ANNEX 1 
KENYA  EAC-Kenya WT/TPR/S/171/KEN 
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 CONTENTS 
Page 
I. ECONOMIC ENVIRONMENT 35 
(1) M AJOR FEATURES OF THE ECONOMY  35 
(2) R ECENT ECONOMIC DEVELOPMENTS  36 
(3) T RADE AND INVESTMENT PERFORMANCE  38 
(i) Trade in goods and services 40 
(ii) Investment 43 
(4) O UTLOOK  43 
II. TRADE AND INVESTMENT REGIMES 45 
(1) G ENERAL FRAMEWORK  45 
(2) P OLICY OBJECTIVES  48 
(3) T RADE AGREEMENTS  48 
(4) I NVESTMENT FRAMEWORK  50 
III. TRADE POLICIES AND PRACTICES BY MEASURE 52 
(1) I NTRODUCTION  52 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  52 
(i) Business registration, customs procedures, and valuation 52 
(ii) Tariffs 53 
(iii) Other duties and charges 54 
(iv) Import prohibitions, restrictions, and licensing 55 
(v) Contingency trade remedies 55 
(vi) Standards and technical requirements 56 
(vii) Other measures 60 
 (3) M EASURES DIRECTLY AFFECTING EXPORTS  60 
(i) Procedures 60 
(ii) Export taxes and charges 60 
(iii) Export prohibitions, re strictions, and licensing 61 
(iv) Export subsidies and incentives 61 
(v) Export finance, insurance, and guarantees 63 
(vi) Export promotion and marketing assistance 63 
 (4) M EASURES AFFECTING PRODUCTION AND TRADE  63 
(i) Incentives 63 
(ii) Government procurement 64 
(iii) State-trading enterprises, st ate ownership, and privatization 65 
(iv) Competition policy and price controls 67 
(v) Intellectual property rights 68 
IV. TRADE POLICIES BY SECTOR 73 
 (1) I NTRODUCTION  73 
 (2) A GRICULTURE AND RELATED ACTIVITIES  73 
(i) Main features 73 
(ii) Policy developments 74 
(iii) Selected products 77 WT/TPR/S/171/KEN  Trade Policy Review 
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    P a g e  
 (3) M INING , QUARRYING , AND ENERGY  85 
 (i) Mining and quarrying 85 
 (ii) Energy 88 
 (4) M ANUFACTURING  91 
 (5) S ERVICES  94 
 (i) Financial services 94 
 (ii) Telecommunications and postal services 97 
 (iii) Transport 99 
 (iv) Tourism 103 
REFERENCES   107 
APPENDIX TABLES  109 
 EAC-Kenya WT/TPR/S/171/KEN 
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 CHARTS 
Page 
I. ECONOMIC ENVIRONMENT 
I.1 Structure of merchandise trade, 1999-04 41 
I.2 Direction of merchandise trade, 1999-04 42 
TABLES 
I. ECONOMIC ENVIRONMENT 
I.1 Economic indicators, 1999-04 37 
I.2 Balance of payments, 1999-04 39 
I.3 Investment, 1999-03 43 
 
II. TRADE AND INVESTMENT REGIMES 
II.1 Main trade-related laws, June 2006 46 
II.2 Selected notifications to the WTO, June 2006 49 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Key EPZ performance indicators, 2000-05 62 
III.2 Privatized enterprises, 1991-02 66 
III.3 Key state-owned enterprises scheduled for privatization during 2003-07 67 
III.4 Kenya's membership of WIPO treaties, 2006 68 
III.5 Overview of IPR protection, 2006 69 
IV. TRADE POLICIES BY SECTOR 
IV.1 Production of crops at current prices, 2000-04 77 
IV.2 Production and average yield of tea and coffee by type of grower, 2000-04 79 
IV.3 Exports of fresh horticultural produce, 2000-04 81 
IV.4 Production and consumption of sugar, 2000-04 81 
IV.5 Production and sale of livestock and dairy products, 2000-04 83 
IV.6 Fish production, 2000-04 84 
IV.7 Forest products, 2000-04 85 
IV.8 Mineral production, 2000-04 86 
IV.9 Mining licences, 2006 87 
IV.10 Production, trade, and consumption of energy, 2000-04 88 
IV.11 Installed capacity and generation of electricity, 2000-04 89 
IV.12 Petroleum supply and demand, 2000-04 90 
IV.13 Manufacturing production index, 2000-04 92 
IV.14 Selected telecommunication indicators, 2000-04 98 
IV.15 Transport output, 2000-05 100 
IV.16 Railway traffic, 2000-05 102 
IV.17 Tourism in Kenya, 2000-05 104 
IV.18 Regulated tourist enterprises  106 WT/TPR/S/171/KEN  Trade Policy Review 
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 APPENDIX TABLES 
Page 
I. ECONOMIC ENVIRONMENT 
AI.1 Structure of exports, 1999-04 111 
AI.2 Structure of imports, 1998-04 112 
AI.3 Destination of exports, 1999-04 113 
AI.4 Origin of imports, 1998-04 114 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
AIII.1 Products subject to excise duties, 2006 115 
AIII.2 Products subject to prohibition or licensing, February 2006 118 
AIII.3 Products subject to pre-export verification of conformity to standards, May 2006 121 
IV. TRADE POLICES AND PRACTICES BY SECTOR 
AIV.1 Summary of Kenya's specifi c commitments in services 125 
 
 
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                                                      I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. The Republic of Kenya encompasses a landmass of  586,650 square kilometres (8.1% arable) 
on Africa's eastern coast.1  In 2003, 60.1% of Kenya's estimat ed population of 32.2 million lived in 
rural areas.2  During 1999-03, its population expanded at an average annual rate of 2.9%.  Nairobi 
(1.3 million people) is the capital and is situated in  the most densely populated region;  it is also 
Kenya's main centre of commercial activity.3  According to the most recent census, Kenya's 
population is relatively young:  38.4% in the 0-13 range, 58.3% in the 14-64 range and 3.3% were 65 
or older;  most live in central and western regions, the most fertile agricultural areas.    
2. Performance in poverty reduction stagnated until 2003 when several projects were initiated.  
In 2004, Kenya had an estimated real GDP per ca pita of US$416, down from US$426 in 2000, and an 
estimated income per capita of US$400, up from US$360 in 1999.4  Kenya's UNDP human 
development index, which has worsened signifi cantly since the early 1990s, ranked it 154 out of 
177 countries in 2003, below Uganda but above Tan zania.  In 2003, 22.8% of the population lived on 
up to US$1 a day (58.3% on up to US$2 a day).5 
3. Kenya has the largest economy amongst the EAC countries.  Moreover, Kenya's actual GDP 
may be underestimated.6  As a proportion of GDP, Kenya's three main sectors in 2004 were:  services 
(about 60%), of which public admini stration is the main component (s ome 16% of GDP);  agriculture, 
including forestry and fishing (around 27%);  and manufacturing (about 11%).7  Foreign trade 
(exports and imports) as a proporti on of GDP remained stable duri ng 2000-03 at an average of 41%.8  
In 2004, this proportion increased to 45% due to  the higher value of imports reflecting higher 
international petroleum prices. 
4. Kenya accepted the obligations of Article VIII of  the IMF agreement in February 1994, and 
maintains no exchange rate restriction on current transactions.  The objective of monetary policy in 
Kenya is to maintain internal price stability and to provide liquidity to a market-based financial 
system.9  Kenya maintains a managed floating exchange  rate regime with Central Bank of Kenya 
(CBK) interventions to smooth out unwarranted fluctuations of the Kenyan Shilling (K Sh).10  The 
exchange rate against the U.S. dollar remained relatively stable during the period under review 
(K Sh 72.9 per US$ at end 1999, K Sh 74.0 per US$ in December 2005).   
5. Kenya has had on-off relations with the donor community due principally to apprehensions 
related to governance and manageme nt of donations in Kenya.  In November 2003, Kenya agreed 
 
1 For further geographical information on Kenya, see WTO (2000). 
2 Central Bank of Kenya (2004), p. 85;  and UNDP (2005). 
3 Kenya Investment Authority online information.  Available at http://www.investmentkenya.com/ 
index.asp.   
4 Data on GDP per capita were calculated with base year 2001 from Central Bureau of Statistics online 
information.  Available at:  http://www.cbs.go.ke.  Da ta on income per capita is available from African 
Development Bank online information.  Available at:  http://www.afdb.org. 
5 UNDP (2005). 
6 IMF (2003a), p. 14. 
7 Since 2001, Kenya's official national accounts include informal activities. 
8 Calculations by the WTO Secretariat on the basis of  trade data from Bureau of National Statistics of 
Kenya online information.  Available at http://www.bns.go.ke. 
9 The Central Bank of Kenya Act, as amended in 1996;  Article 4.  
10 Central Bank of Kenya online information.  Available at:  http://w ww.centralbank.go.ke. WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-36 
 
 
                                                      with the IMF on a Poverty Reduction and Growth Facility (PRGF) programme that was to provide 
US$250 million over three years;  a further US$4 bill ion was pledged at a consultative group meeting 
of donor countries.  However, both EU and IM F funds for budget support were deferred in 2004 due 
to governance concerns.  The IMF nevertheless endorsed the first year of the PRGF at the end of 2004 
and released further funds in January 2006, while the EC deferment was lifted temporarily in early 
2006.  In 2003, the Government also drafted its  Economic Recovery Strategy, which takes into 
account the PRSP but covered other issues upon which many subsequent public policy and budgetary 
decisions have been based, particularly those concerning poverty-reducing projects.  In June 2004, the World Bank approved a Country Assistance Strategy (CAS) that was linked closely to Kenya's own 
PRSP.  Thus, in 2005, there were nine World Bank projects under the CAS initiative, totalling 
US$418.8 million for the period 2003-05.
11   
(2) RECENT ECONOMIC DEVELOPMENTS  
6. Kenya's economic activity has picked up since 2003, after years of irregular performance.  
However, external shocks, mainly high oil prices and droughts, have affected output.  Inflation 
increased significantly in 2003, making real interest rates negative, but tighter monetary policy seems to have contained it.  Total factor productivity has decreased since the early 1990s (-0.27 for 2000-
04), as has output per worker (-2.2% during 1996-01).
12  In addition, during 1998-02, unevenness in 
income distribution worsened:  the poorest 20% of  the population received 6% of national income 
whilst the upper 20% took 49.1%.13 
7. Real GDP growth picked up to 4.3% in 2003 (Table I.1):  the largest contributors during 
2003-04 were transport and communica tions, retailing and manufacturing.  Tourism, Kenya's leading 
foreign exchange earner, was negatively affected by  terrorist acts in 1998 and 2002, lack of adequate 
infrastructure, and competition from other regional des tinations.  The situation seemed to have turned 
around by 2004, as visitor arrivals increased by 21.1% due to a renewal of European charter flights, 
but the subsector still needs significant investment in accommodation and road infrastructure (for maintenance in particular), and in overall security.
14   
8. The unemployment rate was estimated at 14.6% in 1999, and significantly higher in urban 
areas.  A 2003 study found that informal employme nt had outgrown formal employment making it the 
main form of employment.15  This might have led to less sophi sticated and lower-skilled production 
arrangements, thus contributing to Kenya's low growth performance.  In 2003, commercial, social and personal services accounted for the biggest share of employment (42%), followed by agriculture 
(18%), manufacturing (14%), and wholesale and retail (9%).
16 
9. After having decreased during 2000- 02, inflation rose consistently to reach its highest level 
since 1995 (19% in September 2004).  The reasons fo r this increase were:  an excessively loose 
monetary policy (i.e. fast broad-m oney growth), poor harvest, high energy prices, and a deterioration 
of the currency.17  The increase in inflation made real inte rest rates negative.  In response, the CBK 
decelerated broad-money growth to an annual rate of 7.5% in 2004/05 in an effort to curb inflation.  
Additionally, as part of the PRGF, Kenya pledged to reduce government borrowing from local 
 
