Meat Commission 100% 
New KICC 100% 
Kenya Airports Authority 100% 
Kenya Ports Authority 100% 
Nyayo Tea Zones 100% 
Pyrethrum Board of Kenya 100% 
National Oil Corporation 100% 
Kenya Railways Corporation 100% 
Kenya Ferry Services 100% 
Kenya Pyrethrum Board 
 100% 
Semi-public companies in which the State holds a blocking minority 
Kenya Electricity Generating 
Company 50% 
Kenya Petroleum Refineries 40% 
Kenya Power and lighting company 48% 
Kenya Reinsurance Corporation 60% 
Telkom Kenya 
 49% 
Semi-public companies in which the State holds less than a blocking minority 
Kenya Wine Agency .. 
Mumias Sugar Company 20% 
East African Portland Cement 
Company 27% 
Pan African Paper Mills 34% 
Telkom Kenya 49% 
 
.. Not available. 
 
Source: Information provided by the Kenyan authorities. 
(b) Privatization 
158. Until 2008, the regulatory framework for the priv atization of public enterprises (PEs) was 
based on the Policy Paper on Public Enterprises Reform and Privatization, issued in 1992.  This had 
identified 240 commercial PEs with public-sector equity  participation:  207 were to be privatized; and 
33 were to be restructured, due to their "strategic" standing.  Strategic criteria for exclusion from privatization included national security, health, an d environment protection.  According to the 
authorities, 164 of the non-strategic PEs were pr ivatized during the first phase of the programme 
(ending in 2002), and the number of strategic PEs was reduced to 14. 
159. Five major state corporations were priv atized during the second phase 2003-07:  Kenya 
Electricity Generating Company;  Kenya Reinsura nce;  Telkom Kenya;  Kenya Railways;  and 
Mumias Sugar Company, which was partially privat ized.  Safaricom Kenya Limited was privatized 
in 2008.  Kenya's privatization process faced vi brant criticism during its second phase, due to its 
perceived lack of transparency.  To address these difficulties, a new Privatization Act, enacted in 
2005, entered into operation in 2008.  WT/TPR/S/271/KEN Trade Policy Review 
Page A2-210 
  
 160. The Privatization Act, establis hes a Commission responsible for inter alia , formulating, 
managing, and implementing privati zation programmes.  It is in charge of making a specific proposal 
for each privatization included in the privatization programme.  The privatization proposal must be 
approved by the Cabinet , and presented to the Parliamentary Departmental Committee on Finance, 
Planning and Trade. 
161. The Privatization Appeals Tribunal, to review  complaints against Privatization Commission 
decisions, is yet to be established. 
162. Privatization methods used in Kenya include: public offering of shares; concessions, leases, 
management contracts and other forms of public-p rivate partnerships;  negotiated sales resulting from 
the exercise of pre-emptive rights;  sale of assets, including liquidation;  and any other method 
approved by Cabinet. 
163. In general, privatizations are open to Kenyans and non-Kenyans.  However, the Minister in 
charge of Finance may direct the Commission to limit participation to Kenyans;  a minimum level of participation by Kenyans may also be specified. 
(iv) Public procurement 
164. The Public Procurement and Disposal Act (PPDA), 2005, governs public procurement in 
Kenya.  It entered into operation in January 2007, through the Public Procurement and Disposal 
Regulations, 2006.  The Act has been amended to pr ovide for the Public Procurement and Disposal 
(Public Private Partnership) Regulation, 2009 and th e Public Procurement and Disposal (Preference 
and Reservations) Re gulations, 2011. 
165. The Public Procurement Oversight Authority (PPOA) was established in September 2007 to 
ensure that procurement procedures comply with th e law;  monitor the public procurement system and 
recommend improvements; assist in the implementation and operation of the procurement system;  and initiate public procurement po licy and amendments to the PPDA.  The Public Procurement 
Oversight Advisory Board (PPAB) advises the PPOA on the exercise of its powers and the performance of its function;  it is also in char ge of approving the PPOA's revenue and expenditures 
estimates.  The Public Procurement Administrative Re view Board (PPARB) is an appeals mechanism;  
it is the continuation of the Public Procurement Co mplaints, Review, and Appeal Board, which used 
to operate under Kenya's previous Exchequer and Audit Act (Public Procurement Regulations, 2001). 
166. Under Kenya's procurement le gislation open tendering is the preferred procurement 
procedure.  Alternative procedures comprise: restri cted tendering, direct procurement, request for 
proposals, request for quotations, procedures for lo w-value procurements, and special procedures.  
The procedure to be followed depends on the cla ss of the procuring entity (Table III.4) and the 
thresholds outlined in the Public Procurement a nd Disposal Regulations, 2006 (Tables AIII.2, AIII.3 
and AIII.4).  International tendering is used where th e participation of foreign entities is necessary for 
an effective competitive process.  
167. In open tendering, the tender must be advertised  at least twice in a newspaper of nationwide 
circulation, as well as in othe r relevant publications.  This should include one or more 
English-language newspapers or other publications that have sufficient circulation outside Kenya, 
for international tendering . EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-211 
 
 
 168. The splitting of a procurement contract is prohibited.  The Regulations provide for 
preferential margins of up to 15%, depending on the leve l of national participation in the capital of the 
bidder.  However, Kenyan citizens receive excl usive preferences for procurement of goods and 
services of up to K Sh 50 million (approximately  US$74,700), and of works up to K Sh 200 million 
(approximately US$2,983,000), and road work up to K Sh 500 million.59 
Table III.4 
Classification of public entities for procurement procedures 
Class A Class B Class C 
State corporations City councils (Nairobi, Mombasa, Kisumu ) Other local authorities (municipal, county, town councils) 
Ministries Cooperative societies Schools 
 Universities District hospitals, sub-district hospitals 
 Colleges Health centres/dispensaries 
 Districts Polytechnics 
 Provincial hospitals Constituency development fund committees 
 Semi-autonomous government agencies  
 Commissions  
 
Source: Public Procurement Regulations, 2006.  
169. In 2007, the main findings of the OECD-D AC Methodology for Assessment of National 
Procurement Systems (version 4) revealed that integrity and transparency in Kenya's public 
procurement system had improved somewhat.  This followed the establishment of an internal audit 
mechanism, which allows the Inte rnal Auditor General (IAG) to undertake internal control of public 
entities.  In addition, a review and appeals mechanis m, with clear enforcement systems is in place in 
Kenya.  The PPARB deals with complaints related to public procurements.  Its decisions may be 
appealed to the High Court  within 14 days. 
170. Despite the noticeable progress no entity has been given a clear mandate to control 
procurement.  Although the IAG bridges this gap, its work remains too broad to address the specific 
public procurement issue effectively, and auditors tend to lack proficiency in procurement-related 
matters. 
171. Figures regarding the volume of purchase are not available. 
172. Kenya is neither a signatory nor an obser ver to the WTO Plurilateral Agreement on 
Government Procurement. 
(v) Intellectual property rights (IPRs) 
173. Kenya is a contracting party to the main regi onal and international tr eaties and agreements on 
IPRs, including some of those administered by the World Intellectual Property Organization (WIPO), the African Regional Intellectual Property Organizati on (ARIPO), and the International Union for the 
Protection of New Varieties of Plants (UPOV).
60  In January 2008, Kenya became a signatory to the 
Convention for the Safeguarding of Intangible Cultura l Heritage; and, in June 2008, it became a 
signatory to the Convention on the Protection and Pr omotion of the Diversity of Cultural Expressions. 
                                                      
59 PPOA (2006). 
60 WTO document WT/TPR/S/171/KEN/Rev.1. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-212 
  
 174. The Kenya Industrial Property Institute (KIPI) is the contact point for matters regarding 
industrial property;  the Kenya Copyright Board (K ECOBO), is responsible for copyright issues and 
related rights;  and KEPHIS is in charge of plant breeders' rights.61 
175. Over the review period, the main change in Kenya's IP framework was the enactment of the 
Anti-Counterfeit Act (No. 13) 2008.  However, its full implementation was restricted by the 
Constitutional Court, which ruled that some provisi ons of the Act limit access to affordable and 
essential drugs including generic medicines for HIV/AI DS.  As a consequence, the Court has urged 
Kenya’s Parliament to review the Act in order to  remove ambiguities that could result in arbitrary 
seizures of generic medicines under the pretext of  fighting counterfeit drugs.  The Anti-counterfeit 
Agency has filed an appeal against this ruling. 
176. The other IP-related issues have changed significantly changed since 2006 (Table III.5). 
Table III.5 
Overview of IPR protection, 2012 
Subject and main 
legislation Coverage Duration Selected exclusions and limitations 
Industrial designs  
Industrial Property 
Act, 2001 Any composition of lines or 
colours or any three-
dimensional form that gives a 
special appearance to and serves as a pattern for a 
product of industry or 
handicraft 5 years from filing date; 
renewable up to 
2 consecutive periods of 
5 years Anything in an industrial design serving solely to 
obtain technical result;  industrial designs that are 
contrary to public order or morality are not registrable 
Patents and 
utility models 
 
Industrial Property 
Act, 2001  Patents:  any product or 
process that is new, involves 
an inventive step, and is industrially applicable  
 
Utility models:  any product or process that is new and 
industrially applicable 20 years from filing date
 
  
 
 10 years from the 
granting date, not 
renewable  The following are not considered inventions:  
discoveries, scientific theories, and mathematical 
methods;  schemes, rules or methods for doing business, performing purely mental acts or playing 
games;  methods for treatments of the human or 
animal by surgery or therapy, as well as diagnostic methods practised in relation thereto;  mere 
presentation of information;  and public health related 
methods of use of any mole cule or other substance 
used for the prevention or treatment of diseases 
designated by the Health Minister 
The following are non-patentable:  plant varieties as provided for in the Seeds and Plant Varieties Act;  
and inventions contrary to public order, morality, 
public health and safety, principles of humanity, and environmental conservation 
Rights are limited by the terms of the patent;  
provisions on compulsory licensing or state exploitation of patented i nventions;  and extend only 
to acts done for industrial or commercial purposes  
(e.g. not to scientific research) 
Trade marks 
 
Trade Mark Act, 
2002  Goods and services:  mark 
includes a distinguishing guise, 
slogan, device, brand, heading, 
label, ticket, name, signature, word, letter or numeral or any 
combination thereof whether in 
2- or 3- dimensional form 10 years, renewable 
indefinitely in 10-year 
intervals  
Table III.5 
                                                      
61 WTO document IP/N/3/Rev.11, 4 February 2010. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-213 
 
 
 Subject and main 
legislation Coverage Duration Selected exclusions and limitations 
Copyrights and 
related rights  
Copyright Act 
No. 12, 2001 Literary works, musical 
works, artistic works, audio-visual works, sound 
recordings, and broadcasts Moral rights: non-
transmissible during the author's life 
Economic rights: the 
author's life plus 50 years   
Related rights:  50 years 
from the date of making, recording, or 
broadcasting Rights exclude control over, inter alia :  fair dealing 
for the purpose of scientific research, private use, criticism or review, or the reporting of current events 
subject to acknowledgement;  incidental inclusion in 
a film or broadcast;  inclusion in a collection of literary or musical works of not more than two short 
passages with an acknowledgement, for use in a 
school or university;  broadcasting if intended for purposes of systematic instructional activities;  and 
reading or recitation in public or in a broadcast by 
one person of any reasonable extract if accompanied by a sufficient acknowledgement 
Geographical indications  
Trade Mark Act, 
2002  A description or a 
representation used to indicate the geographical 
origin as (in relation to goods 
or services), in the territory of a country or a region or 
locality in the territory, 
where a given quality, reputation or other 
characteristics of goods or 
services are exclusively or essentially attributable to geographical environment 
including natural factors, 
human factors or both Indefinite   Indications are not protected:  that do not correspond 
to their definition;  that ar e contrary to public order or 
morality;  and that are not or cease to be protected in 
their country of origin, or th at have fallen into disuse 
in that country 
Plant varieties 
 
The Seeds and Plant Varieties 
Act, Cap 326, 
1972 Plant varieties that are 
sufficiently distinguishable, 
sufficiently varietal, pure, sufficiently uniform or 
homogenous, and stable in 
their essential characteristics 25 years Scientific or research purpose, and use outside Kenya 
(seeds) 
 
Source: Information provided by the Kenyan authorities. 
(a) Industrial property 
177. The Industrial Property Act, 2001 provides for gr anting and registration of patents, utility 
models, technovations, and industrial designs in Kenya.  The KIPI's mandate includes:  considering 
applications for and granting industrial property ri ghts, screening technology-transfer agreements and 
licences, providing industrial property information for technological and economic development to 
the public, promoting local inventiveness and inno vativeness, and offering training in industrial 
property to the public.  It is also responsible fo r implementation of the Industrial Property Act, 2001 
and the Trade Mark Act Cap 506 of the laws of Keny a.  A draft amendment, to the Industrial Property 
Act, 2001, is in progress to , inter alia , avail Kenya of the flexibilities enshrined in the TRIPS 
Agreement, and to enhance local manufac turing capacity in patent application. 
178. In 2007, the KIPI issued guidelines on the practices and procedures to be followed in 
examining and processing industrial property applicati ons for the grant of patents, and registration of 
utility models and industrial designs.  In general, applications for industrial property rights have 
shown a mixed trend during the review period (Table III.6). 
179. The Act allows for compulsory licensing and pa rallel imports.  In 2007, a proposal to limit 
provisions on parallel imports was re jected by the Kenyan Parliament.  The main reason given by the 
authorities was the need to facilita te access to affordable generic medicines by Kenyans, without 
seeking permission from drug patent rights holders.  Meanwhile, the Pharmacy and Poisons Board WT/TPR/S/271/KEN Trade Policy Review 
Page A2-214 
  
 (PPB), under the Ministry in charge of Health, has developed guidelines fo r parallel importation of 
patented medicines.  A person or company that wi shes to undertake parallel imports must apply to the 
PPB to be registered as a parallel importer;  an import permit is also required. 
Table III.6  
Applications and registrations of patents, industrial designs and utility models, 2006-10 
 Applications (number) Registrations (number) 
Year 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 
National and international patents         
By residents 41 41 63 48 77 5 4 5 6 4 
By non-residents 2 6 0 6 2 6 1 4 5 3 
By non-residents (PCT) 39 85 89 117 118 18 12 33 76 47 
Total 82 132 97 171 197 29 17 42 87 54 
Industrial designs   
By residents 54 42 39 76 69 34 16 33 90 39 
By non-residents 18 32 10 14 7 13 19 15 13 11 
Total 72 74 49 90 76 47 35 48 103 50 
Utility model s   
By residents 19 16 18 29 28 4 2 3 2 5 
By non-residents 0 0 1 1 0 0 0 0 0 0 
Total 19 16 19 30 28 4 2 3 2 5 
 
Source: Kenya Industrial Property Institute (2011). 
180. Under the Trade Mark Act, any mark (including names, signatures or words) may be 
registered with KIPI.  Trade mark protection may be obtained through registration or use.  However, 
the authorities encourage registration to avoid c onflict with identical or confusingly similar 
trade marks. 
181. Well-known trade marks are protected under the Ac t.  However, no specific interpretation of 
well-known is provided.  Trade mark registratio ns are possible nationally or internationally 
(Madrid System) (Table III.7). 
Table III.7 
Registration of trade marks 
 Applications (number) Registrations (number) 
Year 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 
By residents 1,228 1,428 1,372 1,675 2,031 1,305 1,073 1,211 1,159 1,360 
By non-residents 691 752 753 778 895 1,410 829 901 840 992 
Total 1,919 2,180 2,125 2,453 2,926 2,715 1,902 2,112 1,999 2,352 
Madrid designations 1,637 1,445 1,719 1,440 1,376 1,637 1,445 1,719 1,440 1,376 
 
Source: Kenya Industrial Property Institute. 
182. Currently, geographical indications (GIs) may be protected as collective marks under the 
Trade Mark Act. Kenya is considering a law to im prove its system for the registration of GIs.  A 
collective mark, "ECHUCHUKA", wa s registered in 2006 for aloe-vera cosmetic products by the 
agricultural community living around Lake Turkana.   Geographical indications (GIs) from other 
countries may also be protected as collec tive marks under the Trade Mark Act. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-215 
 
 
 (b) Copyrights 
183. Under the Copyright Act 2001 (recently renamed Cap 130, Laws of Kenya), KECOBO is in 
charge of administering and enforcing copyright  and related rights in Kenya. KECOBO is an 
autonomous government agency reporting to the St ate Law office. KECOBO is responsible for, 
inter alia , investigations, enforcement, and prosecution of  copyright cases; voluntary registration  of 
copyright works, and licensing and overseeing coll ective management organizations (CMOs) in 
Kenya;  and training and advising the Government and law-enforcement office rs and right-holders.  
Copyright protection in Kenya is not  dependent on registration.  Ho wever, KECOBO maintains a 
databank of authors that apply for voluntary regist ration of copyright works.  The databank has over 
4,000 registrations. 
184. Collective management organizations (CMOs), established under the Copyright Act, are 
corporate agents of copyright owners of musi cal productions and performances, audiovisual 
performances, and book reprography.  The CMO's prin cipal obligations are:  to monitor the use of 
copyright works;  to negotiate the terms of such usage;  to collect royalties and distribute them to 
copyright owners;  and to take legal action in cases of non-payment of royalties.  With some 5,000 
members, the Music Copyright Society of Kenya (M CSK) is the main CMO for authors, composers, 
publishers of music, and musicians in Kenya.  Other CMOs in Kenya include:  Kenya Association of Music Producers, representing music performers;  a nd the reprographic Society of Kenya (KOPIKEN) 
representing publishers and book authors. 
185. Under the Copyright Act, importation of copyright-protected works without the permission of 
the right holder is not allowed.  However, the G overnment or any public library (only not-for-profit 
documentation centers), and scientific institutions may,  in order to serve the public interest, order the 
reproduction of a copyright work. 
(c) Plant variety protection 
186. The Seeds and Plant Varieties Act, Cap 326 of the Laws of Kenya, 1972, governs the 
protection of new plant varieties in Kenya.  Under the Ministry of Agriculture, KEPHIS is in charge 
of administering all issues related to the protection of new plant varieties. 
187. Plant breeder’s rights do not apply to all plant speci es in Kenya.  They are granted, in respect 
of species or groups specified by the Minister in charge of Agriculture, after consulting with all 
interested stakeholders.  Under the Act, the breeder’s right covers the protected variety itself;  varieties that are not clearly distinguishable fro m the protected variety;  and varieties whose 
production requires repeated use of the protected va riety.  However, varieties resulting from modern 
technology are not protected. 
(d) Enforcement 
188. Prior to the enactment of the Anti-Counterfe it Act, in 2008, various government agencies, 
including KECOBO, the KIPI, the KEPHIS, the Attorn ey General's Office, the police, Customs, and 
the judiciary, were involved in the enforcement of IPRs, with limited coordination.  The fight against 
IPRs infringing products was regulated by various laws, and IPR infringement cases could be brought 
before the Industrial Property Tribunal and/or the courts. 
189. Since the previous Review of Kenya, however, the authorities and relevant stakeholders have 
undertaken efforts to eradicate counterfeit and pira cy.  Microsoft and Kenya Copyright Board made WT/TPR/S/271/KEN Trade Policy Review 
Page A2-216 
  
 joint raids on several businesses, suspected of usi ng unlicensed software.  A number of IPR-infringing 
products were confiscated and appropr iate action taken against offenders. 
190. The 2008 Anti-counterfeit Act establishes the An ti-counterfeit Agency.  The Act prohibits 
counterfeiting, trade and all other dealings in counterfeit goods, and has provisions for higher 
penalties for counterfeits and piracy.  The agency wa s formally established in June 2010, and it started 
operations within the Ministry of Industrializati on.  The agency is in charge of coordinating 
organizations involved in combating counterfeiting.  Anti-counterfeit regulations were also issued in 
2010 to deal with the operational aspect of combating counterfeits. 
191. Any administrative or judicial action undertak en to terminate the production of counterfeit 
goods, or to prevent infringement, where it is immine nt, may be initiated by the owner of an IPR, his 
successor, his licensee, or his agen t;  or by the Executive Director of  the Anti-Counterfeit Agency.  In 
the case of imports of counterfeit goods, the right-o wner may apply to the Commissioner of Customs, 
who may decide to seize or detain the goods. 
192. Any infringement of an IPR constitutes a punishable  offence.  For a first offender, there is a 
fine of at least 3-times the value of the prevaili ng retail price of the goods and/or imprisonment for a 
term not exceeding 5 years.  A repeat offender is subject to a fine of at least 5-times the value of the 
prevailing retail price of the goods and/or imprisonment for a term not exceeding 15 years. 
193. Pirated and counterfeited prod ucts in Kenya are mostly imported.  They include 
pharmaceuticals, textile products, cosmetics, electric al and electronic goods, and computer programs. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-217 
 