11 World Bank (2005). 
12 IMF (2004b). 
13 Economist Intelligence Unit (2005),  p. 15. 
14 Economist Intelligence Unit (2005), pp. 38-39. 
15 IMF (2003b), p. 11. 
16 IMF (2004a), p. 77. 
17 IMF (2004a), p. 16. EAC-Kenya WT/TPR/S/171/KEN 
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 sources to avoid its crowding-out effects;  if implem ented fully, this should also contribute to lower 
domestic interest rates.  According to the authoriti es, Kenya's long-term inflation target is around 5%. 
Table I.1  
Economic indicators, 1999-04  
  1999 2000 2001 2002 2003 2004a
Miscellaneous             
Nominal GDP at factor costs (K Sh billion) 805.0 858.9 912.8 922.3 1,016. 2 1,141.8 
GDP per capita (current market prices in US$) .. 430.2 429.5 421.4 466.6 484.9 
Gross national income (US$ million) 10,041 10,074 11,059 12,345 14,249 .. 
  (per cent) 
Real GDP growth, market prices .. 0.6 4.4 0.4 2.8 4.3 
Ratio of exports to imports 59.4 54.3 50.9 65.7 65 59 
Gross domestic investment (% of GDP at  market prices) .. 17.4 19.2 16.3 17.4 18.3 
Savings (% of GDP at market prices) .. 6.7 5.3 4.9 6.2 8.1 
Consumer price index growth (end of period) 5.8 10.0 5.8 2.0 9.8 11.6 
Exchange rate (K Sh/US$, end of  period) 72.9 78.0 78.6 77.1 76.1 77.3 
Current account (% of GDP at market prices) .. -1.9 -2.9 -1.3 0.4 .. 
Monetary sector (percentage change) 
Broad money (M3) 6.5 4.9 2.8 11.7 11.9 13.7 
Gross official reserves (US$ million,  end of period) 791 897 1,064 1,067 1,480 1,519 
Gross official reserves (months of  imports of goods and non-factor 
services) 2.9 2.8 3.2 3.3 4.2 3.5 
Share of GDP (at factor prices) (per cent) 
Agriculture, forestry, and fishing 32.8 32.8 31.1 28.8 28.2 27.0 
Manufacturing 11.4 11.6 10.9 11.1 10.8 11.1 
Electricity, gas, and water supply 2.1 2.2 2.2 2.3 2.3 2.0 
Mining and quarrying 0.36 0.48 0.54 0.55 0.59 0.56 
Services 53.3 52.9 55.3 57.3 58.1 59.3 
  Public administration 14.2 14.2 14.7 16.1 16.8 16.5 
  Construction 3.4 3.2 3.5 3.5 3.6 4.0 
  Wholesale and retail trade (incl. restaurants and hotels) 11.3 11.6 11.5 11.4 11.3 12.5 
  Transport and communication 9.2 10.0 10.8 11.3 11.2 11.8 
  Financial services 9.2 7.1 7.9 7.4 8.1 7.4 
  Other services  5.9 6.8 6.8 7.5 7.2 7.1 
Government finance        
Overall balance to GDP (fiscal years ending in June)       
  Including grants   -0.6 0.2 -1.3 -3.0 -3.4 -0.4 
  Excluding grants .. -0.3 -4.1 -4.1 -5.0 -1.6 
Total public debt stock (US$ billion, fiscal year to 30 June) .. 7.7 7.7 7.9 9.29 9.4 
Memorandum        
Grants (per cent of GDP) .. 1.2 11.1 4.0 6.1 9.2 
External debt stock (per cent of GDP) .. 42.2 39.5 36.6 37.3 36.4 
External debt service (per cent of exports) 27.3 19.1 14.3 10.2 10.3 6.5 
Terms of trade 86 84 79 78 81 .. 
.. Not available.  
a Preliminary. 
Note: Data for the current account in 2003 as well as all figures for 2004 are preliminary.  External debt service ratio was ca lculated 
after 2004 Paris Club rescheduling. 
Source:  Central Bureau of Statis tics of Kenya online information.  Available at:  http://www.cbs.go.ke;  Central Bank of 
Kenya online information.  Available at:  http://www.centralbank.go.ke;  and data for the external debt service 
from IMF (2004a), Kenya –  Selected Issues and Statistical Appendix , p. 94. 
10. The fiscal account (including grants) deficits increased during 1999-04 (with the exception of 
2000);  it peaked at 3.4% of GDP in 2003 (Table I.1).  The combination of a reduction of tax rates to WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      favour private sector activity, governance problems, and slow economic growth contributed to a 
stagnation in total revenues as a proportion of GDP  during 2000-04 (an average of 21.2% in 2004).18  
At the same time, public expenditure expanded during 2000-03 to reach 25.7% of GDP, through 
increased public wages and salaries, in terest payments, and support for parastatal companies;  in 2004, 
public expenditure dropped to 23.5% of GDP.  St arting in 2003, the Government has redirected 
budgetary resources to implement poverty reducing proj ects, in line with Kenya's PRGF commitments 
as well as projects under the World Bank's CAS.  In 2005,  the reforms were revi sed to achieve fiscal 
sustainability, to restructure expenditure for grow th and poverty reduction,  and to improve public 
sector service delivery.19   
11. Kenya's debt is considered to be sustainable.  Nonetheless, its debt was rescheduled with the 
Paris Club members in 2003, along with increased grants and concessional loans.  During 2000-04, 
total public debt decreased from 70.1% to 62.3% of  GDP, and the share of foreign debt in GDP 
decreased at an annual average rate of 6.3% to reach 35.4% in 2004;  domestic debt increased at an annual average rate of 2.9% to account for 26.9% of  GDP.  This reflected a deterioration in Kenya's 
financial external position duri ng the period under review.  In 2004/05, the projected stock of 
domestic debt to GDP dropped to 22.3%.  In Octobe r 2004, 41.9% of principal foreign debt was with 
multilateral creditors (principally the World Bank) and 33.7% with bilateral creditors (mostly Paris 
Club members).
20 
(3) TRADE AND INVESTMENT PERFORMANCE  
12. During 1999-04, the balance of payments improved steadily, except in 2002:  from 2000, it 
expanded at an annual average rate of 40.5%, reach ing 2.8% of GDP in 2004 (Table I.2).  During the 
same period, the current account fluctuated:  cont racting until 2001 (-3.3% of GDP), then expanding 
until 2003 (0.5% of GDP), to contract again marked ly in 2004 (-3.4% of GDP).  During 1999-03, the 
capital account surplus increased at an annual average rate of 33.5%, and the financial account grew, 
though more erratically. 
13. Transfers play a key role in the current accoun t;  they are the second biggest net contributor 
after the balance of goods (Table I.2).  In particular, the turnaround in the balance of payments in 2003 was driven by a significant increase in credit transfers (24.9%), along with a reduction in debit 
income (20.7%), and a net increase in government services (21.3%).  In 2004, the current account 
contracted again through the balance of goods, as imports grew significantly faster than exports 
(27.9% and 12.3% respectively).  Other investment is the principal component of the financial 
account (88% in 2004) and has a significant impact:  in 2002, when long- and short-term credit 
decreased, by 103.4% and 29.5% respectively, the account contracted approximately one-and-a-half 
fold (a K Sh 32.1 billion turnaround).   Remittances play a significant role although they have 
contacted in recent years;  private transfers had declined to US$581 million in the year ending in 
March 2005.
21 
 
18 Central Bank of Kenya (2004), p. 65;  and Central Bureau of Statistics (2005).  Data on GDP at 
factor prices are available online at http://www.cbs.go.ke. 
19 Government of Kenya (2005), p. 13-14. 
20 IMF (2004b), p. 43. 
21 Economist Intelligence Unit (2005), p. 7. EAC-Kenya WT/TPR/S/171/KEN 
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 Table I.2 
Balance of payments, 1999-04 
(K Sh million)  
 1999 2000 2001 2002 2003a2004b
Current account -6,303 -18,090 -30,120 -13,949 4,846 -39,032 
Goods -68,571 -96,112 -105,813 -78,514 -86,764 -139,779 
  Debit 192,116 231,874 254,405 248,766 270,982 346,800 
  Credit 123,545 135,762 148,592 170,252 184,218 207,020 
Transportation 9,837 5,302 9,341 12,171 15,513 .. 
  Debit 16,596 26,016 24,424 21,471 18,963 .. 
  Credit 26,433 31,318 33,765 33,642 34,476 .. 
Foreign travel 13,308 11,535 13,015 11,846 16,116 .. 
  Debit 8,059 10,018 11,241 9,889 9,652 .. 
  Credit 21,367 21,553 24,256 21,735 25,768 .. 
Other services - private -7,997 -12,120 -16,020 -11,491 -11,972 .. 
  Debit 10,865 14,644 20,301 14,152 15,790 .. 
  Credit 2,868 2,524 4,281 2,661 3,818 .. 
Government services, n.e.s. 10,456 13,305 15,906 13,660 16,568 .. 
  Debit 4,596 6,970 7,375 8,480 7,842 .. 
  Credit 15,052 20,275 23,281 22,140 24,410 .. 
Income -11,196 -10,140 -9,524 -11,250 -6,600 .. 
  Debit 13,426 13,566 13,142 14,036 11,126 .. 
  Credit 2,230 3,426 3,618 2,786 4,526 .. 
Current transfers 47,860 70,140 62,975 49,629 61,985 .. 
  Debit 334 442 126 151 177 .. 
  Credit 48,194 70,582 63,101 49,780 62,162 .. 
Capital account 3,894 3,775 4,043 6,393 12,381 .. 
  Debit 0 0 0 74 0 .. 
  Credit 3,894 3,775 4,043 6,467 12,381 .. 
Financial account 14,657 27,930 23,313 -8,886 28,111 .. 
Direct investment 972 8,448 417 1,591 6,049 .. 
  Debit 0 0 0 584 158 .. 
  Credit 972 8,448 417 2,175 6,207 .. 
Portfolio investment -560 -1,097 -111 -376 -2,862 .. 
  Debit 0 828 541 790 2,930 .. 
  Credit -560 -269 430 414 68 .. 
Other investment (net) 14,245 20,579 23,007 -10,101 24,924 .. 
  Long term -26,537 -14,860 -17,747 -38,563 -8,025 .. 
    Debit 40,014 19,674 37,273 37,895 33,270 .. 
    Credit 13,477 4,814 19,526 -668 25,245 .. 
  Short term 40,782 35,439 40,754 28,462 32,949 .. 
    Debit 5,227 401 520 613 836 .. 
    Credit 46,009 35,840 41,274 29,075 33,785 .. 
Errors and omissions -11,837 -5,372 15,835 16,699 -13,952 15,472 
Overall balance 411 8,243 13,071 257 31,386 32,105 
Reserve assets -411 -8,243 -13,071 -257 -31,386 -32,105 
  Special drawing rights (net) 0 0 0 0 0 .. 
  Reserve position in the fund (net) 96 62 42 -108 -129 .. 
  Foreign exchange (net) -515 -8,291 -13,133 -142 -31,236 .. 
  Other claims (net) 8 -14 20 -7 -21 .. 
.. Not available. 
a Preliminary. 
b Estimate. 
Source:  Central Bank of Kenya (2004), Statistical Bulletin, June. WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      (i) Trade in goods and services 
14. During 1999-04, Kenya's export base remained stable (Chart I.1) although total exports 
(excluding re-exports) decreased in value each year, except 2003 when they grew by 82%.  
Production growth allowed total exports to increase at  an annual average of 4.3% during the period to 
reach US$2.0 billion in 2004.  Agricultural produc ts dominate merchandise exports, representing an 
average of 62% during 1999-04 (Table AI.1);  they in creased at an annual average rate of 3.4% during 
the period under review to reach US$1,508.  Tea w as the principal export product with annual average 
earnings of US$410 million (23.1% of the total valu e of merchandise exports, on average), followed 
by coffee and other vegetables.  Exports of manuf actures remained essentially at the same level until 
2002, and then increased both in value and as a shar e of total merchandise exports;  re-exports of 
minerals have been recorded since 2004 (US$43.7 million).22   
15. The value of imports grew at an annual average of 10.4% during 1999-04 to reach 
US$4.6 billion.23  The structure of imports remained basi cally the same:  manufactured goods were 
the principal imports (63% of total merchandise im ports, on average, throughout the period), followed 
by fuels, which increased from 15.8% to 24.3%, and food products, which remained at an average of 
12.3% (Table AI.2).  Crude oil and gasoline were the main imports in 2004 (US$1.1 billion;  their 
value increased substantially over 2003, due to hi gh oil prices), followed by iron and steel products 
(US$277.6 million) and motor vehicles (US$218.3 million). 
16. During 1999-04, Africa remained Kenya's main export destination, particularly from 2002, 
capturing an average of 42% of total merchandise exports (including re-exports) (Chart I.2 and 
Table AI.3).  Europe was Kenya's second biggest e xport market capturing 35% of total annual exports 
on average during the period, followed by Asia (17. 4%) and America (2.7%).  Exports to East Asian 
countries expanded at an annual average of 9.8%  during 1999-04, accounting for most of Asia's 
increase (US$402.5 million in 2004).  The United Ki ngdom was by far the single biggest importer of 
Kenyan exports with a steady share of 14.2% on average during the period (US$281.6 million in 
2004). 
17. Asia was consistently the main source of Ke nya's imports throughout the period under review 
(Table AI.4), with a yearly average of 46% of total merchandise imports (US$1.6 billion).  At the 
same time, the share of imports from Europe contracted to 28% (US$1.3 billion), and imports from 
the Americas decreased at an annual average of 6.1% (to US$323.9 million).  During the period, 
imports from the Middle East expanded significantl y from US$457.3 to US$1.2 billion, particularly 
after 2003 when international oil prices increased.  The United Arab Emirates was the principal origin 
of Kenya's imports during the period, with an aver age of 11.1% (US$389.1 million) of the total.  The 
two other main sources were the United Kingdom and Saudi Arabia. 
18. Kenya's trade in services is dominated by tourism.   In particular, transport and foreign travel 
rebounded after a significant contraction in 2000 du e principally to increased competition and aging 
infrastructure: net trade in transport and foreign travel went from 1.1% and 1.5% of GDP in 1999 to 0.5% and 1.2%, respectively, in 2000.  During the whole period of 1999-03, however, they both showed solid annual average growth, of 12% and 5% respectively (around 1.4% of GDP each in 
2003) with the resumption of charter flights from  Europe and a strong international marketing 
campaign, in spite of a terrorist attack in 2002 and other security-related concerns. 
 
 
22 UNSD, Comtrade database. 
23 UNSD, Comtrade database. EAC-Kenya WT/TPR/S/171/KEN 
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 0%20%40%60%80%100%
1999 2000 2001 2002 2003 2004
0%10%20%30%40%50%60%70%80%90%100%
1999 2000 2001 2002 2003 2004Chart I.1                       
Structure of merchandise trade, 1999-04
(a) Exportsa
(b) Imports
a
Source:Includes re-exports.
WTO Secretariat calculations, based on UNSD, Comtrade database (SITC Rev.3 data).Other food
Electrical machines Iron and steelFood Chemicals Transport equipment
Other semi-manufactures Fuels OtherTea Cut flowers and foliage
Other fresh and chilled 
vegetablesFuels
Coffee, not roasted
Iron and steel
Non-electrical machinery Other primary productsOther semi-manufacturesChemicals
Other primary products Other
 WT/TPR/S/171/KEN  Trade Policy Review 
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 0% 20% 40% 60% 80% 100%199920002001200220032004Chart I.2     
Direction of merchandise trade, 1999-04
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%199920002001200220032004(a) Exportsa
(b) Imports
a
Source:Includes re-exports.
WTO Secretariat calculations, based on UNSD, Comtrade database (SITC Rev.3 data).America Egypt Pakistan
Other Asia United Kingdom Rwanda
China Other EU(15)Saudi Arabia United Kingdom Other Asia
Japan Germany South AfricaUnited States United Arab Emirates BahrainUganda The Netherlands Other Africa
United Rep. of Tanzania Other EU(15) Other
India France Other
 EAC-Kenya WT/TPR/S/171/KEN 
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 (ii) Investment 
19. During 1999-04, foreign direct investment (FDI) le vels remained low, in line with the trend 
since the late 1990s.  They were lower than those in  Tanzania and Uganda in terms of both stock and 
flow;  e.g. during 1997-02, Kenya's FDI was a bout 26% of Uganda's a nd 19% of Tanzania's.24  
Kenya's FDI per capita represented 3.3% of the average of developing countries during 1996-03.25  
Some of the factors in this poor performance are the internal political situation, cumbersome and 
costly procedures, governance problems, inadequate  infrastructure, insecurity, and policy instability.26 
20. During 1999-02, inward stock of FDI grew steadily, at an annual average rate of 8.1%, and 
outward stock grew at 22.1% (Table I.3).  The inflow was irregular during 1999-03, reflecting foreign 
investors' apprehensions:  it expanded significantly in  2000, contracted markedly in 2001, and then 
increased more than 15-fold during 2002-03.   
Table I.3 
Investment, 1999-03 
(US$ million)  
Type  1999 2000 2001 2002 2003 
Stocks      
  Inward 869 996 1,047 1,097 .. 
  Outward 189 218 268 344 .. 
Flows      
  Inflows 13.82 110.91 5.3 27.62 81.74 
    Equity 13.82 83.31 0.81 13.14 26.99 
    Other capital in Kenya .. 27.59 4.49 14.47 54.75 
  Outflows .. .. .. -7.42 -2.08 
    Equity .. .. .. -7.42 -2.08 
    Other capital abroad .. .. .. .. .. 
.. Not available. 
Sources : Data on stocks, from UNCTAD (2005), WID Country Profile: Kenya;  and data on flows, from the IMF, Balance 
of payments , CD Rom.   
21. Although FDI is small, it plays a key role in Kenya, particularly as a means for technology 
and knowledge transfer, such as in horticulture and floriculture.  Kenya does not keep comprehensive 
FDI data by sector or industry but the Kenya Inv estment Authority (KIA) registers certain planned 
investment projects (some of which have not been implemented).  In recent years, according to KIA data, FDI has flowed to agriculture, garments production, and tourism: agriculture accounted for 
approximately 28% of total FDI during 1997-04.  Nairobi and Mombasa account for 89% of the total number of regional projects registered with the IPC during 2000-04.
27  Most FDI stems from the 
United Kingdom, Germany, and the United Stat es, with the latter being the prime source. 
(4) OUTLOOK  
22. Economic policy will continue to be entrenched within the frame of the PRGF programme.  
The authorities expect real GDP growth to pick up slightly during 2005-07 with rates of 3.7%, 4.1%, and 4.9%.
28  This growth is to be driven by exports , tourism, transport, and telecommunications.  
                                                      
24 UNCTAD (2005), p.5;  and Mullei (2003), p. 42. 
25 UNCTAD (2005), p. 5. 
26 Mullei (2003), pp. 42 and 45. 
27 UNCTAD (2005). 
28 Government of Kenya (2005), p. 13. WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-44 
 
 
                                                      Investment, however, is expected to stagnate at around 24% of GDP.  Exports are forecast to expand 
substantially during the period, at rates of 4.8% , 9.9%, and 12.3%.  Exports of textiles to the 
United States under AGOA are expected to continue to decrease as Chinese tex tiles exports continue 
to expand.  Inflation is expected to remain at  around 3.5% annually, accompanied by a stable real 
exchange rate.  FDI is expected to r each US$170 million in 2005/06 and US$280 million in 
2006/07.29   
23. According to the IMF, Kenya's medium-term economic prospects depend crucially on the 
pace of reform of the civil service and the capacity building of key organizations;  fiscal 
consolidation;  and the resumption of strong donor support.30  The fiscal deficit is expected to amount 
to 3.4% of GDP in 2005/06, pending an estimated increase of about 10% in revenues from taxes compared with 2004/05.
31  In general, the Kenyan Revenue Authority is expected to increase 
revenues from 20.8% of GDP in 2003/04 to 22.4 % in 2006/07 to accommodate various poverty-
reduction programmes already under way.  At the same time, the IMF expects the stock of domestic 
debt to GDP to contract to 21.7% in 2006/07 and 20.3% in 2007/08.32  The greatest risks to the 
economy are adverse weather conditions, a deteriorat ion in the relationship with donors, and volatility 
in commodity prices.   
 
 
 
29 African Development Bank (2005), p. 54.  
30 IMF (2004b), pp. 9 and 13. 
31 Economist Intelligence Unit (2005), p. 4. 
32 IMF (2004b), p. 37. EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-45 
 
 
                                                      II. TRADE AND INVESTMENT REGIMES  
(1) GENERAL FRAMEWORK  
1. Since Kenya's previous Trade Policy Review (TPR), the structure of its legislative and 
executive bodies has remained generally unchanged.33  Executive power is vested in the President and 
the Cabinet. The President is the Head of State, Head of the Cabinet, and Commander-in-Chief of the 
armed forces. The President is el ected by direct popular vote for a five-year term;  the winning 
candidate at a presidential election must receive not less than 25% of the votes in at least five of 
Kenya's eight provinces. Under the Constitution,  the President may be re-elected only once.34  The 
next presidential election is to be held in Decemb er 2007.  The President appoints the Vice-president 
and the Ministers (currently 28) from amongst the members of Parliament.  
2. Legislative power is vested in the Parliament, which consists of the President and the National 
Assembly.35  The central legislative authority is the unicameral National Assembly, formed by 
210 directly elected representatives, 12 nominated members, and two ex-officio members comprising 
the Speaker, elected by the National Assembly, and the Attorney-General, nominated by the 
President.  The maximum term of the National Assembly is five years from its first meeting.  It can be 
dissolved by the President at any time, and the Na tional Assembly may force its own dissolution by a 
vote of no confidence, whereupon presidential and assembly elections must be held within 90 days.   
3. Kenya's legal system is based on its 1963 Constitution and on English Common Law. The 
Constitution was last amended in 1997.  A draft new Constitution was rejected through a referendum 
on 21 November 2005.36  The body of law consists of acts passed by the National Assembly and 
signed into law by the President, as well as a number of laws enacted during the colonial period.  In 
addition, Kenyan law recognizes legal rights and duties inherited from customs and traditions.  
Customary law applies only where it does not conf lict with written law, and is not immoral or 
unjust.37 In Kenya, treaties and international agreements  have to be adopted th rough domestic laws; in 
case of conflict, the national law prevails over the treaty/international agreement. Kenya's trade and 
trade-related legislation is contained in Table II.1.  
4. In general, policies are formulated and implem ented by means of laws. The Cabinet initiates 
and formulates most legislative proposals;  bills are drafted in consultation with the private sector and 
other stakeholders. After being read and passed by  the National Assembly, bills are presented to the 
President, who has 21 days to signify his assent or refusal to the Speaker.  In case of refusal, he must submit a memorandum to the Speaker within 14 days, indicating the specific provision to be 
reconsidered by the National Assembly, including his recommendation for amendments. The National 
Assembly subsequently reconsiders the bill taking in to account the President's comments.  It either 
approves the President's recommendations with or without amendment and resubmits the bill to the 
President for assent, or rejects th e recommendations and approves the bill in its original form by a 
resolution supported by not less than 65% of all me mbers of the National Assembly: in this case, the 
President must assent to the bill within 14 days. 
 
33 See WTO (2000). 
34 Since 1991, a Constitutional amendment has limited the term of office to two five-year terms. 
35 The Constitution of Kenya, Chapter III, Part 2, §30.   
36 The draft new Constitution was rejected by 57% of the votes ( Financial Times , 23 November 2005). 
37 WTO (2000). WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-46 
 
 
 Table II.1 
Main trade-related laws, June 2006  
Area Law 
Customs EAC Protocol, 2005 
 EAC Customs Management Act, 2004 
 Customs and Excise Act (Cap. 472), revised edition 2000 
 Finance Act, 1999 
Import/Export control Import, Exports and Essential Supplies Act (Cap. 502) 
 Trade Disputes Act (Cap. 234), 1991 
Licensing of businesses Trade Licensing Act, 1990 
 Aliens Restriction Act, 1985 
 Companies Act (Cap. 486), 1978 
 Factories Act (Cap. 514), No. 38 of 1950 
 Bankruptcy Act (Cap. 53), 1930 
Taxation Income Tax Act (Cap. 470), 1989 
 Value Added Tax Act (Cap. 476), 1989 
 Stamp Duty Act, 1982 
Exchange Rate Exchange Control Act, 1994 
Sanitary and phytosa nitary measures Pest Control Products Act, 1985 
 Meat Control Act, 1977 
 Fertilizers and Animal Foodstuffs Act, 1977 
 Animal Disease Act (Cap 364), 1972;  revised, 1989 
 Plant Protection Act (Cap 324), 1937;  revised, 1979 
 Public Health Act (Cap. 242) 
 Food, Drugs, and Chemical Substances Act (Cap. 254) 
Standards Standards Act (Cap. 363), 1981 
Foreign investment Constitution of Kenya (Section 75), 1963 
 Investment Promotion Act, 2004 
 Housing Act, 1990 
 Land Acquisition Act, 1983 
 Companies Ordinance Act (Cap. 486), 1959 
 Investment Disputes Convention, 1967 
 Partnership Act (Cap. 20 and 30)  
 Arbitration Act, No. 4 of 1995 
Privatization Privatization Act, 2005 
Export processing zones Export Processing Zone's Act (Cap. 517), 1991 
Government procurement Local Government Act, 1998  
 Sale of Goods Act, 1981 
 Government Contracts Act, 1979 
 Architects and Quantity Surveyors Act, 1978 
 Public Procurement and Disposal of Public Assets Bill, 2005 
Intellectual property rights Industrial Property Act, 2001 
 Seeds and Plant Varieties Act (Cap. 326), 1991 
 Trade Marks Act, 2002 
 Statute Law (Repeal and Miscellaneous Amendment Act), 1980 
 Science and Technology Act (Cap. 250), 1977 
 Patents and Designs (Conventi on Countries) Order, 1971 
 Trade Description Act (Cap. 505), 1962 
 Copyright Act, 2001 
Competition Restrictive Trade Practices, Monopolies and Price Control Act (Cap. 504), 1990 
 Arbitration Act, 1985 
Agriculture and related activities Tea Act (Cap. 343), 1950 
 Sugar Act, 2001 
 Fisheries Act, 1972 
 Coffee Act, 2001 
 Forests Act, 1992 
Financial services Banking Act (Cap. 488), 2002 
 Finance Act, 1999 
 Insurance Act, 1984 
 Central Bank of Kenya Act (Cap 491), 1966 
Table II.1 (cont'd) EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-47 
 
 
 Area Law 
 Unit Trust Act (Cap 521) 
 Retirement and Benefit Authority Act, No. 3 of 1997 
Electricity Electric Power Act, 1997 
Water Water Act, 2002 
Transport Merchant Shipping Act (Cap. 389), 1989 
 Kenya Roads Board Act, 2000 
 Kenya Airport Authority Act (Cap 395), 1992 
 Civil Aviation (Amendment) Act, 2002 
 Kenya Ports Authority Act (Cap 391) 
Telecommunications and postal services Kenya Communications Act, 1998 
Tourism Hotels and Restaurant Act, 1986 
 Tourist Industry Licensing Act, 1990 
 Wildlife Conservation and Management Act, 1989 
Source: WTO Secretariat, based on informati on provided by the Kenyan authorities. 
5. The judiciary is composed of two levels of ma gistrates' courts, i.e. the High Court and the 
Court of Appeals.38  Judges and the Attorney General are appointed by the President.39  An industrial 
court was established in 1964 under the Trade Dis pute Act;  its main purpose is to settle trade 
disputes, excluding those involving the public sector.  Moreover, only unions, employers, and their 
organization have standing before the industrial court; as management staff are excluded from membership in trade unions, the industrial court does not deal with "white-collar" workers' concerns.
40 
6. Since 1 January 2005, some of Kenya's trade polic y instruments, customs tariffs in particular, 
have been set at the East African Community (EAC) level (Common Report, Chapter III(3)(i)).  
Otherwise, Kenya's overall institutional framework has remained broadly unchanged since its last 
TPR.  The Ministry of Trade and Industry (MT I) remains the main body in the formulation, 
implementation, and coordination of Kenya's trade polic ies.  Depending on the nature of the issue, the 
MTI consults with other relevant ministries and ins titutions involved directly or indirectly in trade 
policy formulation and/or implementation. These in clude the Ministries of Finance; Agriculture; 
Livestock and Fisheries Development; Tourism and Wildlife; Planning and National Development; 
Transport; Energy; Environment and Natural Re sources; and of East African and Regional 
Cooperation;  as well as the Central Ba nk, and the Kenya Revenue Authority.    
7. The private sector and NGOs provide input into trade policy formulation, primarily through 
the Kenya Private Sector Alliance (KEPSA), the Kenya National Chamber of Commerce and 
Industry, the Kenya Association of Manufacturers,  and trade associations. KEPSA, established in 
2003, seeks to bring together the private sector in  order to influence public policy formulation.41  The 
views of the private sector are customarily taken into consideration, throughout the process, on an ad 
hoc basis.  There are no independent bodies with a formal mandate to carry out public review or 
assessments of the Government's trade policy.  The Kenya Institute for Public Policy Research and 
Analysis, a semi-autonomous public  institute, and the Institute of Policy Analysis and Research, a 
private institution, carry out assessme nts of public policies upon request. 
                                                      
38 Commercial claims for more than K Sh 3 million are determined in the High Court.  In Nairobi, there 
is a special division of the High Court (the Commercial Court) dealing with specific commercial cases.  
39 The President can also dismiss the Attorney General and judges in general, upon the 
recommendation of a specially appointed tribunal ("Kenya Assessment:  Country Information and Policy Unit".  
Available at: http://www.asylumlaw.org/docs/ken ya/ind01b_kenya_ca.pdf [7 February 2006]). 
40 ILO (2004). 
41 Kepsa online information.  Available at: http://w ww.kepsa.or.ke/index.html [8 February 2006]. WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-48 
 