 
 IV. TRADE POLICIES BY SECTOR 
(1) AGRICULTURE  
(i) Main features 
194. Agriculture (including livestock, forestry, and fisheries) is the backbone of Kenya's economy. 
It provides livelihood for over 80% of the rural popu lation, and accounts for more than 50% of export 
earnings, led by coffee, tea, tobacco, cotton, sisal, pyrethrum, horticulture, and cashew nuts.  Exports 
of fruits, flowers, and vegetables are also increasing in importance.  Beans, cassava, potatoes, maize, 
sorghum, and fruit are harvested mainly as subsis tence crops.  As a consequence of volatile 
production, agriculture's contribution to overall GDP h as been unstable in recent years.  About 84% of 
land in Kenya is arid or semi-arid, and not suita ble for rain-fed farming, due to low and erratic 
rainfall.  However, this land serves for livestock farming, including meat and milk production.  
195. While agriculture registered remarkable gr owth performance in 2005 (6.9 %), output dropped 
dramatically in 2008 (-5.0 %) and 2009 (-1.4 %).  Post -election unrest, together with high input prices 
and low demand for cash crops in the context of the global economic crisis were the main factors behind the poor performance.  In 2010, the sector e xpanded significantly, with real growth of 6.3%.  
This was a consequence of favourable weathe r conditions, and improved prices for some key 
agricultural exports, such as tea and coffee.  Furthermore, government intervention, through its 
National Accelerated Agricultural Inputs Access Prog ramme (NAAIAP), played a significant part, by 
providing free maize seeds (10 kg) and fertilizers (50 kg) to some 100,000 poor farmers.  The 
Government has also provided dr ought resistant seeds, through th e "orphan" crops programme, to 
farmers in the arid and semi-arid areas in orde r to enhance crop production in these areas.  These 
crops include sorghum, millet, cowpeas, green gr am, dry land maize hybrid s, and katumani maize 
seeds. 
196. Kenya's agriculture sector directly influen ces its overall economic performance through its 
contribution to GDP.  Periods of increased agricult ural growth have been associated with high 
economic growth rates.  In additi on, given that most of the vulnera ble groups depend on agriculture as 
their main source of livelihood, agricultural performance is a key to poverty reduction. 
197. The sector is dominated by small-scale farming, which contributes about 75% of the total 
value of agricultural output, and about 85% of total agricultural employment.  There are an estimated 3 million smallholder farms in the country.
62 
198. The agriculture sector faces several challe nges.  Its reliance on rain-fed agriculture, 
compounded by poor irrigation systems (with less th an 7% crop land irrigated), has led to increasing 
episodes of food insecurity in the country.  In add ition, the use of inappropriate technology, due to 
weak linkages between agricultural research bodies a nd farmers, lack of information on suitable 
quality of inputs and their high cost, and poor infrastructure, negatively affects productivity and competitiveness.  
(ii) Policy developments 
199. Public resource allocations to agriculture re main low, at approximately 4.5% of the 
government budget.  Investments and budget allocations to the sector are spelt out in the Strategy for 
Revitalizing Agriculture (SRA 2004-2014), Agricult ural Development Strate gy (ASDS, 2009-2020), 
                                                      
62 KIPPRA (2004). WT/TPR/S/271/KEN Trade Policy Review 
Page A2-218 
  
 and the first Medium-term Plan for Vision 2030, wh ich identifies agriculture as a key sector,  and 
provides for seven flagship proj ects:  land use master plan, irrigation plan, livestock disease-free 
zones, fertilizer cost-reduction project, legal re form, branding of Kenya farming products, and 
improved land governance.  These projects are furthe r elaborated under the ASDS.  The Vision 2030 
Plan and the ASDS were developed to tackle issu es raised when the SRA was reviewed.  According 
to the authorities, all interested stakeholders ar e fully involved in strategy formulation processes, and 
all programmes incorporate a monitoring and evalua tion mechanism.  The primary objective of the 
strategies is to provide a policy and institutional environment that is conducive to increasing agricultural productivity, promoting investment, and encouraging private-sector involvement in 
agricultural enterprises and agri-business
. 
200. The multiplicity of taxes and levies constitutes one of the main constraints to Kenya's 
agriculture.  Since 2006 the various taxation laws a nd regulations in the key agriculture subsectors 
have been under review.  In addition, the issue of taxation was addressed in chapter V of the SRA 
document, which proposed major reforms that woul d encourage investment in agriculture.  Reforms 
have yet to address the numerous and fragmented pi eces of legislation, including on many supporting 
institutions.  The authorities estimate that some 130 acts govern the agriculture sector;  and the 
Agricultural Sector Coordination Unit (ASCU), together with the Parliamentary Committee on 
Agriculture, Livestock, and Fisheries envision condensing these into fewer than 10, without 
undermining their completeness.  
201. Access to credit is expected to improve in so me aspects regards, following aggressive reforms 
in Kenya's financial sector, notably the adoption of legislation on microfinance and a credit 
information-sharing mechanism (section (4)(i)).  Howe ver, the limited use of land as collateral and the 
high risk associated with agricultural activities in  Kenya remain challenges to accessing credit in 
agriculture. 
202. The Agricultural Finance Corporation (AFC), a government-owned financial institution, 
provides short and long-term financ ing to a variety of agricultural operations, mainly dairy, maize, 
wheat farming, and mechanization development. Estimates indicate that only 15% of the funding has 
been used on small-scale farms.  In addition Kenya Livestock Finance Trust is supporting livestock 
enterprises with credit.  
203. The average MFN tariff in agriculture (ISIC Rev.2 definition) is 17.7%, with rates ranging 
from zero to 100%.  On average, th e CET rates are particularly high on dairy products (45.4%), and 
sugar products (39.5%).  During the Uruguay Round,  Kenya bound its tariffs on agricultural products 
(WTO definition) at a ceiling rate of 100%. 
204. Kenya did not grant any export subsidies to ag ricultural products during the review period. 
205. Kenya's new Constitution provides for the revision,  consolidation, and rationalization of the 
large number of land laws that have made the la nd regime more complex than necessary.  In May 
2012, the National Land Commission Act, the Land Ac t, and the Land Registration Act were signed 
into law.  The Land Act is expected to streamline the registration of land titles. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-219 
 
 
 (iii) Selected products 
(a) Crops 
206. In its initial stage, the SRA emphasized revivi ng six crops (i.e. coffee, cotton, pyrethrum, 
cashew nuts, bixa63, and sugar cane);  improving performance of maize, tea, horticulture, wheat, 
potatoes, dairy and beef products, and oilseeds; a nd introducing other high-value crops such as palm 
oil, vanilla, and aloe vera.64  Reforms in this regard include the revision of policies and laws for these 
priority crops.  The related activities are coordina ted through the High Value Crops Division in the 
Ministry in charge of Agriculture.  
Food crops 
207. Food crops consist of cereals (maize, wheat, sorghum, rice, millet); pulses (beans, pigeon pea, 
cowpea, chickpea, green gram);  and roots and tubers  (sweet potato, Irish potato, cassava, arrow root 
and yam).  Food crops account for 32% of agri cultural GDP, but provide only 0.5 % of export 
earnings.  
208. In general, food crop production (mainly maiz e and potatoes) deteriorated between 2007 and 
2010, but improved in 2010, following the overall pa ttern in agriculture.  However, production of 
other food crops, particularly legumes and root crops , has not performed well, due to the combination 
of heavy rains, pests, and diseases, and lack of quality planting material. 
209. The work of the National Cereal and Produ ce Board (NCPB) includes running commercial 
activities, through marketing of grain and agricultural inputs;  maintaining a strategic grain reserve (SGR) stock, of up to four million bags, on behalf of the Government to be used for food security;  
and maintaining famine relief food stocks in deficit areas.  
210. The Kenya Agricultural Commodity Exchange ( KACE), which is a private company, supplies 
information on the availability and prices of a wide range of commodities, and links buyers and sellers 
in domestic and global markets.  The main  activities of KACE include linking farmers and 
mainstreaming buyers.  Modern information comm unication technology has facilitated this, through 
short message service (SMS), interactive voice response (IVR) service, daily radio bulletins, a live 
radio auction service and online computer services.   Trading activities are through competitive bids 
and offers, with KACE acting as a clearing house and a rranging the financial and logistical aspects of 
the sale. 
211. Imports of maize, wheat, sorghum, and millet ar e subject to CET rates of 25%;  and rice 
imports to 75%. 
Cash crops 
212. Kenya's main cash crops are tea, horticulture pr oducts, pyrethrum, coffee, and sugar cane.  
Kenya accounts for 10% of total global tea produc tion and 21% of global tea exports.  The tea 
industry contributes to about 14% of the agricultura l GDP, which is equivalent to 4% of Kenya’s 
GDP.  An estimated 3 million Kenyans derive thei r livelihood from the tea industry.  Currently, tea 
ranks second as a foreign exchange earner after touris m accounting for 26% of total foreign exchange 
earnings.  
                                                      
63 Bixa contains some bixin, which is used as a natural food colour. 
64 Ministry of Agriculture (2004). WT/TPR/S/271/KEN Trade Policy Review 
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 213. Over 80% of Kenya tea is sold through dollar-b ased auctions in Mombasa.  The auctions are 
conducted under the auspices of the East Afri can Tea Trade Association (EATTA), whose 
membership includes brokers, buyers, producers, warehousemen, and packers.  The remaining tea 
production is sold directly through private a rrangements with international tea importers. 
214. The tea industry consists of: estate plantations, with production units larger than 20 ha;  and 
smallholders, with units averaging only 0.25 ha per farmer.  Smallhol ders continue to dominate tea 
production, with 65% of area and about 62% of produ ction, although average productivity is higher in 
large estates, due to better use of t echnology, inputs, and economies of scale.65 
215. The main laws governing the tea industry are the Tea Act, Cap 343, and the Kenya Tea 
Development Authority Order.  The Tea Board of Kenya (TBK) regulates all aspects of tea growing, 
research, manufacture, trade, promotion, and dissemination of information.  It also advises the Government on policy matters, through the Ministry in charge of Agriculture.  The Kenya Tea Development Authority (KTDA) manages 62 tea factories on behalf of farmers, charging a management fee fixed at 2.5 % of the proceeds of total sales.  The Kenya Tea Growers Association (KTGA) was established as a trade union to lobb y for better prices for tea farmers.  Other 
organizations involved are:  the Nyayo Tea Zones De velopment Corporation, a parastatal established 
to manage the tea belts around the forest zones;   the Tea Research Foundation of Kenya (TRFK), the 
technical arm of TBK;  and the Kenya Tea Pack ers (KETEPA), a leading packer in the country. 
216. The TBK collects duties on processed tea deliveries by all registered tea factories, at 
K Sh 0.46 cents per kg of processed tea.  The revenue is used to finance TBK and the TRFK on a 
50/50 basis.  The TBK is mandated to collect an agricultural produce cess on green leaf production on 
behalf of the local authorities where tea is pr oduced, disbursing it to the District Tea Road 
Committees for road infrastructure maintenance.  In addition, several other levies and charges 
continue to apply to tea producers in Kenya (Table IV.1). 
Table IV.1 
Taxes and levies directly or indirectly affecting tea growers  
Levy Collecting agent Level 
Agricultural produce cess Local government  1% of the value of green leaf 
Value-added tax (VAT) Govern ment 16% of sales value 
Corporate tax Government 30% of net profit 
Directorate of Industrial Training levy Directorat e of Industrial Training K sh 300 per employee 
Standards levy Kenya Bureau of Standard s 0.2% of value of processed tea < 
K sh 400,000 
Environmental impact assessment le vy National Environmental Manageme nt Agency 0.1% of investment 
Inspection fee Kenya Plant Health Insp ectorate Service 3,000 per consignment 
Import duty on packaging material Government 25% of the c.i.f. value 
Import declaration fee Government 2.75% of import value 
Furnace oil taxes Government Excise duty of K sh 0.6 per litre and 
16% VAT 
Brokerage fee Tea broker 0.75% of  growers proceeds of processed 
tea 
KTDA management agency fee KTDA 2.5% of net sales 
Land rates and rents 
Ad valorem  levy Local government 
Tea Board 0.3-0.75% of undeveloped value 
1% of custom value of imports and 
exports 
Source: Information provided by the Kenyan authorities. 
                                                      
65 NZuma (2010). EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-221 
 
 
 217. Incentives are available for t ea processing and packaging for export under the manufacturing 
under bond and export processi ng zones programmes (Chapter III(2)(v)).  The import tariff on tea and 
tea products is 25% (up from 15% in 1999), the maximum rate of the CET. 
Coffee 
218. Coffee production declined in  2009 and 2010 as a consequen ce of bad weather conditions 
(cold conditions).  Small-scale farmers, organized into cooperatives, continue to account for the 
majority of coffee production (70% of the total).  Coffee is marketed through computerized auctions at the Nairobi Coffee Exchange, and through direct sa les.  Almost 99% of Kenyan coffee is exported, 
mainly to Europe, particularly Germany and Swed en.  The import tariff on coffee and coffee products 
is 25%, the maximum rate of the CET. 
219. The 2001 Coffee Act provides the legal framework for the subsector.  The Coffee Board of 
Kenya (CBK) is the regulatory body and issues licences to marketing agents, which are legally 
allowed to participate in the co ffee auction.  The Kenya Planters  Cooperative Union (KPCU) is the 
main coffee miller in the country.  However, its dominance has decreased re cently, after the Coffee 
Board licensed nine additional millers (Central Kenya, Nyambene, Thika Coffee, Kofinaf, CMS, 
NKG, Sasini, Gusii, and Kenya Co-operative Coffee Millers Ltd).  Other organizations involved in 
the industry are:  the Coffee Research Foundation (C RF), financed by CBK through a levy on coffee 
proceeds; and the Mild Coffee Trade Association of  East Africa (MCTA), a regional association of 
coffee dealers.  The Government  has recently established a Coffee Development Fund (CoDF) as a 
source of credit to assist coffee growers to improve  their production activities.  According to the 
authorities, CoDF funds are loaned to farmers at an interest rate of 10%.  Funding is mainly provided 
for farm operations geared toward increasing co ffee production and quality, coffee rehabilitation, and 
for coffee processing. 
220. Horticulture is among the leading contributors to  agricultural GDP (at 33%), and continues to 
be the fastest growing subsector.
66  It is the third-largest foreign exchange earner, after tourism and 
tea.  Its export performance increased from K Sh 56.7 billion to K Sh 72.09 billion in 2007 and 2010 
respectively.67  Compared with other agriculture s ubsectors, horticulture has minimal state 
intervention. 
221. Flower production and its marketing chain are dominated by medium-size and large 
companies, which account for some 70% of total expor ted volume.  Smallholders (with an average of 
2-20 ha) face many constraints related to post-ha rvest handling, marketing, and access to capital.  
Around 80% of vegetables and fruit pr oduction is by small-holders. 
222. The Horticultural Crops Development Authorit y (HCDA) is the Government’s regulatory 
agency for the horticultural subsector.  It collect s a registration fee of K Sh 5,000 from dealers 
engaged in horticulture.  In addition, it impo ses various levies and charges on horticulture-related 
activities and products:  an export levy of K Sh 0.30 pe r kg;  an import levy of K Sh 1 per kg;  and a 
nursery registration fee of K Sh 500 for those enga ged in tissue culture propagation.  The Fresh 
Produce Exporters Association of Kenya (FPEAK)  and the Kenya Flower Council (KFC) are in 
charge of, inter alia , organizing export promotion activities;  providing market information on export 
products and their destinations;  and helping thei r members to meet the quality standards of the 
importing countries. 
                                                      
66 Ministry of Agriculture, National Horticulture Policy, Nairobi (2010). 
67 KNBS (2011). WT/TPR/S/271/KEN Trade Policy Review 
Page A2-222 
  
 Sugar 
223. Kenya's sugar sector is dominated by small- scale farmers, who supply over 85 % of the cane 
milled by the sugar companies.  It provides jobs fo r an estimated 12,500 Kenyans in sugar plantations 
and sugar factories.  Some six million Kenyans derive their livelihood directly or indirectly from the 
sugar industry. 
224. Domestic demand for sugar consumption has stead ily increased in recent years, while exports 
have continued to shrink markedly (Table IV.2). 
Table IV.2 
Production and consumption of sugar, 2006-10 
('000 tonnes) 
 2006 2007 2008 2009 2010a 
Production 475.7 520.4 517.7 548.2 523.7 
Consumption 718.4 741.2 751.5 762.0 772.7 
Imports 166.3 230.0 218.6 184.5 258.6 
Exports 13.5 20.8 44.3 2.0 0.1 
Sugar cane production 4,932,839 5,204,214 5,112,040 5,610,702 5,709,586 
Average yield (tonnes/ha) 70.89 70.87 72.94 65.21 63.55 
a Provisional. 
Source:  Kenya Sugar Board. 
225. The sugar industry has several difficulties includi ng lack of regular factory maintenance, poor 
transport infrastructure, and weak corporate governance.   This has led to high costs of production in 
the industry, making it unable to compete at regi onal level.  During the 2008/09 season, the average 
cost of production per tonne of sugar was US$428 in  Kenya, compared with an estimated US$263 for 
its competitors in the region.68  As a result, following the expira tion of the 2008 deadline, Kenya was 
allowed to continue to apply non-preferential ta riffs on sugar from other COMESA members until 
March 2014, to protect the local sugar production. 
226. The 2001 Sugar Act provides the legal framework  for licensing and registration of sugar 
mills, importers, and exporters;  f unding;  the role of stakeholders;  revenue sharing between growers 
and millers;  and dispute resolution.  Under the Ac t, the Kenya Sugar Board is the regulatory body; 
the Act also established the Kenya Sugar Resear ch Foundation (KESREF).  Other organizations 
involved in the industry are:  the Kenya Sugar Manufacturers Association (KESMA), through which 
millers negotiate sugar-cane prices with grower s; the Kenya Sugarcane Growers Association 
(KESGA), through which growers negotiate prices w ith millers;  the Kenya Society of Sugarcane 
Technologists (KSSCT); and the Kenya National S ugarcane Growers and Employers Association 
(KNSGEA).   
227. In July 2005, Kenya unveiled its strategy for re vitalizing the sugar industry.  Some of the key 
measures envisaged are:  review of the 2001 Suga r Act to facilitate the smooth operation of the 
subsector;  appointment of the KSB as the agen t of the Kenya Roads Board for development of 
infrastructure in the sugar zones;  financial restru cturing and privatization of all state-owned sugar 
companies;  and appropriate tax incentives at all le vels to attract new investment.  The Kenya Sugar 
Industry Strategic Plan (2010-2014) aims to give the industry a strategic direction over the Plan's 
                                                      