 
                                                      (2) POLICY OBJECTIVES  
8. The Economic Recovery Strategy for Wealth a nd Employment Creation, the centrepiece of 
Government policy for 2003-0742, is aimed at reducing poverty, pa rticularly in rural areas (three 
quarters of the poor live in rural areas).  The Strategy  is based on four pillars :  recognition that rapid 
economic growth will be required fo r macroeconomic stability over the next few years; the need to 
reform and strengthen public ad ministration so as to have good governance and accountability; 
rehabilitation and expansion of infrastructure, especi ally roads, railways, and telecommunications; 
and investment in the human capital of the poor.43  
9. The strategy also identifies specific policies aimed at:  (i) replacing the large number of 
agriculture laws with a single law, rationalizing agricultural institutions to increase efficiency, 
strengthening extension services, and increasing small-holder access to credit;  (ii) adopting an 
Industrial Master Plan that will lay the basis for the first phase of Kenya's industrialization strategy;  (iii) promoting tourism through, inter alia , increased funding for marketing, and upgrading the tourist 
police;  (iv) putting in place an Investment Code to  consolidate investment incentives, and creating a 
one-stop office for investment promotion activities;  (v) establishing an export development strategy;  
(vi) promoting micro-and-small enterprises (MSEs), focusing on employment creation and formalizing informal activities;  (vii) launching a financial sector assessment plan to promote 
synergies in the subsector;  and (viii) removing th e various impediments that hamper private sector 
development.
44 
10. Some of the key macroeconomic objectives of the strategy are:  to create 500,000 jobs 
annually;  reduce the poverty level by at least 5 pe rcentage points from the current 56.8% level;  real 
GDP growth of 7% in 2006;  annual average in flation below 5%;  to increase official foreign 
exchange reserves to US$1.7 billion in 2007 (3.5 months of import c over);  to contain the current 
account deficit to an average of 6.2% of GDP;  and to raise investment from 13.6% of GDP in 2002 to 
24.3% in 2007.45 
(3) TRADE AGREEMENTS  
11. Kenya participates actively in the multilateral trading system (Common Report, 
Chapter II(1)). The National Committee on WTO (N CWTO) meets periodically to review issues 
pertaining to the multilateral trading system. Kenya 's most recent WTO notifications are listed in 
Table II.2. Kenya's trade-related technical assistance needs are broadly similar to those of the other EAC members (Common Report, Chapter II(1)). 
12. Kenya is a member of the EAC, the Regional Integration Facilitation Forum (RIFF), the Inter 
Governmental Authority on Development (IGAD), the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC), and is granted non-reciprocal trade preferences under the Cotonou Agreement with the EC, the U.S. AGOA, and the GSP schemes of some developed partners, notably 
 
42 The Strategy takes into account existing government policy documents, particularly the Poverty 
Reduction Strategy Paper (PRSP) issued in 2001. 
43 Seven areas have been identified: achieving 100% net enrolment at primary level; enhancing 
secondary education by expanding bursaries to cater fo r at least 10% of enrolled students; establishing a 
comprehensive national social health insurance fund for all Kenyans; continuing the fight against the HIV/AIDS 
pandemic; enhancing employment creation, while minimizing employment disputes; converting the National 
Social Security Fund into a pension fund; and providing low-cost housing (Ministry of Planning and National Development, 2002). 
44 Ministry of Planning and National Development (2002). 
45 Ministry of Planning and National Development (2002). EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-49 
 
 
 Canada, EC, Japan, Norway, Switzerland, and th e United States (Common Report, Chapter II(4)). 
Kenya is also a member of the Common Market for Eastern and Southern Africa (COMESA) 
(Common Report, Chapter II(2)). 
Table II.2 
Selected notifications to the WTO, June 2006 
WTO Agreement Description of requirement  Periodicity Most recent notification 
Agreement on implementation of GATT Article VII (Customs valuation)  
Articles 1, 4-13, and 16 Information on implementation and administration of 
the Agreement  G/VAL/N/2/KEN/1 
21 January 2002 
Article 22.2 Laws and regulations Once, then changes G/VAL/N/1/KEN/1 
21 January 2002 
   G/VAL/N/3/KEN/1 
21 January 2002 
Agreement on implementation of GATT Article VI 
Article 16.4 Semi-annual report  G/ADP/N/139/Add.1 
21 April 2006 
Agreement on implementation of GATT Article XVII 
 State trading enterprises  G/STR/N/11/KEN 
27 March 2006 
Agreement on Import Licensing Procedures 
Articles 1.4(a), 7.3, and 
8.2(b) Laws and regulations Once, then changes G/LIC/N/1/KEN/1 
G/LIC/N/3/KEN/2/Add.1 12 June 2003 
Article 7.3 Questionnaire on import licensi ng procedures Annual G/LIC/N/3/KEN/2/ 
3 April 2003 
Agreement on Technical Barriers to Trade  
Article 2.9 Laws and regula tions Ad hoc G/TBT/N/KEN/24 
17 January 2006 G/TBT/N/KEN/19 1 November 2005 
G/TBT/N/KEN/25 
2 March 2006 G/TBT/N/KEN/26 
2 March 2006 
Article 2.10 Laws and regula tions Ad hoc G/TBT/N/KEN/12 
17 May 2005 
Article 5.6 Laws and regulations  Ad hoc G/TBT/N/KEN/14/Add.1 
22 September 2005 
G/TBT/N/KEN/14 7 July 2005 
Article 10.7 Laws and regula tions Ad hoc G/TBT/10.7/N/28 
10 November 1999 
Article 15.2 Conformity assessment pro cedures Ad hoc G/TBT/2/Add.86/Suppl.1 
2 June 2005 
Article 15.2 Implementation and administration  Once, then changes G/TBT/2/Add.86 
28 April 2005 
Enabling Clause Differential and more favourable treatment, 
reciprocity and fuller par ticipation of developing 
countries  WT/COMTD/N/14 
11 October 2000 
GATS     
Fifth Protocol    WT/Let/363 
13 December 2000 
Article III:4 or IV:2 Enquiry and contact  point Once, then changes S/ENQ/78/Rev.7 
20 January 2005 
Agreement on Sanitary and Phytosanitary Measures  
Article 7, Annex B Emergency measures Ad hoc G/SPS/N/KEN/2-28 
26 April 2001 -  1 May 2006 
 Harmonized EAC standards Ad hoc G/SPS/N/KEN/1/Cor.1 
20 April 1999 
Table II.2 (cont'd) WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-50 
 
 
 WTO Agreement Description of requirement  Periodicity Most recent notification 
Agreement on Subsidies a nd Countervailing Measures 
Article 27.4 Extension of the transition period   G/SCM/N/74/KEN 
21 December 2001  
Article 25.11 Semi-annual report  G/SCM/N/138/Add.1 
20 April 2006 
Agreement on Trade-Related Aspect s of Intellectual Property Rights 
Article 63.2 Laws and regulations  Once, then changes IP/N/1/KEN/2 
4 November 2002 
IP/N/1/KEN/T/1 
24 July 2001 
IP/N/1/KEN/C/1 23 July 2001 
IP/N/1/KEN/I/1 
23 July 2001 IP/N/1/KEN/P/1 
23 July 2001 
Article 69 Contact point  IP/N/3/Rev.9/Add.2 
19 May 2006 
Source:  WTO Secretariat. 
13. Kenya has signed various bilateral trade agreements, but these are not operational since they 
have never been ratified or entered into force.46  
(4) INVESTMENT FRAMEWORK  
14. The institutional and legislative framework  governing investment in Kenya changed 
significantly with the adoption of the Invest ment Promotion Act (IPA) on 3 January 2005.47  I t  
complements the Foreign Investment Protection Act of 1981 and the Trade Licensing Act of 1967 (as 
amended).48  The IPA aims to "promote and facilitate investment by assisting investors (local and 
foreign) in obtaining the licences necessary to  invest and by providing other assistance and 
incentives".49   
15. Under the IPA, the Kenya Investment Author ity (KIA) was established in October 2005 and 
replaced the Investment Promotion Centre (IPC) as the agency in charge of investment in the country.  
The IPA mandates the KIA to promote and facilitate investment by, inter alia :  issuing investment 
certificates50;  assisting investors in obtaining licences, permits, incentives, and exemptions; providing 
information on investment opportunities and s ources of capital; and advising the authorities on 
improving the investment environment.51 
                                                      
46 These are with:  Argentina, Bangladesh, Bulgar ia, China, Djibouti, Egypt, Ethiopia, Germany, 
Hungary, India, Iran, Lesotho, Nigeria, Pakistan, Poland, Romania, Rwanda, the Republic of Korea, Somalia, 
Sudan, Swaziland, Tanzania, Thailand, United States, Ven ezuela, Zambia, and Zimbabwe.  In addition, Kenya's 
agreements with the former Czechos lovakia, the former Yugoslavia, an d the former USSR have expired 
(WTO, 2000). 
47 The IPA was passed by Parliament and assented  to by the President in  December 2004.  On 
3 January 2005, it was published in the Kenya Gazette , Supplement No. 87. 
48 The authorities indicate that a Working Committee on Regulatory Reform for Business Activity in 
Kenya has been established to identify conflicting legislation related to investment. 
49 UNCTAD and ICC (2005). 
50 The KIA investment certificates replaced the Ce rtificate of General Authority issued by IPC. 
51 A Board of Directors drawn from the public and private sectors oversees the operations of KIA. EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-51 
 
 
                                                      16. According to the authorities, to invest in Kenya, foreigners may request an optional 
investment certificate from KIA52, while national investors must register with KIA.  An investment 
certificate facilitates the issuance of various licen ces and entry permits.  To be eligible for a 
certificate, foreigners are required to invest a mini mum of US$100,000 or the equivalent.  In addition, 
the investment must be deemed by KIA beneficial in terms of creation of employment for Kenyans, 
acquisition of new skills and technology; and contri bution to tax or other gove rnment revenues.  KIA 
is expected to make and communicate its decision regarding an investment certificate, in writing, 
within 25 working days of receipt of a completed a pplication.  For special reasons, related to security 
or the environment, a referral to a third party is possible.  If KIA fails to act within 25 days, the 
investor may complain to the MTI, who is required to investigate the matter and communicate a 
decision within 15 working days.  Investment certificates are provided free of charge. 
17. A company can be 100% foreign owned in almost all sectors of the Kenyan economy.53  The 
exceptions are:  insurance, where foreign participa tion is restricted to 66.7% (Chapter IV(5)(i)(b));  
telecommunications, 70% (Chapter IV(5)(ii));  comp anies listed in the Nairobi Stock Exchange, 75%; 
and fishing activities, 49% (Chapter IV(2)(iii)(c)). 
18. A company incorporated outside Kenya may carry  out business in Kenya through a branch. In 
order to establish a branch, the following documents a nd details must be submitted to the Registrar of 
Companies:  a certified copy of the company's Memorandum and Articles of Association or equivalent constitution documents;  a list containing the names, addresses, nationalities and occupations of its directors and company secretary;  a statement of existing mortgages and charges 
created by the company in Kenya and, if any, the names and addresses of one or more Kenyan 
resident(s) authorized to accept legal notices on the company's behalf;  and the address of the company's registered or principal office.   
19. The Investment Climate Action Plan (ICAP), deve loped with the participation of the private 
sector, was completed in March 2005.  The ICAP focuses on fast-track reforms intended to improve the investment climate for the private sector, by addressing, inter alia , the escalating insecurity; 
inefficient business licensing regime; protracted approval procedures for construction and development;  time-consuming customs, tax admi nistration, and business registration procedures;  
poor land administration measures;  and costly electricity hook-ups.
54  
20. Kenya has signed bilateral treaties for the promotion and protection of FDI with the 
Netherlands (1970), and Germany (1996).  It has concluded bilateral double taxation treaties with: 
Austria (1972), Bangladesh (1987), Belgium (1984), Canada (1978), China (1991), Denmark (1963), 
France (1996), Germany (1996), Greece (1980), India (1989), Indonesia (1991), Ireland (1973), Japan 
(1959), and the Netherlands (1982).  Kenya is a signatory to the Convention Establishing the 
Multilateral Investment Guarantee Agency (MIGA) and a member of the African Trade Insurance Agency (ATIA).  Kenya has been a member of the International Centre for the Settlement of 
Investment Disputes since 2 February 1967.  
 
52 With the certificate, the foreign investor is eligib le for six work permits, and a series of business 
licences. 
53 FDI is particularly welcomed in the following ar eas: agriculture and agro-processing; export-oriented 
industries, including AGOA-oriented ones; physical infrastructure, energy, and information communication and 
technology; plastics and pharmaceutical s; textiles and apparel; and tourism and related industries (Ministry of 
Trade and Industry, undated). 
54 Ministry of Trade and Industry (undated). WT/TPR/S/171/KEN  Trade Policy Review 
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 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. Since January 2005, the EAC common external  tariff (CET) has been Kenya's main trade 
policy instrument.  The move from Kenya's national tariff to the EAC CET resulted in an overall 
decrease in average import tariffs.  Imports are also subject to an import processing fee of 2.75%, 
although Kenya has bound other duties and charges at zero.  Moreover, a 4% withholding tax is collected on imports as an advance on income/corporate tax. 
2. All goods, imported and domestic, are subject to a value-added tax at a st andard rate of 16%.  
Foodstuffs, alcoholic beverages, ciga rettes, petrol, and cosmetics are subject to excise duties.  Kenya 
has never applied anti-dumping, countervailing or safeguard measures under the WTO.  The authorities indicate that the setting of standa rds in Kenya follows international norms. 
3. Export taxes are levied on hides and skins, and scrap metal.  A licence is required for the 
export of most agricultural products , food, minerals and mineral pr oducts.  Kenya does not grant any 
export subsidies.  However, with a view to pr omoting exports, Kenya has an Export Processing Zones 
Scheme, a Manufacturing Under Bond Scheme, and a Duty Remission Scheme.  Since Kenya's last 
TPR, the contribution of export processing zones to  exports, GDP, and employment has increased 
significantly. 
4. A new law on public procurement, aimed at increasing transparency and accountability, 
entered into force in 2005, but has not been impl emented (as of May 2006) as the related regulations 
have not yet been adopted.  Since 2003, the Government has revitalized its privatization programme;  
a new Privatization Act was adopted in 2005.  Kenya's competition legislation prohibits restrictive 
trade practices.  Since its last TPR in 2000, Kenya has adopted new legislation on intellectual property 
rights;  it has also strengthened enforcement measures. 
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Business registration, customs procedures, and valuation  
5. All importers in Kenya must be licensed by th e Ministry of Trade and Industry (MTI).  The 
licence is valid for one year, and provided free of charge.  Importers also need to obtain a personal 
identification number from the Domestic Taxes Depart ment of the Kenya Revenue Authority (KRA).  
Trading activities are generally open to Kenyans and foreigners.  According to the authorities, product 
or location-specific trading licences have been abolis hed, in practice.  A requirement for preshipment 
inspection of all imports with an f.o.b. value of  more than US$5,000 was lifted on 30 June 2005.  
6. The KRA's Customs Services Department is responsible for cu stoms clearance and collecting 
customs and excise duties and VAT on imports.  The Taxpayer Charter adopted by the KRA stipulates that the clearing time for imports should not exceed tw o working days, provided there is no rejection.  
In practice, average clearing time is about 48 hours, with the authorities aiming to reduce it to six hours.  The Department is currently undertaki ng a reform and modernization programme, including 
the introduction of customs procedures based on risk analysis.  The Trade-X system, an internet-based transaction processing system, was set up in July 2005.  The Department is also introducing a 
community-based system for electronic exchange of documents and information among relevant 
authorities, an internet referen ce system for accessing statutory information and simulating transaction EAC-Kenya WT/TPR/S/171/KEN 
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                                                      costs, and an electronic payments system.55  The authorities indicate that there are plans for electronic 
access to the customs systems of Tanzania and Uganda. 
7. A Declaration Form – Form C-63, and a Declaration of Customs Value – Form C-52, are 
required for all commercial consignm ents to Kenya.  Both forms, which can be downloaded from the 
KRA's website, must be submitted to the Customs Services Department and accompanied by the:  
invoice;  packing list;  bill of lading/air bill;  certificate of compliance, where applicable, from relevant competent authorities (e.g certificate of analysis from the Kenya Bureau of Standards or SPS certificate from the Kenya Plant Health Inspectorate Se rvice);  and certificate of origin for preferential 
treatment purposes.
56  Insurance for imports is compulsory and must be taken with companies 
licensed in Kenya.   
8. Kenya has notified its legislation on customs valuation to the WTO.57  According to the 
authorities, since January 2000, customs valuation in Kenya has been based on the Agreement on the 
Implementation of Article VII of GATT 1994;  the transaction value is used for some 60% of transactions.   
9. Disputes are normally handled at the regional level.  If no agreement can be reached, a 
Valuation National Committee handles valuation issu es, while the Trade Facilitation Office deals with 
conflicts related to classification. 
(ii) Tariffs 
(a) MFN applied tariff structure 
10. The adoption of the EAC common external tariff (CET) in January 2005 led to a marked 
reduction in Kenya's applied tariffs:  the simple average fell from 16.8% in 2004 to 12.9% under the 
CET (Common Report, Chapter III(3)(i)).  In additi on, transport and insurance from entry points in 
Tanzania and Uganda to the Kenyan border are no long er dutiable;  the dutiable value is now the c.i.f. 
price of the imported good at the point of entry to the customs union.  However, imports transhipped through Tanzania and Uganda are of minor importance for Kenya.   
(b) MFN tariff bindings 
11. Kenya's tariff bindings cover 14.9% of its tari ff lines.  Tariffs are boun d at a ceiling rate of 
100% for all agricultural products.  For non-agricu ltural products, Kenya has bound six tariff lines (at 
the HS four-digit level), equivalent to 1.6% of n on-agricultural tariff lines, at:  62% on fresh, chilled, 
or frozen fish (HS 03.02 and 03.03), excluding fish  fillets and other minced fish meat;  35% on 
medicaments (HS 30.03);  18% on pharmaceutical g oods (HS 30.06);  62% on mineral or chemical 
fertilizers (HS 31.05) containing two or three of the fertilizing elements, potassium, phosphorus, and 
nitrogen;  and 31% on polymers of ethylene in  primary form (HS 39.01).  The tariff on "other 
tractors" (HS 87.01.90) was also bound at 62%.   
12. Kenya has bound other duties and charges at zero. 
 
55 Ministry of Trade and Industry (2005). 
56 Ministry of Trade and Industry (2005).  
57 WTO document G/VAL/N/1/KEN/1, 21 January 2002. WT/TPR/S/171/KEN  Trade Policy Review 
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 (c) Tariff preferences  
13. Kenya grants tariff preferences (on a reciprocal  basis) to Tanzania and Uganda under the 
Protocol on the Establishment of the EAC Cust oms Union (Common Report, Chapter III(3)(ii)), and 
to members of the COMESA (Common Report, Chap ter II(2)).  The preferential bands applied by 
Kenya under COMESA are 0%, 4%, and 6% on inputs, intermediate goods, and final goods, 
respectively.  
(d) Duty and tax exemptions and concessions 
14. Kenya currently grants tariff exemptions on g oods for use by the President and by charitable 
bodies, churches, and approved educa tional institutions;  by the military and police;  in official aid-
funded projects;  in emergency situations;  and by diplomatic and intern ational organizations.  
Samples and exhibits/displays for trade fairs may be  imported to Kenya duty free.  However, after 
use, the items should be re-exported or destroyed;  if the relevant customs certification that the goods 
have been re-exported or destroyed is not produced, the relevant duties are imposed on the presumed 
value of the items.  The authorities indicate that th e introduction of the CET, with its increased share 
of zero tariffs, has made redundant a nu mber of previous tariff concessions. 
15. The Minister of Finance may waive import duties and value-added tax by order in the Gazette 
if the Minister is convinced that it is in the public interest.  Imports on which payable duties are remitted include:  sowing seeds;  motor vehicles and sp ecified spare parts for use in the Safari Rally;  
stainless steel tubes, bars and fittings;  raw mate rials for use in the manuf acture of insecticides, 
fungicides and similar products, including component parts used in the manufacture of agricultural 
and horticultural equipment;  goods imported or purchased by a compan y that has been granted an oil-
exploration or oil-prospecting licence in accordance with a production-sharing contract with the Government and under the Petroleum (Exploration and Production) Act;  crude pyrethrum extract 
imported by the Pyrethrum Marketing Board;  pulp imported by Kenya Paper Mill Limited;  dairy salt 
and tetra pak containers imported by Kenya Co-operative Creameries Limited for the manufacture of 
butter and milk;  and specified raw materials for the sole use of certain industries manufacturing 
medicaments. 
16. Remissions, rebates, and refunds of import duti es are also available, under export incentive 
schemes, on raw materials, capital equipment, m achinery, and other components used in the 
manufacture and packing of goods destined for export (section (3)(v) below). 
17. Goods in transit are exempt from customs duti es.  Bonds must be held until the goods leave 
the country.  The maximum time allowed for goods shipped through Kenya on their way to, inter alia,  
eastern Congo and Rwanda is 15 days, extendable by 15 days.  
(iii) Other duties and charges 
18. An import processing fee of 2.75% is payable on the c.i.f. value of all imports (K Sh 5,000 
minimum), although Kenya has bound other duties and charges at zero.  A fee of 1% is collected on the c.i.f. value of agricultural imports for servi ces rendered by the Kenya Plant Health Inspectorate 
Service (KEPHIS) (section (vii)(b) below).  A 4%  withholding tax is collected on imports as an 
advance on income/corporate tax. 
19. VAT is levied at a standard rate of 16% on the sale price of locally produced goods and 
services, or on the customs value (plus border charg es) of imports.  The rate was reduced from 18% in 
FY 2003/04.  A reduced rate of 14% is applied on certa in services, in particular hotels and restaurants.  EAC-Kenya WT/TPR/S/171/KEN 
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                                                      Businesses must register under the Value Added Tax Act if their turnover from taxable goods and 
services exceeds K Sh 10 million per year, or if they deal in a list of prescribed goods and services.   
20. Unprocessed agricultural products (including fi shery, forestry, and livestock), processed 
foodstuffs, and aircrafts are exempt from VAT. The following items are zero-rated:  pharmaceuticals, 
medical equipment, fertilizers, agricultural machin ery and equipment, educa tional textbooks, fuel and 
gas, all goods and taxable services destined for the export processing zones, and goods and services 
supplied to foreign-aid funded projects.  The Ei ghth Schedule to the Customs and Excise Act also 
provides for zero-rated VAT on imports and purchases by  designated persons or organizations (e.g. 
the President, armed forces, commonwealth and other Governments, diplomatic and aid agencies).     
21. A Presumptive Income Tax (PIT) of 2% applies on the gross sales price of various 
agricultural products, including coffee, cashews, mai ze, wheat, barley, rice, sugar cane, pyrethrum 
flowers, tobacco leaves, tea leaves, pigs, cotton, hides, and skins.  
22. Excise duties apply both to imports and lo cally produced goods, including foodstuffs, 
alcoholic beverages, tobacco produc ts, fuels, and cosmetics (Table AIII.1).  These duties are charged 
on the ex-factory price of domestic goods and the import value (inclusive of customs duties) of 
imported items.  Excise duties on imports are collected at the time of import along with import duties 
and VAT.  Kenya imposes excise duties on 459 prod ucts, with peak rates of 50% and 70%.   
(iv) Import prohibitions, restrictions, and licensing  
23. Kenya maintains import prohibitions , restrictions, and controls fo r moral, health, security, and 
environmental reasons as well as under internati onal conventions.  Kenya's import prohibition and 
licensing regime is governed by the Eighth Schedul e to the Customs and Excise Act (Cap. 472) under 
which goods are categorized into three groups:  pr ohibited goods;  restricted goods, which require 
approval from relevant authorities;  and goods that  must meet technical, phytosanitary, health and 
environmental standards (Table AIII.2).  The Minist er of Trade and Industry may, by order in the 
Gazette, amend the list of goods subject to import prohi bition or licensing.  Goods that do not fall into 
one of these categories can be imported freely.   
24. Kenya has notified its import licensing procedures to the WTO and replied to the 
questionnaire on import licensing.58 
(v) Contingency trade remedies 
25. Kenya has never applied anti-dumping, counterva iling or safeguard measures under the WTO.   
26. Kenya's national legal basis for the imposition of anti-dumping and countervailing measures 
is in Sections 125 and 126 of the Customs and Excise Act.  Under Section 125, a duty may be imposed on dumped or subsidized goods if their importation causes or threatens to cause material 
injury to an established industry or is such as to retard materially the establishment of an industry in Kenya.   
27. Section 126 of the Act defines dumped goods as those with an export price lower than their 
fair market price in their county of origin or in the country from which they were exported to Kenya;  or sold in Kenya at a price below the "cost of impor ting", i.e. the cost of th e goods in the country from 
 
58 WTO documents G/LIC/N/3/KEN/2 , 3 April 2003 and /Add.1, 12 June 2003,  and 
G/LIC/N/1/KEN/1 .WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      which they were exported inclusive of insurance, freight, duties, taxes and any other charges.  
Subsidies are defined as any support (e.g. grant, loan, tax relief) given, directly or indirectly, on production or export:  for example, a special subsid y on the transport of a particular product, or 
favourable treatment to producers or exporters in  the course of administering any governmental 
control over the exchange of curre ncies where that treatment has the effect of reducing the price of 
goods offered for export. 
28. Industries that consider themselves to be affected by dumped or subsidized imports must 
contact the Ministry of Finance and supply evidence  of the nature and source of the dumped or 
subsidized imports as well  as substantiation that their industry is being damaged by the dumped or 
subsidized imports.  On the basis of this information, the Treasury wi ll take action where it is convinced 
that dumping or subsidization has actually taken pl ace and that the industry in question has actually 
suffered injury, by imposing anti-dumping or counter vailing duties on the imports in question.  The anti-
dumping or countervailing duties are decided upon by the Treasury.  Once the Minister of Finance approves the imposition of anti-dumping or count ervailing duties, a notice is issued in the Gazette  by the 
Attorney General's Chambers.
59   
29. Kenya has no specific legislation on safeguard m easures;  safeguard measures can be applied 
on an ad hoc and case-by-case basis.60   
(vi) Standards and technical requirements 
(a) Standardization, testing, and certification 
30. The Kenya Bureau of Standards (KEBS), estab lished by the Standards Act (Cap 496), is a 
statutory body under the MTI.  Its mandate includes the preparation of standards relating to products, measurements, materials, and processes;  the certifi cation of industrial products;  assistance in quality 
controls;  and dissemination of information relating to standards.  The KEBS is also Kenya's notification authority and national e nquiry point under the TBT Agreement.
61  The National Standards 
Council (NSC) supervises and controls the admini stration and financial management of the KEBS, 
advises the Minister of Trade and Industry, and formulates policies related to standardization.  The 
Standards Information Resource Centre (SIRC) is in  charge of providing information on standards and 
related documentation.  Its library has a collectio n of over 1,800 Kenya standards and more than 
250,000 foreign standards.62   
31. According to the authorities, the setting of Kenya standards follows international norms 
(ISO/IEC).  Kenya standards are formulated, th rough consensus with the public, by technical 
committees comprising experts representing variou s interests, including producers, consumers, 
technologists, research organizati ons, and testing organizations.63  Notices concerning the 
development or adoption of standards and technical  regulations by the 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.64  Compulsory standards apply equally to imports and locally produced goods.  
 