68 Kenya Sugar Industry Strategic Plan (2010-2014), 2009. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-223 
 
 
 period with the view to increasing the effectiveness a nd efficiency of operations in the sugar industry 
through privatization of operations. 
228. The Sugar Development Fund (SDF) is financed  through a 7% levy on the value of locally 
produced sugar and imports.  The levy is used fo r:  factory rehabilitation (3%);  cane development 
(2%);  infrastructure (1%);  grants to research (0.5%); and KSB administration (0.5%).  It also 
provides grants for KSB and KESREF operations, a nd development of infrastructure.  The Kenya 
Revenue Authority (KRA) collects the levy on behalf of the KSB. 
(b) Livestock 
229. The livestock subsector accounts for 40% of agricu ltural GDP (10% of the overall GDP).  It 
provides substantial foreign exchange through exports of live animals, hides and skins, dairy products, 
and some processed pork products.69  It also employs 50% of the overall agricultural labour force.  
230. Around 30% of Kenyans live in the arid and semi-arid lands, where animal industry provides 
employment for 90% of the labour-force, and live lihoods are livestock-based.  Processing of livestock 
products remains marginal, making it difficult for fa rmers to improve their incomes, and limiting 
employment opportunities. 
231. According to a livestock census, carried out in 2009 alongside the human census, Kenya's 
livestock comprises 29 million birds;  17.4 million ca ttle;  17.1 million sheep;  27.1 million goats;  
2.9 million camels;  1.8 million donkeys;  334,689 pigs;  and 1.8 million occupied bee hives.  Emerging livestock farming in recent years includes the rearing of crocodiles, ostriches, quails, snakes, and frogs, to supply the tourist industry and for export.  
232. The main trade in the subsector comprises liv e animals of various species, meat, dairy 
products, honey, hides, skins, and leather. 
233. Most of the meat is consumed locally.  A nnual exports during the review period averaged 
785 tonnes of beef, 1,500 tonnes of pork, 14 tonnes poultry meat, 26 tonnes of mutton, and 11 tonnes of goat meat.  The main meat export markets are Qatar, United Arab Emirates, and Egypt.  
234. Milk factories are registered with the Kenya Dairy Board (KDB), the regulatory body.  The 
6 major dairy processing plants operate under a licence from the Kenya Dairy Board are:  Kenya 
Cooperative Creameries, Brookside Dairy, Githung uri Dairy Farmers Cooperative Society, Meru 
Central Dairy, Raka Milk Processors, Limuru Milk Processors;  there are also other smaller plants.  
235. Milk production increased significantly in 200 9 (406.5 million litres) and 2010 (515.7 million 
litres), following the high rainfall in milk-producing areas (Table IV.3).  Kenya exports dairy products 
to Europe, the Middle East, and Africa;  long-life (UHT) milk is the leading export.  Most milk is 
consumed in the domestic market:  exports aver aged one million litres per year during the review 
period.  According to the authorities, the National Livestock Policy aims at improving and enforcing compliance with international health and safety measures, strengthening extension services, and 
promoting value addition and marketing. 
236. Hides and skins are subject to e xport taxes (Chapter III(2)(ii)). 
 
                                                      
69 KIPPRA (2010). WT/TPR/S/271/KEN Trade Policy Review 
Page A2-224 
  
 Table IV.3 
Production and sale of livestock and dairy products, 2006-10 
 2006 2007 2008 2009 2010a 
Recorded milk production (mill ion litres) 360.1 423. 1 398.5 406.5 515.7 
P r o c e s s e d  m i l k       
Whole-milk and cream (milli on litres) 225.0 282. 0 262.2 323.1 358.2 
Butter and ghee (tonnes) 1,549.0 1,752.1 1,217.7 1,079.6 1,967.4 
Cheese (tonnes) 243.0 215.0 154.7 187.7 262.2 
Livestock slaughtered ('000 head)      
Cattle and calves 1,911.0 1, 719.9 1,891.9 2, 057.0 1,923.5 
Sheep and goats 4,774.9 5,013.7 5,424.8 5,716.0 6,162.8 
Pigs 176.0 166.7 197.5 221.0 217.2 
a Provisional. 
Source:  Information provided by the Kenyan authorities. 
(c) Fisheries 
237. The fisheries subsector has an important role in Kenya's economy despite its low contribution 
to GDP (0.4% in 2011).  Over 500,000 people are dir ectly or indirectly employed by the subsector, 
with the freshwater fisheries supporting about 35,000 fi shers, and marine fisher ies over 8,000 fishers.  
It also provides foreign exchange earnings of over K Sh 4 billion (approximately US$50 million).  
238. The subsector also supports other auxiliary indu stries, such as net making, packaging material 
industries, boat building, etc.  Fishing activities re main largely artisanal, and on unmechanized fishing 
vessels.  Aquaculture is at a very early stage of de velopment, but there is potential for growth.  Fish 
production from freshwater decreased  steadily during the review period, from 151,711 tonnes in 2006 
to 135,784 tonnes in 2010, while marine fish production rose from 6,023 tonnes to 7,600 tonnes during the period (Table IV.4) 
239. The Fisheries Act of 1989, and its subsequent 19 91 revision, governs all fisheries activities in 
Kenya.  A person in possession of a fishing vessel must have a valid fishing license.  The vessel must 
also meet local fishing vessel requirements. 
240. Freshwater fishing (which accounts for some 90% of Kenya's annual fish production) and 
marine fishing supply the domestic and international markets.  The local market, which has a strong 
preference for tilapia, is served through artisanal fish eries.  Fish enters the market in various forms 
including frozen, chilled, dried, smoked, and deep-fried .  Nile perch, mainly from Lake Victoria, is 
the dominant species for export, accounting for about 90% in volume and value of Kenya’s total fish 
exports.  Some marine fish products, such as crus taceans (lobsters, prawns, crabs, and fresh-water 
crayfish) and molluscs (octopus and squid) are also exported. 
241. The EU is the main export market, and to f acilitate access to this market, Kenya has taken 
steps to meet EU standards.  The last EU inspect ors' mission to Kenya noted, among other issues, the 
need to improve the conditions of artisanal fishing an d the fish landing sites;  update the Kenyan food 
standards to take into consideration EU standa rds on heavy metal contaminants;  and undertake 
regular inspection of fish-processing establishmen ts, fish landing sites, and fish markets. 
242. Kenya has diversified its fish export markets,  which now include Israel, Japan, Australia, 
China, U.S. Canada, and some African countries (Table IV.5). EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-225 
 
 
 Table IV.4 
Fish production, 2006-10 
 2006 2007 2008 2009 2010a 
Quantity (Tonnes) 
Freshwater fish      
Lake Victoria 143,908 117,231 111,369 108,934 113,041 
Lake Turkana 4,559 5,122 8,070 9,445 8,123 
Lake Naivasha 189 203 225 688 693 
Lake Baringo 68 173 262 191 198 
Lake Jipe 109 96 109 109 111 
Tana river dams 1,024 1,112 1,302 584 596 
Fish farming 1,012 4,245 4,452 4,895 12,153 
Other areas 842 706 883 828 869 
Total 151,711 128,888 126,672 125,674 135,784 
Marine fish 6,023 6,355 7,561 7,024 7,600 
Crustaceans 436 618  578 407 549 
Other marine products 500 494 597 495 572 
Total 158,670 136,355 135,408 133,600 144,505 
Value (K Sh'000) 
Freshwater fish 8,071 8,029 10,718 12,274 16,905 
Marine fish 335 422 541 557 614 
Crustaceans 123 145  147 127 173 
Other marine products 38 43 49 44 50 
Total 8,567 8,640 11,455 13,002 17,742 
a Provisional. 
Source:  Information provided by the Kenyan authorities. 
243. The Kenya Fish Processors and Exporters Asso ciation (AFIPEK) deals with Government and 
international bodies on fish quality matters, enforc ement of international code of practice for 
processing of fish and promotion of fish and fishery products in the export markets. 
Table IV.5 
Exports of fresh and frozen fish 
(K Sh '000)  
Country 2006 2007 2008 2009 2010 2011 
EU 1,724,098 1,941,762 1,508,721 1,299,617 1,579,409 1,457,730 
Israel 770,831 879,461 1,220,342 1,459,681 1,379,164 1,292,512 
U.A.E 107,784 153,188 142,194 127,034 153,131 121,758 
Australia 224,279 131,284 164,647 125,733 115,788 110,793 
United States 194,345 157,391 121,727 25,163 40,083 22,156 
Others 371,929 253,261 208,625 111,080 301,511 188,200 
Total 3,393,266 3,516,347 3,366,256 3,148,308 3,529,003 3,193,149 
 
Source: Information provided by the Kenyan authorities. 
244. In general, imports of fish and fish pr oducts are subject to a tariff rate of 25%. 
245. The Government's support measures for fishing activ ities aim to ensure food security.  During 
2009/10, the Government provided assistance to small-scale fish farming through  the Economic 
Stimulus Programme (ESP). Other support programmes include the Fish Farming Enterprise and Productivity Programme (FFE& PP), a nd government programmes to improve fish landing sites and 
fish auction centers. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-226 
  
 (d) Forestry 
246. 6.1% of Kenya's land surface (3,467,000 ha) is forested;  18.9% (654,000 ha) is classified as 
primary forest.  Kenya's deforestation rate is 0.32% per year.  Between 1990 and 2010, Kenya lost 
6.5% of its forest cover (around 241,000 ha).  The key drivers of deforestation and forest degradation 
include poor and uncoordinated policies;  agricultu ral expansion;  and logging and energy needs. 
247. Forest plantation stocking increased margin ally between 2006 and 2010, from 110.5 hectares 
to 111.8 (Table IV.6).  This is attributed to additional funding received thro ugh the Kazi Kwa Vijana 
programme, a government initiative aimed at providi ng jobs for young people in forest plantation 
activities. 
Table IV.6 
Forest products, 2006-10 
 2006 2007 2008 2009 2010a 
Forest plantation area ('000 hectares)  110.5 112.3 114.0 112.7 111.8 
Recorded sales      
  Timber ('000 true m3)      
    Softwood 448.2 423.4 503.7 347.0 401.2 
    Hardwood .. .. .. 12.7 19.3 
Stacked ('000 m3)      
    Fuelwood/charcoal 44.0 27.7 28.8 0.9 60.3 
    Power and telegraph poles 0.5 3.3 0.0 2.0 9.6 
 
.. Not available. 
 a Provisional. 
 
Source:  Information provided by the Kenyan authorities.  
248. The Ministry of Forestry and Wildlife is re sponsible for forestry policy formulation and 
implementation.  The Kenya Forest Service is the public institution in charge of developing 
sustainable management of forest resources through, inter alia , strengthening the institutional, 
regulatory, and governance framework;  enhancing the integrated rehabilitation and conservation of 
degraded natural resources;  mainstreaming commun ity and stakeholders par ticipation in protecting, 
conserving and managing of forestry;  strengthening research in the forestry sector;  improving the 
productivity, and sustainable use of forestry resour ces;  and contributing to the livelihoods of local 
communities. 
249. MFN tariffs on forestry products average 4.4%, with rates ranging up to 10%.  As regards 
protection measures, exports of timber from indigenous tree species is prohibited. 
(2) MANUFACTURING  
250. Kenya's manufacturing sector is the main contri butor to national industrial production, with 
66 % of industrial GDP in 2010, surpassing by far building and construction (30%), and mining and 
quarrying (4%).  
251. Growth performance in manufacturing was mixed during the review period.  While growth 
was at rate of 6.2 % in 2007, it fell to 3.6% in 2008, and to 2% in 2009.  Inad equate raw materials and 
high production costs are the main cau ses of the sector's poor performance70, and competition from 
                                                      
70 KIPPRA (2010).  EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-227 
 
 
 cheap imports and counterfeited goods remains a serious challenge.  In 2010, manufacturing 
rebounded, with growth of 7%, due to a strong e xpansion in food processing,  beverages and tobacco, 
as well as cement production.  Manufacturing output (captured through the Index of Manufacturing 
Production) increased by 2%, from 375.7 in 2009 to 383.4 in 2010 (Table IV.7).  According to the 
authorities, a slight decline in manufacturing GDP growth was observed in 2011(3.3%) due to a 
depreciating Kenya shilling, which increased the cost of imported intermediate inputs, and 
unfavourable weather conditions, which led to reduced  availability of raw materials for agri-based 
industries. 
Table IV.7 
Manufacturing production index, 2006-10 
Industry 2006 2007 2008a 2009a 2010b 
Meat and dairy products 125.3 154.8 142.9 178.2 198.8 
Canned vegetables, fish, oils, and fats 556.0 680.5 649.7 680.1 690.7 
Grain mills products 253.6 246.9 244. 9 257.5 301.5 
Bakery products 212.8 204.6 194.6 207.0 225.2 
Sugar and confectionery  232.4 251.3 248.6 264.8 253.3 
Miscellaneous foods 257.6 295.4 277.2 254.6 317.7 
Food manufacturing 239.0 269.2 258.8 269.7 293.0 
Beverages  259.5 314.7 335.1 322.2 329.3 
Tobacco  273.5 324. 8 323.9 293.1 323.9 
Beverages and tobacco 263.8 319.0 337. 0 321.5 332.9 
Textiles 102.3 104. 1 97.9 78.6 81.4 
Clothing 379.1 396.6 428.4 328.5 350.1 
Leather and footwear 124.4 124.1 126.3 210.9 225.1 
Wood and cork products 39.2 39.5 44.2 37.8 44.2 
Furniture and fixtures 58.1 58.7 64.0 66.2 68.0 
Paper and paper products 414.2 403.4 522.6 247.9 156.3 
Printing and publishing 286.8 295.1 240.7 123.8 64.3 
Basic industrial chemicals 108.8 78.2 52.2 50.7 52.3 
Petroleum and other chemicals 1,027.0 1237.3 1323.2 1440.7 1496.7 
Rubber products 816.5 725.8 558.3 640.5 611.2 
Plastic products  1,656.3 1,674.8 1,513.9 2,063.4 2,108.6 
Clay and glass products 1,836.1 1,791.9 1,751.6 1,748.2 1,707.0 
Non-metallic mineral produc ts 222.2 237.0 347.6 394.1 428.0 
Metallic products  282. 1 314.5 320.6 345.8 378.8 
Non-electrical machinery 90.0 83.0 74.1 77.3 78.3 
Electrical equipment 245.5 180.2 140.5 134.9 132.1 
Transport equipment  1,281.7 1,309.9 1,106.7 1,047.4 1,079.0 
Miscellaneous manufactures 1,442.6 1,412.7 1,811.1 3,094.0 5,160.4 
Total manufacturing 353.3 378.4 376.5 375.7 383.4 
a Revised. 
b Provisional. 
Source:  Information provided by the Kenyan authorities. 
252. The food-processing subsector has the highest value-addition (approximately 25%).  
However, in terms of FDI, the subsector attracts less than petroleum and chemicals, clothing, and 
electrical machinery. 
253. The leather subsector has performed well since 2006, partly as a result of the export tax on 
hide and skins (Chapter III(2)(ii)).  Estimates i ndicate that 13 tanneries were in operation in 2009, up 
from 9 in 2005, and operating capacity improved from about 30% in 2003/04 to around 70% in 
2007/08.  The number of small-scale cottage industri es, which provide employment for thousands of WT/TPR/S/271/KEN Trade Policy Review 
Page A2-228 
  
 small-scale workers, and produce leather goods or fo otwear, also increased, from 17 in 2005 to 24 in 
2008.  The leather subsector employs 1,000 work ers directly and 6,000 others indirectly.71 
254. The electrical and electronics industry remains narrow.  Production includes mechanical 
appliances;  electrical machinery, equipment and pa rts;  and television, image, and sound recorders 
and reproducers.  
255. An expanding informal sector is heavily in volved in small-scale manufacturing of household 
goods, motor-vehicle parts, and farm tools.  
256. Incentive schemes available for manufacturi ng industries include: the export processing 
zones, the manufacturing-under-bond programme, a nd the duty remission scheme (Chapter III(3)(i)). 
The Export Promotion Council (EPC) promotes Kenya's  manufactures, including textiles and clothing 
and commercial crafts (Chapter III(2)(v)). 
257. In 2007, a study was commissioned jointly by the governments of Kenya and Japan, to 
establish a masterplan for Kenya's industrial deve lopment.  The masterplan highlighted weak 
coordination of ministries involved in industrial deve lopment; poor infrastructure (shortfalls in power 
and water supplies, telecommunication, roads and ra il, and port facilities);  high interest rates, and 
barely accessible financial services for SMEs;  inade quate managerial, technical, and entrepreneurial 
skills;  and unfair competition due to counterfeiters.  In addition, the plan called for the creation of the 
Kenya Industrial Development Platform (KIDEP), wh ich would promote internal innovation, through 
effective networking for supportin g institutions and manufacturers.  KIDEP has not yet been 
established.  However, the one village one product (OVOP) concept articulated in the masterplan has 
been rolled-out in 11 pilot regions (Nyeri North, Laikipia West, Yatta, Garissa, Isiolo, Nandi East, 
Vihiga, West Pokot, Bomet, Kwale, and Kisii). 
258. Development strategies, targeting subsectors w ith high potential, in terms of strengthening 
industrial linkages and competitiveness , were considered in Kenya's industrial master plan:  agri-
processing, agri-machinery, and electrics, electroni cs, and ICT subsector were selected for specific 
policy interventions.  
259. A substantial share of Kenya's manufactured e xports goes to the regional EAC market.  The 
U.S. market is the destination for textile s and garments exports under the AGOA.  
260. A National Industrialization Policy (NIP) was fo rmulated but not yet officially adopted, 
recognizes the role of an emerging regional market and the need to harmonize policy interventions at 
the regional level.  In all, some 22 subsectors were  identified for priority interventions including the 
steel and iron industries, construction, mining, pha rmaceutical industries, leather, packaging, and 
newer areas such as nanotechnology and green energy. 
                                                      
71 Online information.  Viewed at:  ww w.kam.co.ke.  (Update based on the Economic Survey, 2012 .) EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-229 
 
 
 (3) MINING , QUARRYING , AND ENERGY  
(i) Mining and quarrying 
261. Kenya's mining industry is relatively small,  accounting for less than 1% of GDP 
(Chapter I(1)).  Soda ash, fluorspar, kaolin, and gypsum constitute the main industrial minerals. 
262. The value of exports of the main mineral products fell in 2009, but rebounded in 2010 and 
2011 (Table IV.8), boosted by increasing export prices. 
263. Recently initiated mining projects include the Kwale Hill heavy mineral sands project, gold 
mining at Kilimapesa in Trans-mara; Cortec mining co mpany intends to mine rare earth elements at 
murima hills in Kwale County.  In addition, the Bumbo base-metal project has identified, through 
prospection, significant potential reserves of gold, as well as copper, lead, and zinc. 
Table IV.8 
Quantity and value of mineral exports, 2006-11 
(K Sh million) 
2006 2007 2008 2009 2010 2011 
Mineral 
Soda ash 4,026 3,937 7,214 5,086 6,215 6,673 
Gold 583 3,922 592 2,283 6,216 5,650 
Fluorspar 1,155 995 1,949 122 789 3,984 
Diatomite 7 8 3 13 8 14 
Crushed refined soda 35 430 321  140 98 26 
Salt (Magadi) 6 15 12  6 4 30 
Carbon dioxide  118 127 117  120 32 .. 
Gemstones 240 199 178 141 226 230 
Iron ore .. .. .. .. .. 649 
Other minerals 90 409 63  40 55 216 
TOTAL 6,265 10,047 10,453 7,956 13,647 17,477 
 
..Not available. 
 
Source: Information provided by the Kenyan authorities. 
264. Mining activities are regulated through the Mining  Act, Cap 306 of 1940;  mineral oils are not 
covered by the Act.  The Mines and Geological Depart ment in the Ministry in charge of Environment 
and Mineral Resources is responsib le for regulating the industry. 
265. All mineral resources in Kenya are owned by the State.  Mining licences are issued by the 
Commissioner of Mines and Geology against the paym ent of fees (Table IV.9).  Licences are valid for 
one year, and are renewable. 
266. A new Bill, the Mining and Mineral Bill 2011, is under consideration.  Under the Bill, 
prospective licences will have an initial duration of four years, renewable for up to seven years.  The 
Government is devel oping a new mining and mineral policy, but no information is available regarding 
the policy's objectives. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-230 
  
 Table IV.9 
Mining licences, 2011 
Licence name and rights conferred Statute Period issued Annual fee (K Sh) 
Prospecting Right:  to identify potential minerali zed areas Mining Act (Cap 306) One year  250 
Protection Notice:  to prospect within 500 m radius of the 
production area Mining Act (Cap 306) 30 days, renewable up 
to a maximum of 
180 days 10 to 50 
Certificate of Registration of l ode location:  to prospect for 
mineral deposits within a specified area;  limited mining 
also allowed Mining Act (Cap 306) One year, renewable 100 to 1,000 
depending on the 
number of claims (size) 
Certificate of Registration of an alluvial location:  to 
prospect for alluvial mineral deposits;  limited mining allowed Mining Act (Cap 306) One year 100 to 1,000 
depending on the number of claims 
(size) 
Exclusive Prospecting Licence:  to carry out detailed 
geological investigations to qua ntify mineral deposits within 
a specified licensed area Mining Act (Cap 306) One year, renewable 
up to a maximum of 
five years  205/km2, subject to a 
minimum of 10,000 
Special Licence:  to carry out detailed geological investigations to quantify mineral deposits under difficult 
areas/conditions that require special treatment (conditions) 
in a specific licence area Mining Act (Cap 306) A minimum of two 
years, renewable 205/km
2, subject to a 
minimum of 10,000 
Mining Lease:  to mine the mineral deposits established 
under preceding exploration licences over a specific area Mining Act (Cap 306) Five to 21 years, 
renewable 150/hectare 
Special Mining Lease:  to mine the established mineral 
deposits under special conditions in consideration of foreseen mining difficulties Mining Act (Cap 306) Five to 21 years, 
renewable 150/hectare or special 
rent  
Mineral Dealers Licence:  to trade in minerals;  buy and sell locally or export Mining Act (Cap 306) One calendar year 
(expires on 31 December) 20,000 
Minerals Export Permit:  to export a particular mineral 
consignment Mining Act (Cap 306) Per consignment valid 
for 14 days  Free 
Dealers Licence for Unwrought Precious Metal:  for local 
dealing in gold, silver, and platinum group of metals Trading in 
Unwrought Precious 
Metal Act (Cap 309) Calendar year 20,000 
Special Dealers/Exporters Li cence for Unwrought Precious 
Metals:  for local dealing and export of precious metals 
(gold, silver, and platinum group) Trading in 
Unwrought Precious 
Metals Act (Cap 309) Calendar year 350,000 
Export Permit (certificate) for Unwrought Precious Metals:  
to export a particular consignment of precious metals Trade in Unwrought 
Precious Metal Act 
(Cap 309) Per consignment  Free  
Dealers Licence for Diamonds:  for local dealing in 
diamonds Diamond Industry 
Protection Act 
(Cap 310) Calendar year 20,000 
Import Permit (declaration certificate) for Unwrought 
Precious Metals:  authority to import unwrought precious 
metals Trading in 
Unwrought Precious 
Metal Act (Cap 309) Per consignment Free  
Special Dealers/Exporters Licen ce for Diamonds:  for local 
dealing in diamonds Diamond Industry 
Protection Act 
(Cap 310) Calendar year 250,000 
Export Permits for Diamonds:  export of particular diamond 
consignment Diamond Industry 
Protection Act 
(Cap 310) Per consignment Free 
Import Permits for Diamonds:  import of diamond 
consignment Diamond Industry 
Protection Act 
(Cap 310) Per consignment  Free  
 
Source: Information provided by the Kenyan authorities. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-231 
 
 
 (ii) Energy 
267. Since 2006, total energy consumption has increased steadily in Kenya (Table IV.10).  Higher 
demand for coke and coal, along with increased ge neration of hydropower, and high consumption of 
petroleum products were the main drivers. 
Table IV.10 
Production, trade, and consumption of energy, 2006-10 
('000 tonnes of oil equivalent) 
 2006 2007 2008 2009 2010a 
Coal and coke consumption 119.7 109.5 108.8 94.6 165.2 
Imports of crude oil 1,643.2 1,598.7 1,773.3 1,627.9 1,551.5 
Net exports of petroleum 1,264.7 1,836.0 1,902.8 2,565.6 2,662.8 
Stock changes and balancing items  130.3 -312.9 -543.0 -582-7 -492.2 
Total consumption of liquid fuels 3,038.2 3,121.8 3,133.1 3,610.8 3,722.1 
Hydro and geothermal energy      
Local production of hydropower 260.1 308.8 280.9 182.4 269.9 
Local production of geothermal  power 89.9 85.0 89.3 111.2 90.9 
Imports of hydropower 0.9 1.9 2.1 3.3 2.6 
Total consumption of hydro and geot hermal energy 350.9 395.7 372.3 296.9 363.4 
Total local energy production 350.0 393.8 370.2 293.6 357.4 
Total net imports 499.1 -125.9 -18.6 -839.8 -943.5 
Total energy consumption 3,508.8 3,627.0 3,614.2 4,002.3 4,250.7 
Local production as percentage of total 10.0 10.9 10.2 7.3 8.4 
Per capita consumption in kg of oil equivalentb 97.2 97.5 97.5 94.4 107.3 
 
a Provisional. 
b Revised series. 
 
Source: Kenya National Bureau of Statistics. 
268. The energy sector is regulated through the Sessional Paper No.4 of 2004, and the Energy Act 
No.12 of 2006.  The Ministry in charge of Energy is responsible for the overall coordination of the 
sector, as well as formulation and coordination of energy policies.  The Energy Regulatory 
Commission (ERC) is an independent sector regulat ory agency established under the Energy Act, 
2006, with responsibility for economic  and technical regulation of el ectrical power, renewable energy, 
and the down-stream petroleum subsector, including tariff setting and review, licensing, enforcement, 
dispute settlement, and approval of power-purchas e and network-service contracts.  The Energy 
Tribunal, which began operating in July 2007, arbitrates disputes within the sector . 
269. Kenya's aim for energy development is a reliable and self-sufficient energy system that can 
provide equitable access to quality energy services throughout Kenya by, inter alia , exploiting the 
country's hydropower potential, enhancing the tr ansmission and distribution systems, attracting 
private investors, lowering costs of productio n, and increasing exploitation of indigenous  energy 
resources, while protecting the environment.  Accordi ng to the authorities, a draft energy policy is at 
the stakeholders discussion stage. 
(a) Electricity 
270. Kenya's main sources of electricity genera tion are hydro, diesel thermal plants, and 
geothermal plants.  In addition, there is gene ration from biomass, wind, and small hydro plants 
(Table IV.11). WT/TPR/S/271/KEN Trade Policy Review 
Page A2-232 
  
 Table IV.11 
Main sources of electricity generation 
Category Capacity installed (MW) % Effective % 
Large hydro 749.2 48.5 732.2 51.2 
Small hydro 15.3 1.0 12.8 0.9 
Geothermal 198 12.9 189 13.2 
Co-generation (biomass) 26 1.7 26 1.8 
Wind 5.1 0.3 5.1 0.4 
Thermal (fossil) 525 34.3 448 31.4 
Off grid (fossil) 18.0 1.2 15.6 1.1 
Total 1,531 100 1,429 100 
 
Source:  Information provided by the Kenyan authorities. 
271. Kenya Electricity Generating Company (KenGen)  provides over 80% of the effective national 
electricity generation;  the balance is provided by  six private independent power producers (IPPs).  
KenGen is 70% government owned. 
272. Transmission of electrical power is through Kenya Electricity Transmission Company 
Limited (KETRACO), government-owned company responsible for devel opment of the national 
transmission grid network.  It is also respons ible for facilitating regional power trade through its 
transmission network. Kenya Power and Lighti ng Company (KPLC), a state corporation, is 
responsible for electricity distribution.  It pur chases power in bulk from KenGen and the six IPPs, 
through bilateral contracts or power purchase ag reements (PPAs) approved by the ERC.  While 
electricity generation is open to competition, its  transmission and distribution functions are under 
monopoly. 
273. The Rural Electrification Authority (REA) is ma ndated to implement the rural electrification 
programme, with a special focus on promoting renewable energy sources.  The Geothermal Development Company (GDC) is in charge of explo iting the geothermal energy potential.  The Kenya 
Electricity Transmission Company (Ketraco) deals with the development of new transmission lines. 
274. Companies, such as James Finlay, Sotik Tea Co mpany, Sotik Highlands Tea Estate, Oserian 
Development Company, Pan African Paper Mills, Unilever Tea Kenya Ltd and Tiomin, are licensed 
to generate electrical energy for their own use.  
275. Electricity costs in Kenya remain relativel y high, due to the high operating costs of 
inadequate generation and distribution facilities.  Frequent droughts also affect hydro-electric power 
output, and cause severe shortfalls in electricity, resulting in widespread rationing across the country.  The base rate per kWh for domestic electricity is K Sh 2 for electricity consumption up to 50kWh;  
K Sh 8.10 for 50 to 1,500 kWh;  and K Sh 18.57 for usage above 1,500 kWh (Table IV.12).  
Commercial electricity tariffs are remarkably high in Kenya;  high electricity consumers subsidize the low consumers. 
276. The tariffs, for domestic and commercial electricity  consumptions, were last adjusted in July 
2008.  In general, each tariff consists of a fixed ch arge equivalent to meter rent, and for industrial 
customers, a demand charge based on average power requirement;  a fuel cost charge (based on the 
cost of fuel purchased by KenGen during the month of billing);  foreign exchange rate fluctuation 
adjustment applied per kWh of consumption; infla tion adjustment applied per kWh of consumption; 
Energy Regulatory Commission levy (fixed at K Sh 0.3 kWh);  Rural Electrification Programme levy (fixed at 5% of the base rate);  and 12% VAT applied on the base rate, including all previous 
surcharges. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-233 
 
 
 Table IV.12 
Electricity tariff structure in Kenya 
Type of 
customer/voltage  Fixed charge 
(K Sh/month) Consumption 
(kWh/month) Energy charge 
(K Sh/kWh) Demand charge 
(K Sh/kVA/month 
Domestic 
(240 or 415)  120.00 0-50 
51-1,500 
> 1,500 2.00 
8.10 
18.57  
n.a 
Small commercial 
(240 or 415)  120.00 ≤ 15,000 8.96 n.a 
(415-3 phase) 
Commercial/industrial  800.00  
> 15,000 
no limit 5.75 600.00 
11,000 2,500.00 4.73 400.00 
33,000/40,000 2,900.00 4.49 200.00 
66,000 4,200.00 4.25 170.00 
132,000 11,000.00 4.10 170.00 
Interruptible off-peak 
supplies  
240 or 415 240.00 when 
used with DC or 
SC  
≤ 15,000 4.85  
n.a 
Street lighting 240 120.00 - 7.50 n.a 
 
n.a. Not applicable. 
 
Note: DC = domestic consumers.  SC = Small commercial.  
Source:  Energy Regulating Commission. 
277. Electric power consumption per capita decreased  from 149 kWh in 2007, to 147kWh in 2009, 
far below that in middle-income and sub-Saharan Africa economies.  National access to electricity is 
12%. 
(b) Petroleum and gas 
278. Kenya imports all its petroleum requirements , as crude oil or refined fuel products.  
Consumption of petroleum products increased from 3.13 million tonnes in 2006 to 3.95 million tonnes 
in 2010 (Table IV.13). 
279. Kenya's only petroleum refinery is working with  obsolete technology.  As a consequence, 
while its initial capacity was set at 4 million tonnes of crude oil, current throughput is only 1.6 million 
tonnes. 
280. About 90% of Kenya's crude oil imports are Murban crude oil from Abu Dhabi.  Its landed 
cost consists of the f.o.b. and freight costs;  0.105%  of the f.o.b. cost for marine and war insurances;  
2.75% of the f.o.b. cost for the import declaration form  (IDF) fee;  0.85% of the f.o.b. cost for letter of 
credit charges;  0.5% of the f.o.b. cost for ocean  loss allowance (for losses not covered by insurance);  
US$1.50 /MT port handling fee;  and a K Sh 1.50 /MT VAT discharge Inspection fee. 
281. The Petroleum Energy Department under the Ministry in charge of Energy is involved in 
upstream and downstream activities of the oil and gas industry. 
282. Petroleum industry operations are concentrated in the downstream segment, as the upstream 
industry, which includes exploration and production of  oil, is almost non-existent.  Despite aggressive 
reform measures, during the last decade, the Govern ment maintains significant interventions in the 
industry.  WT/TPR/S/271/KEN Trade Policy Review 
Page A2-234 
  
 Table IV.13 
Petroleum supply and demand, 2006-10 
('000 tonnes) 
 2006 2007 2008 2009 2010a 
D e m a n d       
  Liquefied petroleum gas 64.6 77.4 84.4 74.6 87.8 
  Motor spirit (premium and regular) 358.2 367.1 381.3 461.7 597.2 
  Aviation spirit 2.0 2.2 2.5 1.4 2.5 
  Jet/turbo fuel 593. 3 638.5 559.2 570.9 539.6 
  Illuminating kerosene 279.2 265.2 244.7 332.8 316.0 
  Light diesel oil 1,035.8 1,116.5 1,141.1 1,416.6 1,517.3 
  Heavy diesel oil 40.7 40.1 30.0 23.9 25.0 
  Fuel oil 664.6 614.8 690.0 729.4 680.3 
  Total 3,038.2 3,121.8 3,133.2 3,610.8 3,765.7 
Refinery usage 93.3 96.5 149.9 171.5 183.9 
Total domestic demand 3,131.5 3,218.3 3,283.1 3,782.3 3,949.6 
Export of petroleum fuels 44.7 67.4 19.2 20.7 29.4 
  Total demandb 3,176.2 3,285.7 3,302.3 3,803.0 3,979.0 
Supply      
  Imports      
    Crude oil 1,643.2 1,598.7 1,733.3 1,627.9 1,551.5 
    Petroleum fuels 1,402.7 1,999.9 1,704.5 2,259.0 2,071.9 
    Total 3,045.9 3,598.6 3,477.8 3,886.9 3,623.4 
Adjustmentb 130.3 -312.9 -175.5 -83.9 355.7 
Total supply 3,176.2 3,285. 7 3,302.3 3, 803.0 3,979.1 
a Provisional. 
b Adjustment for inventory changes and losses in production. 
Source:  Information provided by the Kenyan authorities. 
283. Following reforms in the petroleum sector numerous oil marketing companies (OMCs) are 
involved in importation, exportation, wholesale, di stribution, and retail activities.  Currently 53 
licensed companies are allowed to import and 1 67 companies are licensed to market petroleum 
products in Kenya.  The Ministry in charge of En ergy invites separate tenders from licensed importers 
for the importation of crude oil and refined pr oducts.  The licensing requirements for importers, 
exporters, wholesalers, and distributors depend on the nature and value of businesses, areas of 
operations, estimated volume of throug hput, and proof of product sources.  
284. The Kenya Petroleum Refineries Ltd (KPRL) is  co-owned by the Government and Essar 
Kenya Ltd, a private company.  Under the Mini stry in charge of Energy, the Kenya Pipeline 
Company, which is wholly owned by the Government , is responsible for the transportation, storage, 
and loading of some 90% of refined petroleum pr oducts.  The National Oil Corporation of Kenya, 
also wholly owned by the Government, participates in  all aspects of the petroleum industry.  Its roles 
range from exploration to marketi ng of imported petroleum products. 
285. In 2008, the Energy Regulatory Commission (ERC) developed the petroleum pricing 
regulations in order to stabilize petroleum prices in the retail market, and contain inflationary 
pressures.  The Petroleum Pricing Regulations were published in the Gazette  in December 2010, 
(Chapter III(3)(ii)). 
286. The aim of the petroleum market deregulation was to reduce petroleum prices for end-users 
through a competitive market environment.  Accordi ng to the authorities, this has not happened due to 
the global increase in oil prices. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-235 
 
 
 287. The final landed cost of refined petroleum produc ts consists of the f.o.b. and freight costs; 
0.105% of the f.o.b. cost for marine and war insu rances;  2.75% of the f.o.b. cost for the import 
declaration form (IDF) fee;  1.2% of the f.o.b. cost for letter of credit charges;  0.5% of the f.o.b. cost 
for ocean loss allowance;  and a US$2.50/MT port handling fee. 
288. In order to ensure short-term supply of petroleum products in case of disruption of supply, a 
minimum operational stock must be maintained by  all importers of petrol eum products intended for 
use in Kenya.  The minimum operational stock rang es from 25 days of consumption for heavy fuel oil 
to 15 days for liquefied petroleum gas.72  A petroleum strategic stock, with an optimal level equivalent 
to 90 days' consumption, is set to be procured by  the National Oil Corporation of Kenya, and stored 
by the Kenyan Pipeline Company Limited.73  This is intended to, inter alia , ensure continuity of 
supply in case of disruption of supply, and stabilize domestic prices of petroleum. 
(4) SERVICES  
289. The services sector continues to be the bac kbone of the Kenyan economy (Chapter I(1)). 
Tourism, transport, and communication are the main  industries.  Four of the six priority sectors 
identified as crucial in attaining Kenya's Vision 2030 objectives are service subsectors (tourism, 
wholesale and retail trade, business process outsourcing, and financial services). 
290. Kenya has a positive balance in services trade, a nd its surplus has been increasing since 2006.  
However, local sales through foreign affiliates remain  the main source of international transactions. 
Substantial constraints continue to  impede a full and inclusive expa nsion of international trade in 
services.  These include limited services supply cap acity;  inadequate regulatory framework;  the 
absence of a national trade in services policy;  interna tional trade barriers;  and an inability to translate 
regulatory frameworks into GATS language.74 
291. Kenya has potential to increase its services expor ts within East Africa, mainly through its 
relatively well-developed financial system, and tran sportation services.  In addition, its geographical 
location provides it with a unique opportunity to provide maritime services to its landlocked 
neighbours.  The EAC Common Market Protocol iden tifies financial services, tourism, education, 
communication, transport, distribution, and business services as sectors to be liberalized by 2015. 
292. Kenya's commitments under the GATS did not change over the review period.  It maintains 
specific commitments in five services sectors:  communication, financial services, tourism and travel-related services, transport services, and other services (meteorological data information).  It also has 
horizontal commitments in commercial presence and m ovement of natural pers on, with limitations 
covering market access for commercial presence, requir ing foreign service providers to incorporate or 
establish the business locally.  Horizontal limitations also cover the entry and temporary stay of natural persons employed in management a nd expert jobs.  The employment of  foreign natural persons must be 
agreed upon by the contracting partie s and approved by the Government.
75 
                                                      