59 WTO document G/ADP/N/1/KEN/1 - G/SCM/N/1/KEN/1, 22 May 1996. 
60 WTO document G/SG/N/1/KEN/1, 10 May 1996. 
61 WTO document G/TBT/2/Add.86, 28 April 2005.   
62 KEBS online information.  Available at:  http://www.kebs.org [1 February 2006]. 
63 There are six categories of standards:  glossaries or definitions of terminology, dimensional 
standards, performance standards, standard methods of test, codes of practice, and measurement standards. 
64 WTO document G/TBT/2/Add.86, 28 April 2005.EAC-Kenya WT/TPR/S/171/KEN 
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                                                      Exemption from compliance with a compulsory standard  may be granted by the Minister of Trade and 
Industry on a case-by-case basis.65 According to the authorities, however, this has happened rarely. 
32. Kenya has some 4,000 standards (April 2006).66  According to the authorities, about 50% are 
equivalent to ISO standards.  While all Kenya standards used to be mandatory, the authorities indicate 
that they are in the process of separation, making formerly mandatory standards voluntary.   
33. Kenya has concluded mutual recognition agreements (MRAs) with Egypt, Sudan, Tanzania, 
and Uganda.  In principle, products covered by techni cal regulations (Table AIII.3) must be inspected 
in their country of origin prior to their import by e ither SGS or Intertek;  the inspection fees are to be 
paid by the importer.  Failure to have goods inspected  before import leads to a penalty of 15% of their 
customs value;  and imports of goods from non-MR A partners that have not been inspected are 
subject to inspection by the KEBS.  Locally produced goods are monitored regularly through visits to 
factories according to annual, quarterly, and mont hly plans based on product risk and the previous 
records of inspections and tests.67  The inspection fee is 0.2% of the sale price.  Infringements of the 
Act may lead to confiscation and prohibition of th e manufacture or sale of the goods.  Infringers are 
liable to a fine not exceeding K Sh 20,000, or imprisonment for a term not exceeding twelve months, 
or both.  
34. The Kenya Accreditation Service (KENAS) was established under the Standards Act 
(Cap 496) in March 2005, to take over the functi ons of the Quality Systems Assessment Committee 
for registering assessors and the National Calibrati on Scheme for accrediting calibration laboratories.  
KENAS has identified around 100 laboratories to carry out tests in various fields in Kenya.   Certification in Kenya covers, inter alia , quality, environmental aspects, and food safety, as well as 
occupational health and safety management systems.  There are four registered certification bodies:  
KEBS-Certification Department, SGS, Bureau Veritas (BVQI), and CVA international.   
35. The Quality Assurance Department of KEBS administers a voluntary product certification 
scheme and grants permits to companies to use the Diamond Mark of Quality on products.  The 
authorities indicate that the regulatory infrastructure for technical regulations needs to be harmonized 
for them to be more effective and efficient,  in line with the requirements of the WTO TBT 
Agreement.68   
36. Kenya is a member of the International Organization for Standardization (ISO), the 
International Electrotechnical Commission (IEC), and the African Regional Organization for 
Standardization (ARSO).  
37. According to the authorities, Kenya's quality management system complies with ISO/IEC 
regulations.  KENAS also provides accreditation services to testing and calibration laboratories according to the ISO/IEC 17025, to inspecti on bodies according to ISO/IEC 17020, and to 
certification bodies according to ISO/IEC 17021.  It is working on fulfilling the requirements of the ISO/IEC 17011 to become a full member of the International Laboratory Accreditation 
Cooperation/International Accreditation Forum and to sign multilateral arrangements with 
international accreditation bodies.
69   
 
65 Section 9 (iii) of the Standard s Act Cap 496, as revised.   
66 Kenya Bureau of Standards (2005 and 2006). 
67 WTO document G/TBT/2/Add.86/Suppl.1, 2 June 2005. 
68 WTO document G/TBT/2/Add.86/Suppl.1, 2 June 2005. 
69 WTO document G/TBT/2/Add.86/Suppl.1, 2 June 2005. WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      (b) Health, sanitary, phytosanitary, an d environmental protection measures 
38. Kenya's national enquiry points under the WTO SPS Agreement are the Director of 
Agriculture for plant health issues,  the Director of Veterinary Services for animal health, and the 
Director of Medical Services for human health.  The Director of External Trade in the MTI has been 
designated as the SPS national notification authority.70  
39. The Kenya Plant Health Inspectorate Service (KEPHIS) coordinates all matters relating to 
plant health and quality control of agricultural inputs and produce under the Plant Protection Act 
(Cap 324), the Suppression of Noxious Weeds Act (Cap 325), and the Agricultural Produce (Export) 
Act (Cap 319).  KEPHIS issues a phytosanitary certificate after verifying that a shipment meets the 
entry requirements.  Imports of plants, seeds, a nd fruit other than canned or bottled fruit must be 
inspected.  Imported plants may, if necessary, be detained in quarantine or in special nurseries.  
Importation of seed maize in Kenya is controlled by KEPHIS.  All imported seed should be accompanied by an Orange ISTA (International Seed Testing Association) certificate, showing that it 
has been produced under interna tionally accepted standards for seeds.  In addition, seeds must meet 
phytosanitary standards relating to control of quarantine diseases.
71  Until a seed variety is fully 
registered, its import is subject to quantitative ceilings ;  the registration process can take up to three or 
four years.72  Plant materials arriving in Kenya withou t authority and accompanying documents may 
be destroyed or reshipped at the owners' cost.  According to the authorities, the required import 
conditions vary by plant and origin.73   
40. Import permits are required for plants and pl ant materials (e.g. seeds, cuttings, budwood, 
plantlets, fresh fruit, flowers, timber, and agricultural produce), and animals and animal products.  KEPHIS issues permits for plant materials, live insects or biological control organisms for plants and the environment, and for the introduction of geneti cally modified organism s (GMOs), after approval 
by the National Council Biosafety Committee, whic h is under the National Council of Science and 
Technology (NCST) of the Ministry of Research Science and Technology. A permit must be obtained 
prior to shipment from the country of origin and regardless of whether the products are duty free, 
gifts, or for commercial or experimental purposes.  The original permit, which must be sent to the 
relevant authorities in the exporting country, specifies the requirements and indicates prohibitions, and "restricted quarantine" importation.  A perm it is also required for imports of grain for 
consumption, processing, or manufacture.  Plan t materials and animal products (including live 
animals) must be imported through designated points of entry. 
41. The Kenya Standing Technical Committee for Imports and Exports (KSTCIE) advises the 
Agriculture Secretary (formerly Director of Ag riculture) and the Managing Director KEPHIS on 
import measures for products not adequately covered by existing regulations (e.g. technical issues 
related to quarantine regulations, applications fo r "open quarantine", application and use of bio-
control agents, and GMO).   
42. In addition to products listed in  Table AIII.2, import prohibitions apply to any plant-rooting 
medium that consists either wholly or in part of soil, whether or not it is attached to any plant;  and 
fruit grown in or consigned from countries where the Mediterranean fruit fly is common.  Imports of 
 
70 WTO document G/SPS/ENQ/17,  20 October 2004 and G/S PS/NNA/8, 20 December 2004.  
71 Research institutions may import seed for research purposes.  However, such seed must fulfil import 
conditions currently in force to safeguard against the introduction of foreign quarantine diseases.   
72 USTR (2005).  
73 KEPHIS online information. Available at: http://www.kephis.org/importation.html 
[2 February 2006]. EAC-Kenya WT/TPR/S/171/KEN 
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                                                      agricultural chemicals are subject to prior authori zation by the Pest Control Products Board (PCPB), 
which inspects and licenses all premises involved in  the production.  Formulations of biological 
control agents sold as commercial products, under the Trade Mark Act, are also registered by the 
PCPB.  Licensing for distribution and sale of agricultural chemicals imported or distributed in Kenya 
is the responsibility of PCPB.  Chemicals must be tested locally by an appointed research agency 
before their registration.  Fertilizers for use in Kenya must meet technical standards as provided for in the 1963 Fertilizers and Animal Foodstuffs Act, as revised in 1977.  A Code of Conduct, based on FAO guidelines, and requiring, inter alia , controls in the manufacture, packaging, labelling, and 
distribution of agricultural chemicals, must be  signed by persons involved in such activities. 
43. The Department of Veterinary Services, under the Ministry of Livestock and Fisheries, is 
responsible for permits for imports of live animal s, animal products, and "biologicals". There is a 
specific veterinary import permit for each species (e.g. cattle, sheep, birds).  All animals to be exported to Kenya must be held, for 21 days, in approved quarantine facilities that must be inspected 
regularly by the veterinary authorities of the exporting country, subject to inspection by the veterinary officer from Kenya, where necessary.  All the tests, clinical examinations, and treatments, which must 
be carried out during the quarantine period, must be stated in the veterinary certificate to confirm freedom from disease.  The animal s may be held for 14 days in quarantine facilities at the port of 
entry at the cost of the importer.  All costs of post-arrival selection, testing, treatment, transport, 
quarantine, and services must be borne by the importe r.  The veterinary officer at the port/airport of 
entry issues a health clearance cer tificate if inspection shows the animals to be healthy and all 
accompanying health certificates are in order.  The 1972 Meat Control Act, revised in 1977, provides standards for the storage and transport of meat a nd of animals for slaughter, and for the manufacture 
of meat products (e.g. name/description of manuf acturer, composition, additives or contaminant, 
labelling and packaging).  Ante and post mortem inspec tions are required;  prior to packing, the meat 
must be re-inspected.  The Plant Protection Act also c ontains provisions to restrict the spread of insect 
pests and pathogens that occur in isolated areas of Kenya.
74  
44. Imports of animals and animal products from c ountries with groups A and B diseases (per the 
OIE classification) and with bovine spongiform en cephalopathy (BSE) are also banned.  Fruit grown 
in all countries other than Tanzania or Uganda must be accompanied by a certificate issued by an 
authorized officer of the exporting country indicating that a stated percentage  of the packages in the 
consignment have been examined and found to be free from insect pests.  "High risk biologicals" may 
only be imported by laboratories with high biosecu rity facilities and with express authority from the 
Director of Veterinary Services.  The Public H ealth Department is responsible for ensuring food, 
drugs, and chemical substances comply with health and safety standards, under the Public Health Act 
(Cap 242), and the Food, Drugs and Chemical Substances Act (Cap 254).  
45. The Kenya Biosafety Regulations Committee is res ponsible for all issues related to biosafety.  
The introduction of, and research on, genetically modified organisms (GMOs) are regulated by the Science and Technology Act, which requires a prior environmental impact assessment of projects involving GMOs.  A Biotechnology Policy and a Bio safety Bill are under preparation (May 2006) and 
will include provisions on GMOs.   
 
74 Currently, domestic quarantine is in  place on:  larger grain borer ( Prostephanus truncatus ) confined 
to south-eastern Kenya;  serpentine leaf minor (liriomyza trifolii ) confined to eastern Kenya;  cassava bacterial 
blight ( Xanthomanas manihotisi ) confined to cassava-growing areas of western Kenya;  banana nematode 
(Radophilus simulus ) confined to central Kenya;  a nd ascochyta blight of cowpeas (assochyta rabiei ) introduced 
in Kenya in 1990 and confin ed to Machakos District. WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      46. Since 2000 (to May 2006), Kenya has notif ied 27 emergency measures to the WTO 
Committee on Sanitary and Phytosanitary Measures.75  The majority of these measures concern the 
import of domestic and wild birds,  eggs, and bird meat products.  
47. Kenya is a member of the Codex Alimentarius, the World Organization for Animal Health 
(OIE), and the International Plant Protection Commissi on.  It is also a party of the Union for the 
Protection of New Varieties of Plants (UPOV) and the Convention on International Trade in 
Endangered Species of Wild Fauna and Flora (CITES).  
(c) Marking, labelling, and packaging  
48. 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 
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 ma nufacturer, and product registration number.
76  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.  Plant residues may be used as packing material if they 
are accompanied by a certificate stating that a ll seeds, pathogens, and insects have been killed. 
(vii) Other measures 
49. According to the authorities, no official counter-t rade or offsetting agreements are currently in 
force to influence the quantity or value of goods and services exported to Kenya.  No local-content 
requirements are applied.  
50. Kenya maintains a strategic food reserve of ma ize, which amounted to some 188,000 tonnes 
in February 2006.77  The reserve stock is managed by the National Cereals and Produce Board 
(NCPB), under the Ministry of Agriculture.   
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures 
51. The registration formalities for imports of goods  for commercial purposes (section (2)(i)) also 
apply to exports;  these formalities confer the title of trader.  Specifi cally, all exports must be carried 
out on the basis of a certificate.  Exporters must comp lete a form and present it with the invoice to the 
Customs Services Department of the Kenya Revenue Authority;  on the basis of these documents, the 
Department issues the certificate.  According to the authorities, these formalities are required for 
statistical purposes. 
(ii) Export taxes and charges 
52. An export tax of 25% applies to hides and skins,  and scrap metal.  The tax was introduced in 
2004 to encourage local processing. 
 
75 WTO documents G/SPS/N/KEN/2-28, 26 April 2001 to 1 May 2006. 
76 International Trade Canada (2004). 
77 USAID (2006). EAC-Kenya WT/TPR/S/171/KEN 
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                                                      (iii) Export prohibitions, restrictions, and licensing 
53. Goods specified in Part C of the Eighth Sche dule to the Customs and Excise Act are subject 
to an export prohibition, while goods listed in Part D are subject to export licensing.  The Minister of 
Trade and Industry may amend the lists, by order in the Gazette .  Export prohibitions apply to round-
wood and, if sent by post, to firearms and ammun ition of all types, and to other articles having the 
appearance of lethal weapons.     
54. A licence is required for exports of most agri cultural products, food, minerals, and mineral 
products.  Exports of certain agricultural and food products are subject to special licences for self-
sufficiency purposes.   
55. Products considered as having aesthetic value or  security importance to Kenya, and products 
covered by international conventions to which Kenya is a signatory (e.g. CITES) require prior 
authorization by the relevant ministries before th e licence is issued by the MTI.  Products currently 
subject to prior authorization include78:  military equipment and mun itions;  engines and transport 
equipment differing from normal specifications;  antiques and works of art; bullion and coins; archives; live animals other than livestock  and pets ; wood charcoal and timber;  shells, cowries, and 
corals;  ivory, rhino horn and other products related to endangered species; and human bones.  Moreover, exports of medicame nts (including veterinary medicaments) and motor vehicle 
components, parts or accessories, not manufactured in Kenya, are subject to prior approval by the Treasury.   
56. Plant exports are subject to a phytosanitary certificate and animals and animal products to a 
health and sanitary certificate.   Health, sanitary, and phytosanitary measures on imports, especially 
certificate requirements (section (2)(ix)(b)), apply equally to exports. 
57. Kenya applies no voluntary export restraints or export quotas.   
(iv) Export subsidies and incentives 
58. According to the authorities, Kenya does not gr ant any export subsidies.  Nonetheless, three 
incentives schemes are available to Kenyan companies to encourage export-oriented activities:  the 
Export Processing Zones (EPZ) Scheme, the Manu facturing Under Bond Scheme, and the Duty 
Remission Scheme.  No information is availabl e on total revenue forgone under these schemes.  
Moreover, exports are zero-rated for VAT refund purposes.   
59. The Export Processing Zones Scheme, instituted in  1990, allows for duty and VAT exemption 
on imported machinery (except motor vehicles) an d raw materials.  In addition to high-quality 
infrastructure, companies located in EPZs benefit fro m a ten-year corporate, income, and withholding 
tax holiday, exemption from stamp duties, and a 100% investment allowance (applicable over 
20 years).  The Export Processing Zones Authority (EPZA) acts as the primary licensing and regulatory agency on behalf of the Government in order to allow rapid project approval and facilitate licensing.
79  EPZ companies must pay an application fee of US$250 and an annual licence fee of 
US$1,000.   
 
78 WTO document G7LIC/N/1/KEN/1, 12 June 2003. 
79 With a view to promoting investment in Kenya, the EPZA has also published a large number of 
sector profiles on Kenya's economy ("Sector Prof iles: Sector Profiles Overview". Available at: 
http://www.epzakenya.com/sector.php?sub=44&cat=12). WT/TPR/S/171/KEN  Trade Policy Review 
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 60. EPZ companies may sell up to 20% of their a nnual output on the national market, subject to 
approval by the Minister for Trade and Industry an d payment of normal import duties and taxes on the 
products.  A surcharge of 2.5% may also be levied if it is determined that the sale is so significant as 
to cause injury to domestic industries producing similar goods.  
61. The importance of EPZs has grown considerably  since Kenya's TPR in 2001.  There are 
currently 43 EPZs in Kenya, employing 39,000 staf f;  and EPZ exports exceeded K Sh 20 billion in 
2005 (Table III.1).  According to the authorities,  over 70% of EPZ output, mainly garments and 
apparel, is exported to the United States under the AGOA.  Some 85% of EPZ companies are owned by non-Kenyans;  39 EPZs are managed by private i nvestors, while two have been developed by the 
EPZA.  Most EPZs are located in Mombasa or Nairobi. 
Table III.1 
Key EPZ performance indicators, 2000-05 
(K Sh million, unless otherwise indicated)  
 2000 2001 2002 2003 2004 2005 
Gazetted zones (number)  19 23 31 37 41 43 
Enterprises operating (number)  24 39 54 66 74 68 
Total employment (number) 6,620 13,758 27,148 39,111 38,560 38,851 
  Employment (Kenyans) 6,487 13,444 26,447 38,199 37,723 38,051 
  Employment (expatriates) 133 314 701 912 837 800 
Turnover 4,392 6,499 11,040 14,817 24,217 23,774 
Exports 3,635 5,962 9,741 13,812 23,047 20,036 
Domestic sales 755 538 932 619 651 3,160 
Imports 2,349 3,990 7,043 9,920 13,029 12,497 
Investment 6,107 8,950 12,728 16,716 17,012 18,682 
Total domestic expenditurea1,187 2,235 3,651 4,969 7,331 8,255 
Contribution to manufacturing sector employment (%) 3.6 7.4 11.5 15.9 15.6 15.4 
Contribution to GDP (%) 0.53 0.77 1.30 1.53 2.19 2.03 
a Foreign exchange equivalent injected into the economy. 
Source: Export Processing Zones Authority. 
62. The Manufacturing Under Bond (MUB) Scheme was introduced in 1989, under Part IV A of 
the Customs and Excise Act.  Under the scheme, fi rms exporting their total output are exempted from 
payment of import duties and VAT on inputs, includ ing plant, equipment, and raw materials.  The 
exemption is subject to the posting of a customs bond.  Eligible firms also enjoy an investment allowance of 100% on immovable fixed assets.  To be eligible, investors must provide documentary 
evidence showing financial ability, technical know-how , and market availability;  or prove that the 
total value of exports will be ove r US$440,000 per year;  or demonstrate that the enterprise can create 
employment for at least 50 Kenyans.  
63. Licences for companies using the MUB Scheme are issued by the Commissioner of Customs 
and Excise;  applications are processed by the I nvestment Promotion Centre, which coordinates the 
scheme.  The current designated locations for the scheme are Nairobi, Mombasa, Kisumu, Thika, Eldoret, Nakuru, and Nyeri.  With the approval of the Commissioner of Customs and Excise, MUB companies may sell their products on the domestic ma rket, subject to the payment of normal duties 
and taxes plus a 2.5% surcharge on the dutiable value. 
64. Under the Duty Remission Sche me, operational since 1990, the Minister of Finance grants 
remission of duties and VAT on goods imported fo r use in the production of manufactured goods for 
export, or for the production of raw materials for us e in manufactured products for export, or for the 
production of "duty-free items" for sale domestically.  The scheme is administered by the Trade EAC-Kenya WT/TPR/S/171/KEN 
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                                                      Remission Exports Office (TREO).  The remission is  subject to the posting of a bond to cover the 
amount of unpaid duty.  In order to recover the bond,  exporters must demonstr ate, within six months, 
that the imports have been incorporated into the production of final goods that  have been exported.  
The scheme is used mainly by exporters of horticul tural, pharmaceutical, and agricultural products.   
(v) Export finance, insurance, and guarantees 
65. Kenya does not have any public export finance,  insurance or guarantee schemes.  Export 
finance and insurance must be taken with privat e companies whose prices are market-determined.  
The authorities indicate that the introduction of an export credit insurance scheme is under 
consideration. 
(vi) Export promotion and marketing assistance 
66. The Export Promotion Council (EPC), established in 1992, has the mandate to promote and 
develop Kenya's export activities.  The EPC's activiti es revolve around five pillars:  (1) export market 
development through identifying market opportunities and formulating market penetration strategies, 
including contact information programmes, market research, trade fairs and missions;  (2) product 
development and adaptation to e xpand and diversify Kenya's export product range;  (3) trade 
information and delivery services;  (4) trade pol icy facilitation to enhance the country's export 
competitiveness;  and (5) development of exporting skills  through information of interest to exporters.  
The EPC also maintains a Centre for Business In formation in Kenya (CBIK), which provides business 
information and support services, and houses a WT O reference centre for the business community.  
The EPC operates as a limited company, but r eceives logistic support from the MTI and financial 
support from the Ministry of Finance and international donors.   
67. The 2003-2008 National Export Strategy (NES) is  Kenya's main policy paper related to 
export promotion.  The Strategy aims to improve  Kenya's export performance by deepening existing 
export markets, opening up new markets, diversifying the export base away from reliance on traditional exports, enhancing market access, and stre ngthening institutional support networks through 
trade facilitation and enhancing competitiveness.
80  The EPC focuses on six of the fourteen priority 
sectors identified in the NES, i.e. horticulture and other agriculture subsectors (mainly tea and coffee), 
textiles and clothing, commercial crafts and SMEs , fish and livestock, other manufactures, and 
services other than tourism.   
68. Other agencies involved in export promotion and marketing include the Export Processing 
Zones Authority (EPZA), the Kenya National Ch amber of Commerce and Industry (KNCCI), and 
sectoral producer and exporter associations such as the Kenya Association of Manufacturers. Sectoral parastatals, such as the Horticu ltural Crops Development Authority, are also involved in export 
promotion activities. 
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Incentives 
69. Several incentive schemes are in place to en courage investment in Kenya, including tax 
holidays and investment allowances (Chapter II(4)).  In addition, duty and tax rebates and remissions are available under the manufacturing-under-bond, duty remission, and export processing zones schemes (section (3)(v) above).   
 
80 Ministry of Trade and Industry (2005). WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      70. A number of government agencies provide agricultural extension services, e.g. promoting the 
use of certain species, veterinary services, artificial insemination, and tractor-hire services to small-
scale farmers (Chapter IV(2)(ii)).  However, pub lic support for extension services has declined in 
recent years, from an average of 5.9% of the budget in the 1990s to around 1.5% in 2003/04.81  In 
implementing the Strategy for Revitalizing Agriculture  (SRA), the Ministry of Agriculture intends to 
allocate K Sh 13.5 billion to agricultural de velopment funds over the 2005-08 period. 
71. 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.   
72. There is a large number of agricultural research institutes, many of them focusing on specific 
produce (coffee, tea, sugar, etc.).  Their funding is  mostly from donor support, but the Government is 
trying to increase its own contribution (Chapter IV (2)(ii)).  Public expe nditure on industrial R&D 
amounts to less than 0.1% of the budget;  the Keny a Industrial Research Development Institute is the 
key agency for industrial R&D.   
(ii) Government procurement 
73. Kenya's public procurement regime is in a tran sition period, as new legislation was adopted in 
2005, but has not yet been implemented due to the lack  of relevant regulations  (May 2006).  Thus, the 
Exchequer and Audit (Public Procurement) Regula tions of 2001 are still in use for government 
procurement.  These regulations generally require  competition for all proc urements above US$100.  
Below this limit, sole sourcing is allowed.  Procurements between US$100 and US$6,000 should use 
restricted tendering;  procurement above US$6,00 0 is subject to open tenders.  No preferential 
margins are granted to local suppliers.  Decisions are taken by tender committees, which were created 
for all public institutions.  However, it has been noted that under this regime, tenders in Kenya were often manipulated and awarde d to non-competitive firms. 
82 
74. In an effort to promote efficiency and in tegrity, and to increase transparency and 
accountability in public procurement procedures, the Parliament enacted a new Public Procurement and Disposal Act in 2005.  The Act lays down, inter alia , provisions on qualifications for awarding 
contracts, confidentiality, and communication with the procuring entity.  The Act also led to the establishment of the Public Procurement Oversight Authority, whose main functions are to ensure 
compliance with procurement procedures, monitor the public procurement system, and assist in the 
implementation and operation of the system.  
 
75. According to the authorities, regulations under th e Act were expected to be adopted by the 
end of June 2006.  The draft regulations provide for, inter alia , standard procurement documents, the 
composition of tender committees, advertisement peri ods, a code of ethical conduct to be signed by 
suppliers, and threshold values for different proc urement methods.  Government procurement in 
Kenya is decentralized.  Each procuring entity must establish a tender committee.  The regulations lay 
down the composition of tender committees for differe nt types of procuring entity (ministries, 
districts, state-owned enterprises, local authorities, etc.). 
76. Under the new Act, government procurement may be carried out through open tender, 
restricted tender, or direct purchase.  Under ope n tendering, the procuring entity must publish the 
 
81 Ministry of Agriculture (2004) .  
82 USTR (2005 and 2006);  and OECD Development Centre (2003).  EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-65 
 
 
                                                      invitation to tender and the procurement value;  it must also make tender documents available to 
persons wishing to submit tenders.  If the cost of  open tendering would be disproportionate to the 
contract value, or the contract value falls below the prescribed minimum (fixed by the draft 
Regulations at K Sh 5 million), restricted tendering ma y be used.  Restricted tendering is also used if 
there is a limited number of bidders.  Procedur es are similar to open tendering, except that only 
selected suppliers are invited to participate.  The direct purchase method is used if there is only one 
supplier, an urgent need, or if the procurement co mplements an existing contract.  In such cases, the 
procuring entity may negotiate directly with the supplier.83  The procuring entity publishes its 
decision and, upon request, provides reasons for rejecting bids. 
77. The draft regulations distinguish between various  methods of tendering.  Direct procurement 
is allowed for procurement of up to K Sh 300,000.  Request for quotation is allowed for procurement 
of up to K Sh 3 million.  Open tendering is compul sory for all procurement above K Sh 5 million.  
Restricted tendering, with pre-qualification of suppliers and at least three bidders, is allowed for procurement of up to K Sh 20 million.  The decision to open a national or inte rnational tender is made 
on a case-by-case basis.  The splitting of a procurement contract is prohibited.  The Regulations 
provide for preferential margins of up to 15%, with the exact rate depending on the share of national 
inputs used. 
78. A Public Procurement Complaints, Review a nd Appeals Board was instituted in 2001.  The 
number of appeals brought before the Board increased from eight in 2001 to 46 in 2004.  The Board's 
decisions were mixed, between dism issal, annulations, and re-tendering.84  In 2005, the Board was 
replaced by the Public Procurement Administrative Review Board, established by the new Act.   
79. The authorities indicate that no data are availa ble on public procurement in Kenya.  Central 
government procurement in Kenya is estimated at some 8% of GDP.85 
80. Kenya is neither a signatory nor an obser ver to the WTO Plurilateral Agreement on 
Government Procurement.   
(iii) State-trading enterprises, state ownership, and privatization 
81. Kenya has notified the WTO that it does not ha ve any state-trading enterprises within the 
meaning of Article XVII:4(a) of GATT 1994.86 
82. Kenya's privatization efforts date back to 1992, when the Government launched a programme 
on Public Enterprises Reform and Privatiza tion (PERP).  Under the PERP, 207 out of 
240 commercially oriented enterprises were scheduled for privatization;  33 enterprises, mainly in 
telecommunications, transport, and banking, we re excluded from privatization as they were 
considered of "strategic importance".87  A Parastatal Reform Programme Committee (PRPC), chaired 
by the Minister of Finance, was responsible for the implementation of the programme.  By end 2002, 
108 enterprises had been privatized, although the pr ogramme had essentially come to a halt in 1998  
(Table III.2).  The most common privatization method was pre-emptive rights, followed by 
 
83 The Public Procurement an d Disposal Act, 2005.  
84 Public Procurement Directorate (2005).  
85 OECD Development Centre (2003). 
86 WTO document G/STR/N/11//KEN, 27 March 2006. 
87 UNCTAD (2005). WT/TPR/S/171/KEN  Trade Policy Review 
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 receiverships, competitive bidding, and liquidation.  The programme generated divestiture receipts of 
K Sh 10.4 billion, which were incorporated into the state budget.88  
Table III.2 
Privatized enterprises, 1991-02 
Privatization methods 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Total 
Liquidations 0 7 1 1 3 0 0 0 0 0 0 0 12 
Receiverships 0 1 5 2 5 1 0 0 0 0 0 0 14 
Pre-emptive rights 1a1 10 7 12 6 16 0 0 0 0 0 53 
Public floatation 1a0 2 1 0 4b0 0 0 0 1 0 9 
Competitive bidding 0 0 2 3 6 3 0 0 0 0 0 0 14 
Management/employee 
buyout 0 0 0 0 0 1 0 0 0 0 0 0 1 
Partial divestitures 0 4 0 0 0 0 0 1c0 0 0 0 5 
Total  2 13 20 14 26 15 16 1 0 0 1 0 108 
a Pre-programme transactions.  
b Kenya Airfreight Handling and Kenya Fl amingo Airways, subsidiaries of Kenya Airways, were counted individually.  
c Kenya Commercial Bank was partially disinve sted in various years, latest in 1998. 
Source:  Ministry of Finance (2005b), Draft of Sessional Paper on Privatization of State Corporati ons and Investments. 
83. It was widely recognized that the PERP programme had a number of weaknesses and that its 
impact on the economy remained minimal.89  In particular, the majority of privatized enterprises were 
relatively small and not dependent on budgetary resources, whereas larger companies depending on 
public financial support and considered as strate gic were often excluded from privatization.  
Opposition to privatization by chief executives and lack of a legal framework for privatization procedures, together with diminishing donor fu nding, resulted in a practical cessation of the 
programme in 2002. 
84. After the PERP programme had become dormant, the Government increasingly recognized 
that poor performance of key enterprises, in part icular in basic infrastructure, was undermining 
Kenya's competitiveness.90  In mid-2003, in a renewed programme, the Government drew up a list of 
33 state-owned enterprises scheduled for partial or full privatization.91  The list includes mainly SOEs 
that were previously excluded from privatizati on under the PERP, including in telecommunications, 
transport, banking, and utilities (Table III.3).  
85. As part of the revitalized privatization progr amme, in 2005, Kenya's Parliament adopted a 
Privatization Act, which provides for a priva tization commission to oversee and implement the 
privatization programme.  According to the aut horities, the commission was to be established in 
June 2006.  Privatizations are to  be open and competitive.  Kenyans and foreigners are allowed to 
participate alike.  However, for specific transacti ons, the Minister of Finance may limit participation 
to nationals or require minimum participation.92 
                                                      