72 The Energy (Minimum Operational Stock) Regulations, 2008, Nairobi. 
73 The Energy (Petroleum Strategic Stock) Regulations, 2008, Nairobi. 
74 East African Business Council, Trade in Services negotiations, and the Private Sector, 2009, Arusha, 
Tanzania. 
75 GATS/SC/47, 15 April 1994. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-236 
  
 (i) Financial services 
293. The financial sector in Kenya comprises a cap ital market; banking and microfinance services, 
including microfinance institutions (MFIs), and sav ing and credit cooperatives (SACCOs);  pensions;  
and insurance services.  Regulation and supervisi on are by independent regulators:  the Capital 
Markets Authority (CMA), the Central Bank of Kenya (CBK), the SACCO Societies Regulatory 
Authority (SASRA), the Retirement Benefits Au thority (RBA), and the Insurance Regulatory 
Authority (IRA).  Informal financial services also play  a significant part in meeting financial need in 
rural areas, although the proportion of the population that had access only to informal financial services decreased from about 32.4% in 2006 to 26.8 % in 2009 and the proportion of financially 
excluded decreased from about 38.4% to 32.7% in 2009.
76 
294. The Kenyan financial sector is the most sophis ticated and dynamic within the EAC, and the 
third-largest in sub-Saharan Africa.  There ha s been significant improvement in financial 
intermediation in Kenya.  In 2009, 40.5% of the adult population was using the services of financial 
intermediaries, up from 26.4% in 2006.  The progress is attributed to the Government's efforts to 
address deficiencies in the legal and institutional framework, together with a number of innovative 
steps to facilitate access to affordable financial services. 
(a) Banking and other credit institutions 
295. The business of banking (including other related financial institutions) regulated through the 
Banking Act, the Microfinance Act, and the Building So cieties Act, together with the regulations and 
prudential guidelines. 
296. The minimum capital requirement for banks  and mortgage finance companies is 
K Sh 1 billion, and K Sh 200 million for other financ ial institutions.  In general, commercial banks 
concentrate on short- to medium-term lending, wh ile mortgage finance companies focus on medium- 
to long-term property finance.  
297. Kenya's overall banking system, as at Decemb er 2011, comprised 44 licensed commercial 
banks, 1 mortgage finance company, 4 representa tive offices of foreign banks, 6 deposit-taking 
microfinance institutions (DTMs), 118 foreign ex change bureaus, and two credit reference bureaus 
(CRBs).  Of the commercial banks, 31 are locally owned and 13 are foreign ow ned.  The Government 
and state corporations have significant shareholdings  in three of the locally owned banks (70% in 
National Bank of Kenya, 77.8% in Consolidated Ba nk of Kenya, and 100% of Development Bank of 
Kenya).  The foreign-owned financial institutions co nsist of nine locally incorporated foreign banks 
and four branches of foreign incorporated banks.  
298. Kenya's banking system has several structural  weaknesses, including high interest rate 
spreads and a high ratio of non-performing loans to total loans.  Collateralization process is 
cumbersome and costly, and enforcement is weak. 
299. In 2007, Kenya launched its Credit Informa tion Sharing Mechanism (CISM), which obliges 
institutions licensed under the Banking Act to shar e information on non-performing loans through 
credit reference bureaus, which are licensed by th e Central Bank of Kenya.  Credit information 
sharing is expected to signifi cantly reduce information search cost s, and lower credit risk, reducing 
the cost of credit in the short- and medium-term.   As a result of these reforms, several indicators 
                                                      
76 FSD Kenya (2011). EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-237 
 
 
 improved during the review period:  the ratio of non-performing loans to total loans declined from 
10.9% in 2007 to 7.8% in 2010.77 
300. Kenya has a network of other financial service  providers:  microfinance institutions, which 
are members of the Association of Micro Finance Institutions (AMFI), savings and credit cooperative 
organizations (SACCOs), Kenya Post Office Savings  Bank (KPOSB), and four  development finance 
institutions.  The National Social Security Fund (NSS F) is a statutory pension fund for all employees.  
The Microfinance Act, 2006 and Microfinance Re gulations, 2008 empower the Central Bank to 
license, regulate, and supervise deposit-taking mi crofinance institutions.  The minimum capital 
requirement is K Sh 60 million to operate at the national level.  Smaller microfinance institutions 
operating within a district or a town require a minimum capital of at least K Sh 20 million. 
301. During the review period, the main innovation in the financial sector in Kenya was the 
emergence of mobile banking transfer services, allowing mobile phone users to make financial 
transactions at low cost.  M-PESA, a mobile-phone -based banking transfer system, was launched by 
Safaricom in 2007.  Since then, other operators (i ncluding Airtel, Essar Telecom, Telkom Kenya, 
Mobile Pay, and Mobikash) have launched mobile-phone-based money transfer services. 
302. Mobile money-transfer services serve over 18. 9 million customers across the country.  
M-KESHO, a mobile-based deposit account system, was launched in 2010 by Safaricom in partnership with Equity Bank.  Kenya Commerc ial Bank and Family Bank have also introduced 
mobile banking products that enable account hol ders to access their deposit account via mobile 
phones.  Mobile banking has improved the potential of resource mobilization.  The National Payments 
Systems Act of 2011 aims to bring all payment service providers, including mobile phone service 
providers offering money-transfer services, under the CBK regulatory framework. 
303. The Crime and Anti-Money Laundering Act, 2009,  passed in December 2009, entered into 
force in June 2010.  It establishes a Financial Reporting Centre, an Anti-Money-Laundering Advisory 
Board, and an Assets Recovery Agency.  Fina ncial institutions and designated non-financial 
businesses such as casinos, real estate agencies, dealers of precious stones and metals, non-
governmental organizations, and a ccountants are required to report any suspected money-laundering 
activity to the Financial Reporting Centre.
78 
304. Penalties for convicted individuals and corpor ate bodies range from 2 years' imprisonment for 
individuals and fines of  K Sh 1 million (about US$12,500), to 14 years' imprisonment and fines of 
K Sh 25 million (about US$312,500). 
(b) Insurance 
305. The Kenyan Insurance Market is governed by the Insurance Act, Cap 487 Laws of Kenya. 
The Insurance Regulatory Authority (IRA) is a st atutory government agency established under the 
Insurance Act (Amendment), 2006, which was opera tionalized in 2007 to regulate, supervise, and 
develop the insurance industry.  
306. Kenya has 44 licensed insurance companies (o f which 20 write general insurance business 
only, 10 are long-term business insurers, and 14 are co mposite insurers).  The insurance industry also 
                                                      
77 World Bank World Development Indicators, 2011.  Viewed at:  http://data.worldbank.org/news/ 
WDI-2011-database-and.publication-available. 
78 Central Bank of Kenya (2010a) and (2010b). WT/TPR/S/271/KEN Trade Policy Review 
Page A2-238 
  
 includes:  170 insurance brokers, 25 medical insu rance providers, 3,600 insurance agents, and other 
service providers. 
307. A long-term business insurer may be registered to transact any or all classes of long-term 
insurance business:  bond investment, industrial life,  ordinary life, and superannuation.  A general 
insurance business may be registered to transact a ny or all classes of general insurance business:  
aviation, engineering, fire-domestic, fire-indus trial, liability, marine, motor-private, motor-
commercial, personal accident, theft, workmen’s compensation, medical, and miscellaneous.  Any insurance company may be licensed to transact eith er long-term insurance business, general insurance 
business, or both. 
308. There are two reinsurance companies: the state-owned Kenya Reinsurance Corporation 
(Kenya Re), and the East Africa Reinsurance Co mpany Limited, a private company.  Both are 
registered to transact long-term and general reinsurance business.  Two regional reinsurance 
companies, PTA Reinsurance Company (PTA Re),  and Africa Reinsurance Corporation (Africa Re) 
also operate in Kenya, but are not locally inco rporated and therefore not registered under the 
Insurance Act.  Every insurer must cede 33% of th eir reinsurance business to:  Kenya Re (18%), PTA 
Re (10%), and Africa Re (5%).  The remaini ng 67% may be placed with foreign reinsurance 
companies subject to a reinsurance premium levy of  5%.  The compulsory18% to Kenya Re was set to 
expire on 1 January 2011 or upon privatization whichever comes earlier, but this deadline was 
extended to 2015. 
309. The maximum foreign equity allowed in insura nce and reinsurance companies is 66%.  The 
maximum for insurance brokers is 40%.  Insura nce agents must be Kenyans, but there are no 
restrictions on insurance service providers.  Insura nce professionals must be licensed by the Insurance 
Regulatory Authority; licences must be renewed annually.  The licence fees for registration and renewal are for:  K Sh 250,000 for reinsurers; K Sh 150,000 for insurers;  K Sh 10,000 for insurance 
brokers and for medical insurance providers;  K Sh  3,000 for risk managers, loss adjusters, loss 
assessors, insurance surveyors, and claims settling agents; and K Sh 1,000 for insurance agents.
79 
310. Insurance companies must be locally incorporat ed with minimum paid-up capital as follows:  
general insurance business, K Sh 300 million;  long- term insurance business, K Sh 150 million;  both 
general and long-term business, K Sh 450 million;  and reinsurance business, K Sh 500 million.  For 
both long-term and short-term insurers not less than one third of the paid-up capital must be owned by 
Kenyan citizens or by the Government.  This require ment also applies to re-insurance companies.  In 
addition, admitted assets in Kenya should not be  less than K Sh 20 million for insurers and 
K Sh 200 million for reinsurers.  At least one third of the members of the board of directors or management board must be citizen of Kenya. 
311. Any insurer carrying on long-term insurance bus iness is required to maintain a solvency 
margin of K Sh 10 million, or 5% of admitted asset s, whichever is higher.  For general insurance 
business, the solvency requirement is:  not less than the aggregate of the admitted liabilities and 
K Sh 10 million, or 15% of its net premium income during its last preceding financial year, whichever 
is the greater.  Insurers carrying out both long-t erm and general insurance business are required to 
maintain separate so lvency margins. 
312. A 1% levy is payable by all insurers on thei r premiums.  In addition, medical insurance 
providers are required to pay insurance premium levies of 0.1% on business placed outside the 
country.  A 0.2% insurance training levy is charge d on policyholders and collected by the insurers on 
                                                      
79 The same amounts apply as penalties for late  submission of licence renewal applications. EAC-Kenya WT/TPR/S/271/KEN 
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 behalf of Insurance Training and Education Trust, which is responsible for training personnel for the 
insurance industry in Kenya.  A 0.5% policyholde rs compensation levy is also charged (insurance 
companies pay 0.25% and policyholders contribute 0.25%), the levy was established to provide compensation to policyholders of a collapsed insurance company. 
313. In principle, risks located in Kenya must to  be covered by companies incorporated and 
located in Kenya.  However, a policy holder ma y apply to the IRA for exemption to place risk 
overseas.  There are no restrictions on insurance co mpanies in Kenya underwriting risks from outside 
the country provided that all policies are issued in Kenyan shillings.  Insurance for imports is 
compulsory and must be taken with companies licensed in Kenya. 
314. The insurance penetration rate is very low in Kenya (approximately 2.63%) due to 
unfavourable public perception of the sector, and l ack of innovative tools to deal with the poorest 
segment of the population.  Efforts are under way to develop micro insurance, in order to provide insurance services to the poor;  a taskforce, compos ed of the IRA and stakeholders is working on a 
policypaper in that respect. 
315. Premium rates for life insurance are set by individual companies (actuaries) subject to 
approval by the IRA.  Premium rates for general business are set based on the claims experience of a 
company. 
316. Motor-vehicle third-party insurance is  a compulsory insurance in Kenya. 
(c) Capital markets 
317. 
The capital marke ts in Kenya are regulated, by the Capital Market Authority (CMA), 
pursuant to the Capital Markets Act, the Central Depositories Act (2000), and the regulations, rules, 
and guidelines issued under each.  The Capital Ma rkets Authority (CMA) is responsible for the 
licensing, approval, regulation, and supervision of all intermediaries and publicly issued products in 
the capital markets.  The CMA is also mandated to facilitate development of the securities markets in 
the country and is primary advisor to the Governme nt of Kenya on all aspects of the development and 
operation of capital markets.  
318. There are 59 companies listed on the Nairobi Securities Exchange, on main investment 
market segment, and the alternative segment. 
319. The CMA has undertaken a number of reforms to modernize, inter alia , the trading process at 
Nairobi Securities Exchange (NSE).  An automate d trading system (ATS) was introduced in 2006, 
and a wide area network (WAN) platform was im plemented in 2007;  trading is now conducted 
mainly from brokers' offices through the network.  In addition, since 2009, bond trading activities 
have been taking place through the automated tr ading system (ATS) of the NSE.  Following 
Automation bond turnover increased, from K Sh 93 bi llion in 2008 to K Sh 467 billion in 2011.  
320. The Central Depository and Settlement Corpor ation (CDSC) is licensed under the Central 
Depositories Act, provides central depository services for equity and corporate bonds, while the Central Bank of Kenya provides depository services for Treasury bonds.  The Central Depositories 
Act was amended in 2011 to strengthen the regulatory structures to ensure the robustness of the settlement system and reduce settlement risk.  In a ddition, an explicit insolvency set-off provision was 
introduced for securities transactions to allow for settlement finality in  line with international best 
practise standards. WT/TPR/S/271/KEN Trade Policy Review 
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 321. In 2010, the Capital Market Act was amended to  pave the way for the demutualization of the 
Nairobi Securities Exchange (NSE).  This is bei ng pursued through the separation of ownership from 
management, separation of ownershi p and trading rights, and conversion of the entity from a company 
limited by guarantee to one limited by shares, ther eby allowing it to operate as a profit-making entity. 
322. The Government of Kenya in conjunction with the CMA Investor Compensation Fund, is 
expected to take up 20% of NSE ownership.  Existing members of the exchange are expected to reduce their cumulative shareholding in the exchange to no more than  40% within three years of the 
demutualization.  According to the authorities, the NSE is also in the process of rolling out an action 
plan for operating as a self-regulatory organization,  thereby taking on greater responsibility for the 
supervision of its members and oversight of market operations.  Demutualization is expected to boost 
the activities of the NSB and increase business confidence. 
(ii) Transport 
323. The contribution of the transport subsector to GDP averaged around 7.5% during the review 
period.  The subsector comprises a wide range of service providers, covering all modes of transport 
(air, road, rail, sea).  Road transport accounts fo r over 80% of Kenya’s total passenger and freight 
transportation, and value of output (Table IV.14).  An efficient transport infrastructure is one of the 
foundations of the Vision 2030. 
Table IV.14 
Transport output, 2006-10 
(K Sh million) 
 2006 2007 2008 2009 2010 
Road transport 205,305 233,224 273,047 285,250 331,948 
Railway transport 4,553 4,550 4,449 4,356 2,208 
Water transport 21,408 23,233 21,868 21,039 21,488 
Air transport 71,301 80,254 83,010 80,519 80,935 
Services incidental to transport 29,194 33,971 38,823 40,016 49,348 
Pipeline transport 8,846 8,736 9,222 11,481 6,463 
TOTAL 340,607 383,968 430,419 442,661 492,390 
Source: Information provided by the Kenyan authorities.   
324. Kenya's potential in transport services is constrai ned by high transport costs, mainly due to 
poor infrastructure and institutional framework , soaring oil prices, and underfunding. 
(a) Road transport 
325. Kenya's most important mode of transport suffe rs the same structural constraints as the 
subsector in general.  In addition,  overloading of vehicles is a serious  concern for road maintenance.  
Kenya has a road network of about 177,500km.  Roads are classified in six categories:  Class A:  international trunk roads (crossing internationa l boundaries);  Class B:  national trunk roads 
(connecting provincial headquarters to each other or to class A roads); Class C:  primary roads 
(linking district headquarters to each other or to higher class roads); Class D:  secondary roads (linking locally important centres to each other or  to higher class roads);  Class E:  minor roads 
(linking minor centres);  Class F:  special purpose roads (including roads for tourist, township, 
agriculture, and strategic purposes). EAC-Kenya WT/TPR/S/271/KEN 
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 326. The classified road network, an estimated 63, 000 km, is under the Roads Department of the 
Ministry in charge of Roads and Public Work s, while unclassified roads (114,500km) are under 
county councils, the Ministry in charge of Environm ent and Natural Resources, the Ministry in charge 
of Tourism, and other bodies.  The Ministry in ch arge of Roads and Public Works is responsible for 
policy formulation, regulation, and development a nd enforcement of technical standards for road 
transport. 
327. According to the authorities, some 70% of clas sified roads are in good condition, while the 
remaining 30% requires rehabilitation or reconstruction.   Only 14% of the classified road network is 
paved.  
328. A plan for roads was put in place to coordinate the various strategies in force in Kenya for the 
period 2008-12.  In accordance with the Kenya Ro ads Act, 2007, three agencies were established 
under the Ministry in charge of Roads:  the Ke nya National Highway Authority, in charge of 
managing and maintaining all road works in classes A,  B, and C;  the Kenya Urban Roads Authority, 
responsible for managing and maintaining all roads in all major towns, including Nairobi City and 
municipalities;  and the Kenyan Rural Roads Authority,  responsible for all rural and small town roads, 
classes D, E, and F, and unclassified roads.  The Ro ad Act also raised the penalties for infringement 
of axle-load regulations. 
329. In order to mitigate inadequate public funding, the Kenya Roads Act allows for private-sector 
participation in financing and managing road infr astructures, through concessions.  The private-sector 
may build, manage, and transfer designated roads during an agreed period.  Pilot projects are under 
way on a number of road sections.  Among the road development strategies, the Roads 2000 
Programme is a rehabilitation and maintenance strate gy for the classified road network, using local 
resources and labour-based methods wher ever these are cost effective. 
330. The main transnational projects under way are:  the Northern Corridor Transport 
Improvement Plan (NCTIP), which seeks to connect  Mombasa port to Kenya's neighbours;  and the 
East African Road Network Project (EARNP), wh ich is critical to EAC regional integration. 
(b) Railway transport 
331. Railway transport is the second most important mode of transport in Kenya (2,778 km of 
lines), and is critical for long-distance freight along the main transport corridors.  It connects the Mombasa port to Nairobi, and to Malaba at the Kenya-Uganda border.  The network carries 2 million 
tonnes of freight per year, well below its initial capacity of 6 million tonnes.  However, it plays a 
critical role in the transport of interna tional goods trade through Mombasa port.  
332. Following a concession agreement in 2006, the railway network was run solely by the Rift 
Valley Railways (RVR), a South African company.  However, low demand, coupled with aging infrastructure and equipment, hinders effective ma nagement of railway transport in Kenya.  The 
concession agreement was amended in 2010, and E gyptian Citadel Capital acquired 49% of RVR. 
(c) Air transport 
333. The main policy guidelines for air transport are contained in the Kenya Civil Aviation 
(Amendment) Act 2002, the Civil Aviation Act, Cap 398, 1978, and the Kenya Airports Authority Act 
1990. WT/TPR/S/271/KEN Trade Policy Review 
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 334. The Yamoussoukro Decision is the basis for air-traffic rights allo cation for African countries.  
For all other countries, allocation is based on reci procity.  Cabotage is not allowed for freight 
companies.  Kenya is also a signatory to the Chicago Convention of 1944. 
335. The Kenya Civil Aviation Authority (KCAA) is responsible for developing, regulating, and 
operating a safe, economically sustainable, and effici ent civil aviation system;  and the Kenya Airport 
Authority is in charge of airport infrastructur e development and management.  The KCAA is in 
charge of granting licences for international and domestic non-scheduled air service operations into 
and within Kenya.  The Ministry in charge of Transport is responsible for bilateral air services 
agreements and scheduled air services.   
336. Scheduled air transport services are subject to  bilateral air services agreements (BASAs). 
Kenya Airways the designated national carrier, operat es scheduled services into and out of Kenya, in 
accordance with BASAs.  However, other Kenyan co mpanies are allowed to operate international and 
domestic charter airlines.  Air traffic is allo cated under Kenya's BASAs.  Handling services are 
provided by Kenya Air Handling, a subsidiary of Kenya Airways. 
337. Air transport is critical to the viability of Kenya's tourism sector. Passenger traffic grew 
continuously during the review period.  This was attributed to the global economic recovery and the 
take-off, after the political turmoil in 2008.  Passe nger traffic grew by 9.1 % in 2010, to 7.5 million 
passengers, up from 6.8 million in 2009. 
338. Kenya has three international airports:  Nairobi 's Jomo Kenyatta International Airport, Moi 
International Airport, and Eldoret.  In total, Kenya has 488 aerodromes of varying sizes and facilities, 
of which 61 have paved runways.  In order to  improve air traffic management, the KCAA has 
developed a 15-year Kenya Air Space Master Plan (2005-2020 ).  The main programmes aimed at 
expanding airport capacities are rehabilitation of fac ilities at Moi International Airport, expansion of 
passenger terminal facilities at Jomo Kenyatta Inte rnational Airport, and upgrading of facilities at 
Kisumu Airport which has been completed. 
(d) Maritime transport 
339. Since 2011, maritime transport has been regulat ed by the Merchant Shipping Act 2009 and its 
regulations. 
340. Kenya's maritime transport industry includes pr ovides port facilities in Mombasa, shipping 
and inland water transport, and in land container depots at Nairobi, Kisumu, and Eldoret.  Mombasa, 
the only commercial seaport is the leading port and a major distribution centre.  It serves as a trade 
gateway for, inter alia,  Burundi, the eastern portion of the De mocratic Republic of Congo, Rwanda, 
Tanzania, and Uganda. 
341. Inland ports are currently owned and managed by  Kenya Ports Authority (KPA), which still 
has a monopoly on cargo handling at the port of Momb asa and manages the various container depots.  
Since 2006, growth in container traffic at the por t of Mombasa has increased, while the number of 
docking ships, and the volume of transhipment, have  decreased.  This may be a threat to the port's 
standing as a regional hub. 
342. The expected growth of imports and exports, du e to the discovery of oil resources in Uganda 
and in western DRC, and the ec onomic development of EAC countries are likely to worsen the 
capacity problems at Mombasa port, if the physical infrastructure and the management structure is not EAC-Kenya WT/TPR/S/271/KEN 
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 addressed.80  While the facility's nominal capacity is 250,000 TEUs, the overall volume handled in 
Mombasa was 695,600 TEUs in 2010 (Table IV.14).  As a consequence, relatively long dwell times 
(5.7 days on average), due to dockside congestion, and slow cargo clearance procedures, continue to 
provoke frequent cargo delays.  This leads to high  costs of international trade, and constitutes a 
genuine challenge to the competitiveness of Kenya's economy. 
343. As part of the solutions to inefficient port ope rations, KPA is in the process of introducing a 
Port Community-Based System (PCBS), a unified plat form for stakeholders to exchange timely and 
accurate information on each transaction.  Accord ing to the authorities, the Kenya Trade Network 
Agency (Kentrade), a state corporation, was esta blished in January 2011 to implement the national 
single window system.  Kentrade is in the proces s of building its institutional capacity and it is 
procuring software for the system. 
Table IV.15 
Traffic handled at Mombasa port, 2006-10 
 2006 2007 2008 2009 2010a 
Container traffic (TEUs) 479,355 585,367 615,733 618,816 695,600 
Ships docking (number) 1,857 1,811 1,686 1,748 1,579 
Imports (DWT '000) 
Dry general 4,099 4,866 4,979 5,435 5,987 
Dry bulk 2,344 2,722 2,891 4,641 3,871 
Bulk liquids 5,403 5,474 5,441 6,432 6,386 
Total imports 11,846 13,062 13,311 16,508 16,244 
Exports      
Dry general 1,810 2,102 2,295 2.220 2,410 
Dry bulk 313 205 200 62 70 
Bulk liquids 132 167 190 167 95 
Total imports 2,255 2,474 2,685 2,449 2,575 
Total imports and exports 14,101 15,536 15,996 18,957 18,819 
Transhipment 318 426 419 105 158 
Grand total 14,419 15,962 16,415 19,062 18,977 
 
a Provisional.  
Note: DWT = Deadweight tonnes. 
 
Source:  Information provided by the Kenyan authorities. 
344. In early 2012, Kenya launched the construction of an important port facility in Lamu, which 
is expected to become the main gateway to eastern and central African regions.  At the same time, a 
transport project, interconnecting Lamu Port-South S udan-Ethiopia (Lapsset), was inaugurated, with a 
view to streamlining port operations. 
(iii) Telecommunications and postal services 
(a) Telecoms 
345. Kenya's telecommunications market is benefiting from simultaneous technological 
improvements and institutional adaptation efforts.  The mobile sector grew rapidly over the review 
period.  Four operators offer mobile services:  Safa ricom (with 68% of the market share) and Airtel 
Kenya, together with Essar Telecoms (YU) a nd Telkom Kenya Limited (Orange), which were 
licensed in 2008. 
                                                      
80 World Bank (2010). WT/TPR/S/271/KEN Trade Policy Review 
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 346. A new structure for interconnection fees was a dopted in 2007, through regulations issued by 
the Communications Commission of Kenya (CCK).  This reduced the maximum interconnection tariff 
from K Sh 6.28 in 2007 to K Sh 2.21in 2010.  Howe ver, telephone operators ar e allowed to negotiate 
lower interconnection tariffs.  While the decrease in  interconnection tariffs was welcomed by smaller 
telephone operators and new entrants, as it creat ed conditions for competing with the bigger, 
established operators, the dominant market operators , such as Safaricom, expressed concern that the 
regulations will limit their revenue and jeopardize future investment plans. 
347. Increased competition in the mobile market has led to a significant reduction in the cost of 
mobile services;  international charges have also  dropped, due to the legalization of the voice over 
internet protocol (VOIP) in 2006.  In 2011, ther e were 25 million mobile subscribers, (67.2% mobile 
penetration), up from 9 million in 2006.  Over the same period, mobile network capacity grew from 
18 million to 51 million. 
348. The introduction of money transfer services using cellular phones has further boosted the 
growth of the subsector.  Since Safaricom launc hed its M-Pesa mobile money transfer services in 
2007, the use of mobile technology to provide mone y transfer services has continued to expand.  All 
the mobile operators now provide money transfer services, although M-Pesa is by far the largest 
system, accounting for 80.1% of mobile  money transfer service subscriptions. 
349. Due to increased competition from mobile phone providers and high maintenance costs 
attributed to repeated vandalism, fixed-line servic es continue to decrease.  The fixed network capacity 
shrank further during the review period, from 512,281 connections in 2007 to 400,764 in 2011;  while 
the number of wire line subscribers fell from 263,122 in  2006, to 187,716 in 2011.  However, wireless 
fixed phone figures grew significantly over the same period, from 84,104 to 191,585 subscribers.  Telkom Kenya, which was partially privatized in  2007, and Flashcom Kenya are the only players in 
the fixed network voice services market, with the former holding 99% of the market share. 
350. The number of internet users in Kenya more  than quadrupled between 2006 and 2011 from 
2.5 million to some 12.5 million, and the number of internet subscriptions grew, from 1.8 million in 
2008 to 4.5 million in 2011.  This growth is attr ibuted to the launch of 3G services by mobile 
operators.  Mobile data/internet subscriptions through GPRS/EDGE and 3G continued to dominate 
internet subscriptions, accountin g for 98.4 % of the total. 
351. Currently, Kenya has four sub marine fibre-op tic cables: the East African Marine System 
(TEAMS), East African Sub-marine Cable System (EASSy), Sea Submarine Communications 
(SEACOM), and Lower Indian Ocean Network2 (LION2 ).  The cables have increased internet speeds 
and the amount of broadband available for users;  the cost of broadband is expected to fall.  
352. Kenya has established a Universal Service Fund (USF) with a view to facilitating access to 
postal, information, and communications services, and to promoting innovation and capacity-building 
in the ICT industry.  The fund is yet to be operationalized as the Universal Service Advisory Council (USAC), which will advise the CCK and provide stra tegic policy guidance for the implementation of 
the USF has not been constituted.  the USF will be  funded through a universal service levy to be 
charged by the CCK on licensees.  Ac cording to the authorities, following a stakeholders' consultation 
it was agreed that licensees under the Information and Communication Act will be charged a universal 
service levy of 0.5% of annual gross revenue. 
353. The current framework for regulating communi cations services is provided by the Kenya 
Information and Communications Act Cap 411A. U nder the Act, the Ministry in charge of EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-245 
 
 
 Information and Communications is responsib le for national information and communication 
technology (ICT) policy formulation, while the CCK is the regulatory authority for postal, information, and communication services. 
354. A national ICT policy entered into effect in 200 6, and aims to "improve the livelihood of 
Kenyans by ensuring the availability  of accessible, efficient, reliabl e, and affordable ICT services." 
According to the authorities, the policy is curren tly under review, in order to ensure its maximum 
developmental impact.  The National Communication Secretariat advises the Government on ICT policy.  The CCK deals with regulatory issues, including licensing communications operators.  The 
CCK regulates telecommunications, and postal ser vices.  A 2009 amendment to the Communications 
Act increased the scope of CCK's jurisdiction to in clude broadcasting services.  Disputes arising under 
the Act are referred to an Appeals Tribunal, whose members are appointed by the Ministry in charge 
of Information and Communications.  Parties unsatisfied by a decision of the Appeals Tribunal may take their case to the Court of Appeals.  
355. Since 2008, Kenya has dropped the multiple licensi ng regime, with a view to implementing a 
unified technology-neutral licensing model.  This has resulted in simplified procedures, development 
of new applications, increased penetration of mobile internet, and increased infrastructure 
investment.
81  Under this new regime service providers are licensed as:  network facilities providers 
(NFPs), to provide communications infrastructures;  applications service providers (ASPs), to provide 
any forms of services using communications infrastructures;  or contents services providers (CSPs), to provide services such as broadcast material, and other information services. 
356. In 2010, the Kenyan authorities issued regulations to promote transparency, equity, and 
predictability in the communications sector.  The re gulations deal with fair  competition and equality 
of treatment, dispute resolution, tariffs and ta riff structures, interconnection, monitoring of 
installations, and maintenance of  communications infrastructure. 
(b) Postal services 
357. The number of licensed operators, in the postal services, increased to 176 in 2011, from 134 
in 2006.  The intra-country market remains the la rgest segment, with 56.3% of the total number of 
licensed operators.  The Kenya Information and Communications Act regulates tariffs for reserved 
postal services.  The Postal Corporation of Kenya (PCK) is the main provider of postal services in Kenya.  Its reserved, exclusive services include:  delivery of letters, postcards, printed paper, and 
small packets weighing up to 350 grams;  printing and issuance of postage  stamps and philatelic 
materials;  and provision of private letter-boxes and street posting boxes.  The non-exclusive postal 
market consist of:  courier services, electronic certification services, parcel services, direct mail marketing services, postal financial services, electroni c and hybrid mail, distribution of publications, 
and agency services (e.g. telephone services, and third-party services).  
358. Tariffs for basic letters are subject to approval by the regulator.  The supplier is free to set 
prices of the other postal services, which are open to competition.  Interconnection and termination 
services are not open to competition, and prices are subject to approval by the CCK. 
(iv) Tourism 
359. Tourism industry is vital to the Kenyan economy.  It accounts for some 10% of GDP, and 
remains the leading source for foreign exchange  earnings.  The industry employed over 238,000 
                                                      
81 Research ICT Africa (2010).  WT/TPR/S/271/KEN Trade Policy Review 
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 people in 2011, up from 185,000 in 2006.  The highest number of employees are in hotels, restaurants, 
camps, and other lodging facilities. 
360. Due to post-election turmoil, and the global ec onomic and financial crisis, Kenya's tourism 
industry performed poorly in 2008.  The volume of international arrivals, fell by 33.8%, from about 
1.8 million in 2007, (with corresponding earnings of K Sh 65.2 billion), to 1.2 million in 2008 (with 
total earnings of K Sh 57.2 billion).  Following an  improvement in Kenya's socio-political situation, 
international arrivals increased significantly, w ith earnings peaking in 2010 (K Sh 73.7 billion in 
terms of revenue earnings);  when performance, in  term of arrivals and earnings, surpassed the 2007 
record by 4.5 %. 
361. Kenya's performance in the WEF Travel a nd Tourism Competitiveness Index (TTCI) has 
been mixed in recent years.82  Difficulties have been mainly relate d to security, due to terrorist attacks 
along Kenya–Somali border regions, and piracy in the Indian Ocean, which has affected cruise 
tourism. 
362. Kenya has made progress in improving the attractiveness of its tourism environment:  a 
National Tourism Policy has been developed, and the Tourism Act 2011 consolidated all the legal 
instruments in the tourism industry.  In additi on, the new legislation provides for development, 
regulation management, and marketing of sustainabl e tourism in Kenya.  It provides for incentive 
schemes for imported capital goods for investment in sustainable tourism activities.  In addition, it 
proposes the establishment of various institutions under the supervision of the Ministry in charge of 
Tourism, which are expected to play a key role in the development and promotion of sustainable 
tourism. 
363. Pursuant to the new legislation, the Directorate of Tourism, is responsible for formulating the 
National Tourism Strategy and coordi nating the Tourism Protection Service, to deal with the safety 
and security of visitors and hosts;  the Tourism Regulatory Authority will be responsible for all 
matters related to licensing, formulation of guidelin es, and measures pertaining to sustainable tourism 
development, as well as standardization and classifi cation of tourism facilities and services.  The 
Kenya Tourism Board is responsible for ma rketing Kenya as a tourist destination. 
364. The Act provides for resource mobilization to support tourism industry, through the Kenya 
Tourism Fund, which is responsible for: supporting the development of tourism products and services;  
financing marketing operations aimed at promoti ng tourism in Kenya;  and mobilizing resources to 
support tourism-related activities.  Financial assistan ce for development, expa nsion, and maintenance 
of tourism facilities, together with business advisory services to the tourism industry, are the 
responsibility of Kenya Tourism Finance Corporation.  Additionally, mechanisms are to be developed 
to support small and medium-size enterprises (SME s), as well as community-based tourist facilities.83 
365. A sectoral dispute resolution mechanism, under the Tourism Tribunal, will handle all 
disputes. 
                                                      
82 The TTCI measures the attractiveness of factors and policies (regulatory framework, infrastructure, 
human and cultural resources) that are important for the development of the travel and tourism industry.  It was 
launched in 2007 by the World Economic Forum, in co llaboration with a number of tourism-related bodies. 
83 Ministry in charge of Tourism online info rmation.  Viewed at:  www.tourism.go.ke. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-247 
 
 
 366. Kenya Tourism Research Institute undertakes a nd coordinates research and analysis in the 
sector.  In order to provide adequate safety for tourists, and promote Keny a abroad, the Government 
has established a Tourist Police Unit, coupled w ith an aggressive marke ting operation beyond the 
country's traditional tourism markets. 
367. The quality of tourism infrastructure is lacking in  terms of ICT and transport infrastructures.  
Improving roads, especially in rural areas, would ha ve the advantage of opening up new sites, thus 
creating new employment opportunities.  In additio n, the relative low proportion of four/five-star 
hotels (some 18% of hotels in Kenya) continues to affect Kenya's competitiveness in the global 
tourism industry.84 
                                                      
84 KIPPRA (2010). EAC-Kenya WT/TPR/S/271/KEN 
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e%20Review%202010.pdf.  World Bank (2010), Kenya Economic Update .  Viewed at:  http://siteresources.worldbank.org/ 
KENYAEXTN/Resources/Kenya-Ec onomic-Update-June-2010.pdf. 
 World Bank (2011a), Doing Business 2012 :  Doing Business in a More Transparent World.   Viewed 
at:  http://www.doingbusiness.org/~/media/FPDKM /Doing%20Business/Documents/Annual-Reports/ 
English/DB12-FullReport.pdf. 
 
World Bank (2011b), Doing Business in the East African Community .  Viewed at: 
http://www.doingbusiness.org/reports/~/media/ FPDKM/Doing%20Business/Documents/Special-
Reports/DB11-EAC.pdf. 
  
 APPENDIX TABLES  
 
 
 EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-253 
 
 
 Table AI.1 
Structure of imports, 2005-10 
(US$ million and %)  
 2005 2006 2007 2008 2009 2010 
Total 5,846 7,233 8,989 11,128 10,202 12,093 
 (%) 
Total primary products 35.6 37.3 36.4 41.9 39.8 37.2 
   Agriculture 11.2 11.1 12.9 13.0 16.8 13.6 
      Food 9.5 9.2 11.0 11.6 15.4 12.1 
         4222 Palm oil, fractions 2.9 3.0 3.5 4.1 3.3 3.7 
         0412 Other wheat (including spelt) and meslin,  
         unmilled 1.8 1.5 1.6 1.8 1.7 1.8 
         0423 Rice, milled, semi-milled 0.9 0.9 0.8 0.8 0.9 0.8 
         0612 Other beet, cane and chemically pure sucrose,  
         solid form 0.5 0.7 1.1 0.6 0.7 0.8 
      Agricultural raw material 1.7 1.9 1.9 1.3 1.4 1.6 
         2690 Worn clothing and other worn textile articles, 
         rags 0.5 0.5 0.5 0.5 0.6 0.7 
   Mining 24.4 26.2 23.5 28.9 23.0 23.6 
      Ores and other minerals 0.3 0.3 0.4 0.5 0.5 0.4 
      Non-ferrous metals 1.2 1.7 1.8 1.2 1.1 1.1 
      Fuels 22.9 24.2 21.3 27.2 21.4 22.1 
         3330 Crude oils of petroleum and bituminous minerals 11.7 10.6 8.1 10.6 6.9 7.6 
Manufactures 64.3 62.6 62.1 58.1 59.9 62.7 
   Iron and steel 4.8 4.1 4.4 4.6 4.3 4.5 
   Chemicals 14.4 13.9 12.8 13.1 13.0 13.3 
         5429 Medicaments, n.e.s. 1.3 1.6 1.5 1.6 1.9 1.8 
         5711 Polyethylene 1.5 1.5 1.5 1.4 1.2 1.3 
         5629 Fertilizers,  nes 1.9 1.3 0. 9 1.3 1.5 1.0 
         5751 Propylene polymers or of other olefins 0.8 0.7 0.7 0.7 0.6 0.7 
   Other semi-manufactures 5.7 5.8 6.9 6.4 6.5 6.7 
   Machinery and transport equipment 30.8 31.2 30.5 27.9 30.4 31.8 
      Power generating machines 0.5 0.7 0.9 2.1 2.2 1.5 
         7165 Generating sets 0.3 0.3 0.4 1.1 1.0 1.1 
      Other non-electrical machinery 6.3 5.9 6.5 6.6 6.4 7.1 
         7314 Unit head machines, etc. for drilling or boring 0. 0 0.0 0.0 0. 0 0.0 0.7 
         Agricultural machinery and tractors 0.5 0.4 0.5 0.4 0.5 0.4 
      Office machines & telecommuni cation equipment 4.1 4.9 5.2 5.7 6.4 7.4 
         7643 Radio or television tran smission apparatus 0.5 0.9 1.9 1.1 1.4 1.8 
         7641 Electrical apparatus for lin e telephony/telegraphy 1.0 1.1 0.3 0.4 0.5 0.8 
      Other electrical machines 1.7 2.2 2.8 2.9 3.2 2.8 
      Automotive products 6.5 7.9 8.1 6.8 7.1 6.5 
         7812 Motor vehicles for the transport of persons, n.e.s. 2.7 3.0 3.3 2.8 2.9 2.9 
         7821 Goods vehicles 1.6 2.3 1.9 1.5 1.4 1.5 
         7832 Road tractors for semi-trailers 0.7 1.3 1.2 1.1 1.3 0.8 
      Other transport equipment 11.6 9.6 7.1 3.9 5.1 6.3 
         7924 Aeroplanes, etc.  (excl. helicopters), >15,000 kg 
        unladen 7.2 3.2 4.4 1.1 2.3 3.4 
         7131 Aircraft internal combustion piston engines and 
         parts 0.4 0.5 0.4 0.9 0.7 0.8 
   Textiles 4.1 3. 4 2.8 2.3 1.9 2.4 
   Clothing 0.4 0.6 0.7 0.5 0.5 0.6 
   Other consumer goods 4.1 3.7 3.9 3.4 3.3 3.6 
Other 0.1 0.0 1.5 0.1 0.3 0.1 
 
Source:  WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-254 
  
 Table AI.2 
Structure of exports, including re-exports 2005-10 
(US$ million and %) 
 2005 2006 2007 2008 2009 2010 
Total 3,420 3,502 4,081 5,001 4,463 5,169 
 (%) 
Total primary products 67.9 64.3 61.8 61.7 63.0 63.8 
   Agriculture 47.6 54.6 54.7 54.8 56.8 57.6 
      Food 37.6 42.6 42.8 41.7 43.7 46.9 
         0741 Tea 16.6 18.9 17.1 18.6 20.0 22.5 
         0545 Other fresh or chilled vegetables 5.4 5.8 5.7 5.1 4.9 4.4 
         0711 Coffee, not roasted 3.5 3.6 3.8 3.0 4.4 4.0 
         1222 Cigarettes containing tobacco 1.5 2.4 2.3 1.8 1.9 1.8 
         4222 Palm oil, fractions 0.7 0.7 0.9 1.0 1.1 1.6 
         0589 Fruit, nuts, n.e.s., whether or not sweetened 1.4 1.2 1.4 1.5 0.9 1.1 
         0622 Sugar conf ectionery, not containing cocoa 1.0 1.1 1.1 1.0 0.9 1.0 
         1123 Beer made from malt (including ale, stout and 
         porter) 0.0 0.4 0.7 0.6 0.7 0.7 
         0542 Leguminous vegetables, dried, shelled 0.1 0.1 0.5 0.3 0.1 0.7 
      Agricultural raw material 10.0 12.0 11.9 13.1 13.1 10.7 
         2927 Cut flowers and foliage 7.2 9.0 9.6 10.5 9.5 7.7 
         2929 Materials of vegetable origin, n.e.s. 0.5 0.5 0.1 0.6 1.7 1.2 
         2926 Bulbs, tubers, cuttings, slips, live plants, etc. 1.1 1.2 1.3 1.0 1.3 1.1 
   Mining 20.3 9.7 7.1 7.0 6.2 6.2 
      Ores and other minerals 1.4 1.6 1.8 2.1 1.1 1.0 
      Non-ferrous metals 0.6 0.9 1.0 0.9 0.9 1.0 
      Fuels 18.3 7.3 4.3 4.0 4.2 4.2 
Manufactures 31.8 35.5 36.8 38.1 36.4 33.9 
   Iron and steel 3.6 3.6 3.1 3.2 2.6 3.0 
         6741 Flat-rolled products, iron/steel, zinc plated 1.2 1.3 0.7 0.8 0.9 0.7 
   Chemicals 8.4 7.2 8.7 11.5 10.2 9.0 
         5237 Carbonates, percarbonates 2.3 1.6 2.0 3.9 2.5 1.8 
         5541 Soap 1.3 0.6 0.7 0.8 1.1 1.2 
         5429 Medicaments, n.e.s. 0.8 0.9 1.2 1.1 1.0 1.0 
   Other semi-manufactures 5.5 6.9 7.6 8.0 7.7 7.0 
         6612 Portland cement and similar hydraulic cements 1.1 1.6 1.8 2.3 2.3 1.8 
   Machinery and transport equipment 2.9 3.9 4.5 4.3 5.2 5.1 
      Power generating machines 0.1 0.3 0.1 0.1 0.2 0.2 
      Other non-electrical machinery 0.8 1.2 0.9 0.8 1.1 1.1 
         Agricultu ral machinery and tractors 0.1 0.1 0.1 0.1 0.3 0.2 
      Office machines & telecommunication equipment 0.2 0.4 0.7 1.1 1.2 1.4 
      Other electrical machines 0.6 0.6 0.9 0.9 0.8 0.8 
      Automotive products 0.6 0.7 0.8 0.8 1.4 1.0 
      Other transport equipment 0.6 0.7 1.1 0.5 0.5 0.6 
   Textiles 1.4 1.5 1.4 1.0 1.0 1.2 
   Clothing 5.4 6.8 5.9 5.1 4.0 3.8 
   Other consumer goods 4.7 5.5 5.6 5.1 5.6 4.9 
         8931 Plastics containers, stoppers, lids, etc. 1.2 1.4 1.2 1.4 1.3 1.3 
Other 0.3 0.2 1.5 0.2 0.6 2.3 
   Gold 0.2 0.2 1.3 0.2 0.6 2.2 
         9710 Gold, non-monetary (excl. gold ores and 
         concentrates) 0.2 0.2 1.3 0.2 0.6 2.2 
 
Source:  WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3. 
 EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-255 
 
 
 Table AI.3 
Origin of imports, 2005-10 
(US$ million and %) 
 2005 2006 2007 2008 2009 2010 
Total 5,846 7,233 8,989 11,128  10,202  12,093 
 (%) 
  America 11.7 6.2 9.2 5.7 8.2 5.8 
    United States 9.6 4.7 7.4 3.6 6.4 4.1 
    Other America 2.1 1.5 1.8 2.1 1.9 1.7 
    EU(27) 21.0 22.6 20.2 17.6 18.5 18.6 
      United Kingdom 5.6 5.2 4.9 3.6 4.6 5.2 
      Germany 3.6 3.6 3.7 3.5 2.9 2.8 
      France 3.2 2.0 2.7 2.1 2.0 1.9 
      The Netherlands 2.2 1.7 1.5 1.7 2.2 1.9 
      Finland 0.4 0.4 0.8 0.7 0.5 1.5 
      Italy 1.8 2.3 2.2 1.6 1.8 1.2 
    EFTA 1.5 1.4 1.0 1.0 0.9 1.4 
      Switzerland 1.1 1.3 0.8 0.7 0.7 1.2 
    Other Europe 0.3 0.7 0.6 0.8 0.4 0.5 
  Commonwealth of Independent States (CIS) 1.1 1.3 1.6 2.2 1.9 1.9 
      Russian Federation 0.7 0.6 1.1 1.5 0.6 1.0 
      Ukraine 0.4 0.7 0.5 0.7 1.3 0.9 
  Africa 14.2 12.2 11.9 11.2 13.3 12.0 
      South Africa 9.7 6.5 5.8 6.1 9.0 6.2 
      Egypt 1.4 1.6 1.8 1.4 1.2 1.9 
      United Republic of Tanzania 0.7 0.9 1.1 0.9 1.0 1.1 
      Uganda 0.3 0.2 1.0 0.7 0.6 1.0 
  Middle East 24.4 23.0 21.5 24.0 18.9 17.6 
      United Arab Emirates 14.2 14.9 14.8 14.9 11.4 12.1 
      Saudi Arabia 6.3 5.1 2.9 3.4 3.5 3.4 
  Asia 25.5 32.5 34.1 37.4 37.8 42.0 
    China 5.2 5.7 7.6 8.4 9.5 12.6 
    Japan 5.2 5.6 6.8 5.8 6.2 6.1 
    Six East Asian Traders 5.6 9.4 5.8 7.2 7.3 8.1 
      Singapore 1.7 4.9 1.5 3.2 3.4 3.3 
      Korea, Rep. of 0.8 1.8 1.4 1.1 1.4 2.1 
      Thailand 0.8 0.9 1.1 1.2 0.9 0.9 
    Other Asia 9.4 11.8 13.9 16.0 14.8 15.2 
      India 5.6 7.2 9.4 11.8 10.6 10.8 
      Indonesia 2.2 2.6 3.1 3.0 2.4 2.8 
  Other 0.3 0.1 0.1 0.0 0.0 0.1 
 
Source:  WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3. 
 WT/TPR/S/271/KEN Trade Policy Review 
Page A2-256 
  
 Table AI.4 
Destination of exports, including re-exports 2005-10 
(US$ million and %)  
 2005 2006 2007 2008 2009 2010 
Total 3,420 3,502 4,081 5,001 4,463 5,169 
 (%) 
  America 7.2 8.8 7.5 6.4 5.5 5.9 
    United States 6.7 8.3 7.0 6.0 5.1 5.5 
    Other America 0.5 0.5 0.5 0.4 0.4 0.4 
  Europe 25.4 28.1 28.1 27.3 27.3 24.8 
    EU(27) 24.5 26.6 26.6 26.0 26.5 23.9 
      United Kingdom 9.2 10.9 10.5 11.0 11.2 9.8 
      The Netherlands 7.1 7.9 8.0 7.6 7.6 6.6 
      Germany 2.0 1.9 2.2 1.8 2.1 1.9 
      France 2.1 1.8 1.5 1.4 1.3 1.3 
    EFTA 0.8 1.4 1.2 1.0 0.6 0.7 
    Other Europe 0.1 0.2 0.3 0.2 0.2 0.2 
  Commonwealth of Independent States (CIS) 1.1 1.3 1.4 1.7 1.8 1.9 
      Russian Federation 0.5 0.6 0.7 1.0 1.0 1.1 
  Africa 46.7 42.7 45.1 47.3 47.2 46.1 
      Uganda 16.6 11.1 12.2 12.3 13.4 12.7 
      United Republic of Tanzania 7.7 7.2 8.1 8.5 8.7 8.1 
      Sudan 2.6 4.0 4.2 4.1 3.7 4.6 
      Egypt 3.4 3.9 3.3 4.5 3.4 4.4 
      Somalia 1.9 3.0 3.0 3.7 3.3 3.2 
      D.R. Congo 3.9 3.1 3.0 2.9 3.3 3.1 
      Rwanda 2.8 1.9 2.1 2.6 2.8 2.6 
      Burundi 1.4 0.9 0.9 1.0 1.3 1.3 
      Zambia 1.1 1.6 1.8 1.6 1.4 1.1 
      Ethiopia 1.0 1.5 1.3 1.3 1.3 1.1 
  Middle East 3.5 3.9 5.0 4.6 5.6 7.4 
      United Arab Emirates 1.6 2.0 3.1 2.2 3.1 4.6 
      Yemen 0.6 0.8 0.8 0.8 1.0 1.1 
  Asia 11.4 11.0 11.7 11.8 11.8 12.6 
    China 0.5 0.6 0.5 0.6 0.7 0.6 
    Japan 0.7 0.5 0.5 0.7 0.6 0.5 
    Six East Asian Traders 1.3 1.2 1.7 2.4 1.5 1.2 
    Other Asia 8.9 8.7 9.0 8.1 8.9 10.4 
      Pakistan 5.4 5.8 4.9 4.0 4.4 4.4 
      Afghanistan 0.6 0.6 0.9 1.3 2.2 2.9 
      India 1.6 1.5 2.1 2.0 1.5 2.1 
  Other 4.7 4.2 1.2 0.9 0.8 1.1 
 
Source:  WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-257 
 
 
 Table AII.1 
Selected notifications to the WTO, 2006-12 
WTO Agreement Description of requirement  Periodicity Most recent notification 
Agreement on implementation of GATT Article VI 
Article 16.4 Semi-annual report Semi-a nnual G/ADP/N/139/Add.1, 21 April 2006 
Article 18.5 
 Laws and regulations Once, then ch anges G/ADP/N/1/KEN/2, 29 July 2009 
Agreement on implementation of GATT Article XVII 
 State trading enterprises  G/STR/N/11/KEN, 27 March 2006 
Agreement on Technical Barriers to Trade  
Article 2.9 Laws and regulations Ad hoc G/TBT/N/KEN/248, 3 May 2011 
G/TBT/N/KEN/284,21 March 2011 
G/TBT/N/KEN/283, 21 March 2011 G/TBT/N/KEN/208, 8 February 2010 
G/TBT/N/KEN/182, 1 October 2009 
G/TBT/N/KEN/13, G/TBT/N/KEN/24 
17 January 2006 
2 March 2006 
G/TBT/N/KEN/26 2 March 2006 
Article 2.10 Laws and regulations Ad hoc G/TBT/N/KEN/282 
1 March 2011 
G/TBT/N/KEN/266 
16 December 2010 G/TBT/N/KEN/258 16 December 2010 
G/TBT/N/KEN/200 
8 December 2009 G/TBT/N/KEN/175 
1 October 2009 
G/TBT/N/KEN/134 21 April 2009 
G/TBT/N/KEN/133 
21 April 2009 G/TBT/N/KEN/132 
21 April 2009 
G/TBT/N/KEN/129 30 October 2008 
G/TBT/N/KEN/125/Add.1 
12 November 2008 
G/TBT/N/KEN/124 
30 October 2008 
G/TBT/N/KEN/97 19 January 2007 
G/TBT/N/KEN/91 
3 January 2007 G/TBT/N/KEN/80 
12 December 2006 
G/TBT/KEN/79 
12 December 2006 
G/TBT/KEN/68 22 September 2006 
Article 5.6 Laws and regula tions Ad hoc G/TBT/N/KEN/251 
11 October 2010 G/TBT/N/KEN/14/Add.3 
6 November 2008 
G/TBT/N/KEN/123 
25 September 2008 
G/TBT/N/KEN/122 25 September 2008 
Article 5.7 Laws and regula tions Ad hoc G/TBT/N/KEN/285 
4 April 2011 G/TBT/N/KEN/191 
8 December 2009 
Table AII.1 (cont'd) WT/TPR/S/271/KEN Trade Policy Review 
Page A2-258 
  
 WTO Agreement Description of requirement  Periodicity Most recent notification 
Article 10.7 Laws and regula tions Ad hoc G/TBT/10.7/N/28 
10 November 1999 
Agreement on Sanitary and Phytosanitary 
Measures     
Article 7, Annex B Regular notif ication Ad hoc G/SPS/N/KEN/29 
21 December 2009 
G/SPS/KEN/N/30 29 July 2010 
Article 7, Annex B Emergency measures Ad hoc G/SPS/N/KEN/24 
6 March 2006 G/SPS/N/KEN/16 
13 February 2006 
G/SPS/N/KEN/2-28 
26 April 2001 -  
1 May 2006 
Agreement on Subsidies and 
Countervailing Measures     
Article 27.4 Semi-annual report  G/SCM/N/138/Add.1 
20 April 2006 
Article 32.6    
Agreement on Trade-
Related Aspects of 
Intellectual Property 
Rights  Laws and regulations Once, then changes  
Article 63.2 Contact point  IP/N/3/Rev.9/Add.2 
19 May 2006 
Source:  WTO Secretariat. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-259 
 
 
 Table AIII.1 
Products subject to excise duties, 2011  
HS code Product description Excise duty 
Foodstuffs   
2009.11.00 Frozen orange juice, unfermented an d not containing added spirit whether or not 
containing added sugar or  other sweetening matter 10% 
2009.12.00 Orange juice not frozen, unfermented a nd not containing added spirit whether or not 
containing added sugar or ot her sweetening matter, or a brix value not exceeding 20 10% 
2009.19.00 Other orange juice, unfermented and not containing added suga r or other sweetening 
matter 10% 
2009.21.00 Grapefruit juice, unfermented and not containing added spirit whether or not 
containing added sugar or ot her sweetening matter, of a brix value not exceeding 20 10% 
2009.29.00 Other grapefruit juice, unfermented a nd not containing added spirit whether or not 
containing added sugar or  other sweetening matter 10% 
2009.31.00 Juice of any other single citrus fru it, unfermented and not containing added spirit 
whether or not containing adde d sugar or other sweetening matter, of a brix value not 
exceeding 20 10% 
2009.39.00 Other juice of any other single citrus fr uit, unfermented and not containing added spirit 
whether or not containing added sugar or other sweetening matter 10% 
2009.41.00 Pineapple juice, unfermented and not c ontaining added spirit whet her or not containing 
added sugar or other sweetening matter , of a brix value not exceeding 20 10% 
2009.49.00 Other pineapple juice, unfermented and not containing added sp irit whether containing 
added sugar or other sweetening matter 10% 
2009.50.00 Tomato juice, unfermented and not cont aining added spirit, whether or not containing 
added sugar or other sweetening matter 10% 
2009.61.00 Grape juice (including grape must), unfermented and not containing added spirit, 
whether or not containing adde d sugar or other sweetening matter, of a brix value not 
exceeding 20 10% 
2009.69.00 Other grapefruit juice (including grape must), unfermented a nd not containing added 
spirit, whether or not containing a dded sugar or other sweetening matter 10% 
2009.71.00 Apple juice, unfermented and not cont aining added spirit, whether or not containing 
added sugar or other sweetening matter , of a brix value not exceeding 20 10% 
2009.79.00 Other apple juice, unfermented and not containing added spirit, whether or not 
containing added sugar or  other sweetening matter 10% 
2009.80.10 Passion fruit juice, unfermented and not containing added spirit, whether or not 
containing added sugar or  other sweetening matter 10% 
2202.90.00 Other non-alcoholic beverages 10% 
Alcohol   
2203.00.10 Stout and porter  K Sh 49/l 
2203.00.20 Beer of an original gravity  not exceeding 1,060 degrees K Sh 38/l 
2203.00.90 Other beer (including ale) of an or iginal gravity exceeding 1,060 degrees K Sh 38/l 
2204.10.10 Champagne 45% 
2204.10.90 Other sparkling wine 45% 
2204.21.00 Other wine; grade must with fermentati on prevented or arrested by the addition of 
alcohol in containers of 2 litres or less 45% 
2205.10.00 Vermouth and other wine of fresh grapes flavoured with plants or aromatic substances 
in containers of 2 litres or less 45% 
2205.90.10 Vermouth and other wine of fresh grapes flavoured with plants or aromatic substances 
in containers of more than 2 litr es but not more than 5 litres 45% 
2205.90.90 Vermouth or other wine of fresh grapes  in containers of more than 5 litres 45% 
2206.00.11 Beer not made from malt in cont ainers holding 2 litres or less K Sh 24/l  
2206.00.19 Other beer not made from malt in cont ainers holding more than 2 litres K Sh 24/l  
2206.00.30 Other fermented beverages (for example, chibuku) K Sh 24/l 
2206.00.90 Other fermented beverages; mixtures  of fermented bevera ges and non-alcoholic 
beverages not elsewhere specified or included K Sh 24/l 
2207.10.00 Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol. or higher K Sh 90 or 35%/l proof 
2207.20.00 Ethyl alcohol and other spirits, dena tured of any strength K Sh 90 or 35%/l proof 
2208.20.11 Brandy in containers holding 2 litres or less K Sh 100 or 65%/l proof 
2208.20.19 Brandy in containers holding mo re than 2 litres K Sh 100 or 65%/l proof 
Table AIII.1 (cont'd) WT/TPR/S/271/KEN Trade Policy Review 
Page A2-260 
  
 HS code Product description Excise duty 
2208.20.91 Other spirits obtained by distilling grape wine or grape marc in containers holding 
2 litres or less K Sh 100 or 65%/l proof 
2208.30.10 Whiskies in containers holding 2 litres or less K Sh 100 or 65%/l proof 
2208.30.90 Whiskies in containers holding mo re than 2 litres K Sh 100 or 65%/l proof 
2208.40.10 Rum and tafia in containers holdi ng 2 litres or less K Sh 100 or 65%/l proof 
2208.40.90 Rum and tafia in containers holding more than 2 litres  K Sh 100 or 65%/l proof 
2208.50.10 Gin and Geneva in containers holdi ng 2 litres or less K Sh 100 or 65%/l proof 
2208.50.90 Gin and Geneva in cont ainers holding more than 2 litres  K Sh 100 or 65%/l proof 
2208.60.10 Vodka in containers holding 2 litres or less K Sh 100 or 65%/l proof 
2208.60.90 Vodka in containers holding more  than 2 litres K Sh 100 or 65%/l proof 
2208.70.10 Liqueurs and cordials in containers holding 2 litres or less K Sh 100 or 65%/l proof 
2208.70.90 Liqueurs and cordials in containers hol ding more than 2 litres  K Sh 100 or 65%/l proof 
2208.90.10 Fruit brandy not made from distilling grape wine or gr ape marc in containers holding 
2 litres or less K Sh 100 or 65%/l proof 
2208.90.20 Fruit brandy not made from distilling grape wine or gr ape marc in containers holding 
more than 2 litres  K Sh 100 or 65%/l proof 
2208.90.30 Other spirits and other spirituous bevera ges in containers holding 2 litres or less 60% 
2208.90.90 Other spirits and other spirituous  beverages in containers holding more than 2 litres  K Sh 100 or 65%/l proof 
Tobacco   
2402.10.00 Cigars, cheroots and ciga rillos, containing tobacco 30% 
2403.10.00 Smoking tobacco, whether or not contai ning tobacco substitutes in any proportion 130% 
2403.91.00 Homogenised or "r econstituted" tobacco 130% 
2403.99.90 Other manufactured tobacco a nd manufactured tobacco substitutes 130% 
Other-free   
2709.00.10 Condensates K Sh 3,112.50/'000 l@20°C 
Petroleum-free   
2710.11.11 Aviation spirit K Sh 19,895/'000 l@20°C 
2710.11.12 Motor Spirit (gasoline), premium K Sh 19,895/'000 l@20°C 
2710.11.13 Motor spirit (gasoline), regular K Sh 19,505/'000 l@20°C 
2710.11.14 Spirit type jet fuel K Sh 19.895/'000 l@20°C 
2710.11.15 Special boiling point spirit a nd white spirit K Sh 8,500/'000 l@20°C 
2710.11.19 Other light oils and preparations K Sh 8,500/'000 l@20°C 
2710.19.10 Partly refined (including topped crude) K Sh 1,450/'000 l@20°C 
2710.19.21 Kerosene type jet fuel K Sh 5, 755/'000 l@20°C 
2710.19.22 Other Kerosene K Sh 7,205/'000 l@20°C 
2710.19.29 Other medium petroleum oils and preparations K Sh 5,300/'000 l@20°C 
2710.19.31 Diesel oil (industrial heavy, black, for low speed  marine and stationary engines) K Sh 3,700/'000 l@20°C 
2710.19.32 Gas oil (automotive, light, amber, for high speed engines) K Sh 10,305/'000 l@20°C 
2710.19.33 Other gas oils K Sh 6,300/'000 l@20°C 
2710.19.34 Residual fuel oils (marine, furnace and si milar fuel oils) of a kinematics viscosity of 
125 centistokes K Sh 600/'000 l@20°C 
2710.19.35 Residual fuel oils (marine, furnace and si milar fuel oils) of a kinematics viscosity of 
180 centistokes K Sh 600/'000 l@20°C 
2710.19.36 Residual fuel oils (marine, furnace and si milar fuel oils) of a kinematics viscosity of 
250 centistokes K Sh 600/'000 l@20°C 
2710.19.37 Other residual fuel oils K Sh 600/'000 l@20°C 
Petroleum   
2712.10.00 Petroleum jelly 10% 
Cosmetics   
3304.10.00 Lip make-up preparations 10% 
3304.20.00 Eye make-up preparations 10% 
3304.30.00 Manicure or pedicure preparations 10% 
3304.91.00 Beauty and skin care powders, including sunscreen or sun tan preparations whether or 
not compressed 10% 
Table AIII.1 (cont'd) EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-261 
 
 
 HS code Product description Excise duty 
3304.99.00 Other beauty or make-up preparations a nd preparations for the care of the skin (other 
than medicaments), including sunscreen or sun tan preparations 10% 
3305.10.00 Shampoos 10% 
3305.20.00 Preparations for permanent wa ving or straightening of hair 10% 
3305.30.00 Hair lacquers 10% 
3305.90.00 Other preparations for use on the hair 10% 
3306.10.00 Dentifrices, in individual retail packages 10% 
3307.10.00 Pre-shave, shaving or after-shave cream 10% 
3307.20.00 Personal deodorants and antiperspirants 10% 
3307.30.00 Perfumed salt and other bath preparations 10% 
3307.49.00 Other preparations for perfuming or deodorizing rooms, including odoriferous 
preparations use during religious rites 10% 
3307.90.20 Perfumed petroleum jelly 10% 
3307.90.30 Perfumed papers and pa pers impregnated or coated with perfumes or cosmetics 10% 
3307.90.40 Wadding, felt and non-wove n impregnated, coated or covered with perfumes or 
cosmetics 10% 
3307.90.90 Other depilatories and ot her perfumery, cosmetic or to ilet preparations, not elsewhere 
specified or included 10% 
Source:  Information provided by the Kenyan authorities. WT/TPR/S/271/KEN Trade Policy Review 
Page A2-262 
  
 Table AIII.2 
Threshold matrix for class A procuring entities 
Procurement method Maximum or minimu m expenditure per procurement method 
 Goods Works Services 
International open tender (s71 
of the Act) Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the particular procurement Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the particular procurement Maximum level of expenditure 
shall be determined by the 
funds allocated in the budget for the particular procurement 
 There is no minimum level of 
expenditure under this method There is no minimum level of 
expenditure under this method There is no minimum level of 
expenditure under this method 
National open tender (s54(2) of the Act) Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the 
funds allocated in the budget 
for the particular procurement 
 When using this method the 
minimum expenditure that 
requires advertising is 
K Sh 6,000,000 When using this method the 
minimum expenditure that 
requires advertising is 
K Sh 6,000,000 When using this method the 
minimum expenditure that 
requires advertising is 
K Sh 3,000,000 
Restricted tender under (s73(2)(a) of the Act) Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the 
funds allocated in the budget 
for the particular procurement 
 Minimum level of expenditure 
is K Sh 20,000,000, below this 
threshold use open tender Minimum level of expenditure 
is K Sh 20,000,000, below this 
threshold use open tender Minimum level of expenditure 
is K Sh 20,000,000, below this 
threshold use open tender 
Restricted tender under (s73(2)(b) of the Act) Maximum level of expenditure 
shall be K Sh 20,000,000, above 
this threshold use open tender Maximum level of expenditure 
shall be K Sh 20,000,000, above 
this threshold use open tender Maximum level of expenditure 
shall be K Sh 20,000,000, 
above this threshold use open 
tender 
 Minimum level of expenditure 
is K Sh 1,000,000, below this 
threshold use request for 
quotations Minimum level of expenditure 
is K Sh 2,000,000, below this 
threshold use request for 
quotations Minimum level of expenditure 
is K Sh 1,000,000, below this 
threshold use request for 
quotations 
Restricted tender under (s73(2)(c) of the Act) Maximum level of expenditure 
shall be K Sh 20,000,000, above 
this threshold use open tender Maximum level of expenditure 
shall be K Sh 20,000,000, above 
this threshold use open tender Maximum level of expenditure 
shall be K Sh 20,000,000, 
above this threshold use open 
tender 
 Minimum level of expenditure 
is K Sh 1,000,000, below this 
threshold use request for 
quotations Minimum level of expenditure 
is K Sh 2,000,000, below this 
threshold use request for 
quotations Minimum level of expenditure 
is K Sh 1,000,000, below this 
threshold use request for 
quotations 
Request for proposals (s76(1) of the Act) This method is not applicable 
for procurement goods This method is not applicable 
for procurement of works No minimum or maximum 
expenditure under this method 
provided the conditions under 
this section are met 
Direct procurement under (s74(2) and (3) of the Act) No minimum or maximum 
expenditure under this method 
provided the conditions under 
this section are met No minimum or maximum 
expenditure under this method 
provided the conditions under 
this section are met No minimum or maximum 
expenditure under this method 
provided the conditions under 
this section are met 
Request for quotations (s88 of 
the Act) Maximum level of expenditure 
under this method is 
K Sh 1,000,000 Maximum level of expenditure 
under this method is 
K Sh 2,000,000 Maximum level of expenditure 
under this method is 
K Sh 1,000,000 
Low value procurement (s90 
of the Act) Maximum level of expenditure 
under this method is 
K Sh 30,000 per procurement per item Maximum level of expenditure 
under this method is 
K Sh 30,000 per procurement per item Maximum level of expenditure 
under this method is 
K Sh 30,000 per procurement per item 
 There is no minimum 
expenditure for the use of this 
method There is no minimum 
expenditure for the use of this 
method There is no minimum 
expenditure for the use of this 
method 
Source:  Public Procurement Regulations, 2006. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-263 
 
 
 Table AIII.3 
Threshold matrix for class B procuring entities 
Procurement method Maximum or minimu m expenditure per procurement method 
 Goods Works Services 
International open tender (s71 
of the Act) Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the 
funds allocated in the budget 
for the particular procurement 
 There is no minimum level of 
expenditure under this method There is no minimum level of 
expenditure under this method There is no minimum level of 
expenditure under this method 
National open tender (s54(2) 
of the Act) Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the 
funds allocated in the budget 
for the particular procurement 
 When using this method the 
minimum expenditure that 
requires advertising is 
K Sh 4,000,000 When using this method the 
minimum expenditure that 
requires advertising is 
K Sh 4,000,000 When using this method the 
minimum expenditure that 
requires advertising is 
K Sh 2,000,000 
Restricted tender under (s73(2)(a) the Act) The maximum level of 
expenditure shall be determined 
by the funds allocated in the 
budget for the particular 
procurement The maximum level of 
expenditure shall be determined 
by the funds allocated in the 
budget for the particular 
procurement The maximum level of 
expenditure shall be 
determined by the funds 
allocated in the budget for the 
particular procurement 
 The minimum level of 
expenditure is K Sh 5,000,000, above this threshold, use open 
tender The minimum level of 
expenditure is K Sh 5,000,000, below this threshold, use open 
tender The minimum level of 
expenditure is K Sh 5,000,000, below this threshold, use open 
tender 
Restricted tender under (s73(2)(b)) The maximum level of 
expenditure shall be 
K Sh 4,000,000, above this 
threshold use open tender The maximum level of 
expenditure shall be 
K Sh 4,000,000, above this 
threshold use open tender The maximum level of 
expenditure shall be 
K Sh 4,000,000, above this 
threshold use open tender 
 The minimum level of 
expenditure is K Sh 1,000,000, 
below this threshold, use request 
for quotations The minimum level of 
expenditure is K Sh 2,000,000. 
below this threshold, use request 
for quotations The minimum level of 
expenditure is K Sh 1,000,000, 
below this threshold, use 
request for quotations 
Restricted tender under (s73(2)(c) of the Act) The maximum level of 
expenditure shall be 
K Sh 4,000,000, above this 
threshold use open tender The maximum level of 
expenditure shall be 
K Sh 4,000,000, above this 
threshold use open tender The maximum level of 
expenditure shall be 
K Sh 4,000,000, above this 
threshold use open tender 
 The minimum level of 
expenditure is K Sh 1,000,000, 
below this threshold, use request 
for quotations The minimum level of 
expenditure is K Sh 2,000,000, 
below this threshold, use request 
for quotations The minimum level of 
expenditure is K Sh 1,000,000, 
below this threshold, use 
request for quotations 
Request for proposals (s76(1) of the Act) This method is not applicable 
for goods This method is not applicable 
for works Maximum level of expenditure 
shall be determined by the 
funds allocated in the budget 
for the particular procurement 
There is no minimum expenditure for the use of this 
method 
Request for quotations (s88 of the Act) Maximum level of expenditure 
under this method is 
K Sh 1,000,000 Maximum level of expenditure 
under this method is 
K Sh 2,000,000 Maximum level of expenditure 
under this method is 
K Sh 1,000,000 
Table AIII.3 (cont'd) WT/TPR/S/271/KEN Trade Policy Review 
Page A2-264 
  
 Procurement method Maximum or minimu m expenditure per procurement method 
 Goods Works Services 
Direct procurement under 
(s74(2) and (3) of the Act) No minimum or maximum 
expenditure under this method 
provided the conditions under this section are met No minimum or maximum 
expenditure under this method 
provided the conditions under this section are met No minimum or maximum 
expenditure under this method 
provided the conditions under this section are met 
Low value procurement (s90 
of the Act) Maximum level of expenditure 
under this method is 
K Sh 10,000 per procurement per item Maximum level of expenditure 
under this method is 
K Sh 10,000 per procurement per item Maximum level of expenditure 
under this method is 
K Sh 10,000 per procurement per item 
 There is no minimum 
expenditure for the use of this 
method There is no minimum 
expenditure for the use of this 
method There is no minimum 
expenditure for the use of this 
method 
Source:  Public Procurement Regulations, 2006. EAC-Kenya WT/TPR/S/271/KEN 
 Page A2-265 
 
 
 Table AIII.4 
Threshold matrix for class C procuring entities 
Procurement method Maximum or minimu m expenditure per procurement method 
 Goods Works Services 
International open tender (s71 
of the Act) Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the 
funds allocated in the budget 
for the particular procurement 
 There is no minimum level of 
expenditure under this method There is no minimum level of 
expenditure under this method There is no minimum level of 
expenditure under this method 
National open tender (s54(2) 
of the Act) Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the funds 
allocated in the budget for the 
particular procurement Maximum level of expenditure 
shall be determined by the 
funds allocated in the budget 
for the particular procurement 
 When using this method the 
minimum expenditure that 
requires advertising is 
K Sh 3,000,000 When using this method the 
minimum expenditure that 
requires advertising is 
K Sh 3,000,000 When using this method the 
minimum expenditure that 
requires advertising is 
K Sh 1,000,000 
Restricted tender under (s73(2)(a) the Act) The maximum level of 
expenditure shall be determined 
by the funds allocated in the 
budget for the particular 
procurement The maximum level of 
expenditure shall be determined 
by the funds allocated in the 
budget for the particular 
procurement The maximum level of 
expenditure shall be 
determined by the funds 
allocated in the budget for the 
particular procurement 
 The minimum level of 
expenditure is K Sh 500,000, above this threshold, use open 
tender The minimum level of 
expenditure is K Sh 500,000, below this threshold, use open 
tender The minimum level of 
expenditure is K Sh 500,000, below this threshold, use open 
tender 
Restricted tender under (s73(2)(b)) The maximum level of 
expenditure shall be 
K Sh 3,000,000, above this 
threshold use open tender The maximum level of 
expenditure shall be 
K Sh 3,000,000, above this 
threshold use open tender The maximum level of 
expenditure shall be 
K Sh 3,000,000, above this 
threshold use open tender 
 The minimum level of 
expenditure is K Sh 500,000, 
below this threshold, use request 
for quotations The minimum level of 
expenditure is K Sh 500,000. 
below this threshold, use request 
for quotations The minimum level of 
expenditure is K Sh 500,000, 
below this threshold, use 
request for quotations 
Restricted tender under (s73(2)(c) of the Act) The maximum level of 
expenditure shall be 
K Sh 3,000,000, above this 
threshold use open tender The maximum level of 
expenditure shall be 
K Sh 3,000,000, above this 
threshold use open tender The maximum level of 
expenditure shall be 
K Sh 3,000,000, above this 
threshold use open tender 
 The minimum level of 
expenditure is K Sh 500,000, 
below this threshold, use request 
for quotations The minimum level of 
expenditure is K Sh 500,000, 
below this threshold, use request 
for quotations The minimum level of 
expenditure is K Sh 500,000, 
below this threshold, use 
request for quotations 
Request for proposals (s76(1) of the Act) This method is not applicable 
for goods This method is not applicable 
for works Maximum level of expenditure 
shall be determined by the 
funds allocated in the budget 
for the particular procurement 
There is no minimum expenditure for the use of this 
method 
Request for quotations (s88 of the Act) Maximum level of expenditure 
under this method is 
K Sh 500,000 Maximum level of expenditure 
under this method is 
K Sh 500,000 Maximum level of expenditure 
under this method is 
K Sh 500,000 
Direct procurement under (s74(2) and (3) of the Act) No minimum or maximum 
expenditure under this method 
provided the conditions under 
this section are met No minimum or maximum 
expenditure under this method 
provided the conditions under 
this section are met No minimum or maximum 
expenditure under this method 
provided the conditions under 
this section are met 
Table AIII.4 (cont'd) WT/TPR/S/271/KEN Trade Policy Review 
Page A2-266 
  
 Procurement method Maximum or minimu m expenditure per procurement method 
 Goods Works Services 
Low value procurement (s90 
of the Act) Maximum level of expenditure 
under this method is K Sh 5,000 
per procurement per item Maximum level of expenditure 
under this method is K Sh 5,000 
per procurement per item Maximum level of expenditure 
under this method is 
K Sh 5,000 per procurement per item 
 There is no minimum 
expenditure for the use of this 
method There is no minimum 
expenditure for the use of this 
method There is no minimum 
expenditure for the use of this 
method 
Source:  Public Procurement Regulations, 2006.