88 Ministry of Finance (2005b). 
89 Ministry of Finance (2005b). 
90 Ministry of Finance (2005a) .  
91 UNCTAD and ICC (2005) . 
92 UNCTAD (2005) .  EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-67 
 
 
 Table III.3 
Key state-owned enterprises schedu led for privatization during 2003-07 
Enterprise name Remarks/State of privatization as of May 2006 
Telkom Kenya Monopoly exclusivity expired in July  2004, undergoing restructuring to sell the 49% 
Government stake 
Kenya Commercial Bank Privatized through floating of shares 
Kenya Reinsurance Company Yet to be privatized 
Kenya Oil Refinery  Yet to be privatized 
Kenya Pipeline Company Yet to be privatized 
Kenya Airport Authority Yet to be privatized 
Kenya Railways A joint concession bid for 25 years of Kenya Railways and Uga nda Railways was won by a 
South Africa-led consortium 
Kenya Ports Authority Preparations under way for concessioni ng the container terminal and conversion of KPA into a 
landlord port 
Kenya Electricity Generation The Government proposes to reduce its direct equity from 51% to below 39%, IPO 
subscriptions are being processed  
Kenya Power & Lighting Company Yet to be privatized 
Source:  UNCTAD and ICC (2005), An Investment Guide to Keny a – Opportunities and Conditions , June;  and 
 information provided by the Ministry of Finance. 
86. As part of the privatization programme, the Government has also analysed Kenya's public 
entities to better distinguish institutions performing regulatory or soverei gn functions from those 
engaged in commercial activities.  As a result, 72  parastatals, in the following categories, were 
identified as non-commercial and to be retained under state control:  regulators (25), research 
institutes (10), educational and professional in stitutes (14), developmental and promotional 
agencies (11), cultural and social organizati ons (10), and revenue-collecting agencies (2).93  The list 
of regulators includes the Capital Markets Authority , the Coffee Board of Kenya, and the Electricity 
Regulatory Board, and revenue-collecting agencies include Catering Levy Trustees and the Kenya 
Revenue Authority. 
(iv) Competition policy and price controls 
87. The 1988 Restrictive Trade Practices, Monopoli es and Price Control Act (amended in 1990) 
regulates competition issues in Kenya.  Its primar y objective is to encourage competition in the 
economy by prohibiting restrictive trade practices.  A restrictive practice is defined as an act that 
reduces or eliminates opportunities to compete at, or to acquire goods or services at, fair market 
prices.   
88. The Act also prohibits predatory trade practi ces to repress competition, collusive bidding at 
auction sales, and collusive tendering.  The approva l of the Minister of Finance is required for 
mergers between two or more independent enterprises engaged in manufacturing or 
distributing/supplying substantially similar commod ities or services.  However, trade practices, 
"directly and necessarily" associated wi th the exercise of exclusive or preferential trading privileges 
legally conferred, or with the licensing of participants in certain trades and professions, are exempted 
from the provisions of the Act. 
89. Prices, including in the agriculture sector, are market-determined.   However, the national 
Cereals and Produce Board (NCPB) intervenes in the ma rket to sustain prices.  Furthermore, under the 
Act, the Minister may fix maximum prices or any maximum charge in respect of the sale of goods or the supply of services produced by monopoly undertaki ngs.  This has not happened since Kenya's last 
TPR in 2000.  
                                                      
93 See detailed list in Ministry of Finance (2005b), Annex 7.  WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-68 
 
 
 90. Complaints regarding restrictive trade practices may be submitted to the Minister of Finance 
through the Monopolies and Price Commission, estab lished under the Act.  The Commission initiates 
investigations either ex officio or following compla ints.  It is  headed by a Commissioner appointed 
by the Minister of Finance and has investigatory pow ers.  Appeals against an order of the Minister 
must be lodged with the Restrictive Trade Prac tices Tribunal (also established under the Act) within 
28 days of the making of the order.94  Appeals against decisions of the Tribunal are made to the High 
Court; these decisions are final.  Infringers are liable to a fine of up to K Sh 200,000  or imprisonment 
of up to three years or to both.   
91. Between 1998 and 2005, the Monopolies and Price Commission dealt with 234 cases of 
restrictive trade practices and 281 mergers and acqui sitions. It blocked three mergers in financial 
services, media and the cement industry, and approved several others conditionally. 
92. The authorities indicate that a review of Kenya's competition legislation is under way, and 
new legislation is under preparation. Factors cons training a more efficient competition policy include 
the lack of prosecutorial power by the Monopo lies and Price Commission and unclear enforcement 
provisions. 
93. A regional competition policy, under COMESA , was adopted in December 2004, and a 
COMESA Competition Commission is being established. 
(v) Intellectual property rights  
(a) Legal and institutional framework 
94. Kenya is a signatory to various treaties unde r the World Intellectual Property Organization 
(WIPO) (Table III.4).  Kenya is a member of th e Universal Copyright Convention (UCC), the African 
Regional Industrial Property Organization (ARIPO), and the International Union for the Protection of 
New Varieties of Plants (UPOV).   
Table III.4 
Kenya's membership of WIPO treaties, 2006  
Paris Convention (Industrial Property) June 1965 
WIPO Convention October 1971 
Geneva Convention (Unauthorized D uplication of Phonograms) April 1976 
Brussels Convention (Distribution of Programme-Carrying Signals Tr ansmitted by Satellite) August 1979 
Nairobi Treaty (Olympic Symbol) September 1982 
Berne Convention (Literary and Artistic Works) June 1993 
Patent Cooperation Treaty (PCT) June 1994 
Madrid Agreement (International Re gistration of Marks) June 1998 
Madrid Protocol (International Re gistration of Marks) June 1998 
Patent Law Treaty (PLT) June 2000 
Source:  WTO Secretariat. 
95. The Kenya Industrial Property Institute (KIPI) is the contact point for matters regarding 
industrial property, while the Department of th e Registrar General, under the Attorney General 
Chambers, is responsible for copyrights, and KEPHIS for plant breeders' rights.95  Kenya's national 
                                                      
94 The Restrictive Trade Practices Tribunal consists of a Chairman and two to four other members 
appointed by the Minister of Finance. 
95 WTO document IP/N/3/Rev.9/Add.1, 31 January 2006.  EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-69 
 
 
 IPR legislation was reviewed by the TRIPS Council in June 2001.96  During the period under review, 
Kenya has amended its legislation on intellectual property rights with a view to fulfilling its 
obligations under the TRIPS Agreement.  Amendments include the Copyright Act (Cap 130) of 2001;  
the Industrial Property Act (Cap 509) of 2001;  and th e Trade Marks Act (Cap 506) of 2002.  Bills on 
geographical indications and layout designs of inte grated circuits were submitted to Parliament in 
2001, but have not been enacted (as of May 2006).  A bill on trade secrets is also under consideration by Parliament.   
96. Kenya has strongly supported an amendment to the TRIPS Agreement on public health in 
order to avail cheaper medicines for developing and least developed countries.97  At the Hong Kong 
Ministerial Conference in 2005, Kenya submitted a communication reiterating its proposals on TRIPS-related issues, particularly on impl ementation, public health, and environment.
98  I t  a l s o  
supports extension of the TRIPS Agreement to genetic resources a nd traditional knowledge. 
97. Table III.5 gives an overview of IPR protection in Kenya.   
Table III.5 
Overview of IPR protection, 2006 
Subject  Coverage  Duration  Selected exclusions and limitations  
Industrial 
designs 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 
Layout-designs of integrated 
circuits Layout-designs of 
integrated circuits 10 years from filing date or first commercial 
exploitation Acts done for non-commercial purposes or for the sole 
purpose of evaluation, analysis, research or teaching 
Patents and utility models 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 theret o;  mere presentation of 
information;  and public health related methods of use 
of any molecule 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 inventions;  and extend only to acts done for 
industrial or commercial purposes  (e.g. not to scientific research) 
Table III.5 (cont'd) 
                                                      
96 Kenya replied to questions posed by Canada, th e European Communities, Japan, Switzerland, and 
the United States (WTO documents IP/Q/KEN/1, IP/Q2/KEN/1, IP/Q3/KEN/1, and IP/Q4/KEN/1, 7 May 2004). 
97 WTO documents WT/MIN(03)/W/21, 14 September 2003, and WT/MIN(03)/ST/161, 
23 December 2003. 
98 WTO document WT/MIN(05)/28, 16 December 2005.  WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-70 
 
 
 Subject  Coverage  Duration  Selected exclusions and limitations  
Trade marks 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  
Copyrights and related 
rights 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 fo r 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 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 are c ontrary to public order or 
morality;  and that are not or cease to be protected in 
their country of origin, or that  have fallen into disuse in 
that country 
Plant varieties 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:   WTO Secretariat, based on information provided by the Kenyan authorities. 
98. Between 2000 and 2003, the KIPI registered 84 patents (20 to foreign applicants) and 
27 utility models (one to a foreign applicant).  
(b) Patents 
99. The protection of patents in Kenya is governed by the Industrial Property Act of 2001.  Patent 
applications, accompanied by a specification of th e invention, necessary forms and application fees, 
must be submitted to the KIPI.  Procedures and documents required for a pplication for patent 
protection are laid down in the 2002 Industrial Pr operty Regulations.  The Second Schedule of the 
regulations provides that annual fees must be paid  in progressive rates of K Sh 2,000 (US$300 for 
foreigners) in the 2nd year to K Sh 50,000 (US$2,500) in the 20th year.  The patent application is to be EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-71 
 
 
                                                      published in either the Kenya Gazette or an industrial property journal.  The 2001 Industrial Property 
Act increased patent protection from 17 years to 20 years.   
100. The 2001 Industrial Property Act provides for the possibility of compulsory licensing for 
commercial use after four years from the filing date or three years from the granting date, in cases of 
non-working of a patent, high prices for medicine, or interdependence of patents.  Exploitation of a 
patented invention for non-commercial purposes may be undertaken by the Government, or persons 
authorized by the Government, on grounds of public interest, provided that contractual licences have 
been unsuccessfully sought and that the patent ho lder is compensated.  Public interest includes 
reasons of national security, nutrition, health, a nd environmental conservation.  One compulsory 
licence has been granted, for the local production of anti-HIV/AIDS drugs. 
101. The 2001 Industrial Property Act explicitly allows parallel imports.  One of the objectives is 
to enable Kenya access to anti-viral drugs from cheaper sources.   The Act also contains a "Bolar 
provision" which allows generic manufacturers to undertake the appropriate trials, registration, and 
approval to be ready to start production as soon as the patent expires.99
   
102. Utility models, technovations100, and industrial designs are also protected under the 2001 Act.  
To qualify for a utility model certificate, an inve ntion must be new and industrially applicable.  
Industrial designs are protected for five years begi nning from the date of their deposit, renewable for 
two consecutive periods.  Plant varieties are excluded from patentability, but protected under the Seeds and Plant Varieties Act of 1999 through a special sui generis  system, in accordance with UPOV 
1978, and administered by the KEPHIS.
 
(c) Trade marks 
103. Under the Trade Mark Act, any mark (including names, signatures or words) may be 
registered with the KIPI.  Service marks, trade na mes, and containers can also be protected as trade 
marks, whereas no protection is granted to sounds or perfumes.  Upon receipt of an application, KIPI 
examines it to ensure that the requested trade mark  meets the requirements.  If successful, the trade 
mark is published in the KIPI Journal ;  the public has 60 days from the date of the publication to 
object to its registration.  Prior use is not requi red for trade mark registration.  Trade marks are 
protected for an initial period of ten years, a nd renewable indefinitely for ten-year periods. 
104. Application fees are K Sh 4,000 for local app licants and US$200 for foreign applicants.  
(d) Copyrights 
105. The protection of copyrights and related rights in Kenya is governed by the Copyright Act of 
2001.  Protection is for the lifetime of the author plus 50 years.  Computer programs and compilations of data, including tables, are protected as literary works.  An amendment to the Copyright Act has 
been adopted to include both an object and source c ode in the definition of a computer program.  The 
Act also recognizes folklores.  Under Section 36 of the Act, producers of sound recordings and audio-visual works must request authentication of th eir work from the Copyright Board.  This has 
 
99 Otieno-Odek, J. (2001) .  
100 A technovation is defined as a solution to a specific problem in the field of technology, proposed by 
an employee of an enterprise for use by it.  This solution must relate to its activities but must have not been used 
or actively considered for use by that enterprise.  WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      introduced a registration requirement for certain copyrights in Kenya, in contrast to general 
practice.101   
(e) Enforcement 
106. IPR enforcement in Kenya involves various aut horities, including the KIPI, the KEPHIS, the 
Attorney General Office, the police, customs, and the judiciary.  In November 2001, the KEBS and 
the Kenya Association of Manufactures formed the National Committee on Counterfeits, whose main 
function is to deal with IPR infringement.  The aut horities indicate that an anti-counterfeit bill is under 
preparation.  
107. Industrial property is protected under both civil and criminal procedures.  Wilful infringement 
of industrial property rights is s ubject to criminal procedures and penalties, including imprisonment or 
fines, as well as seizure, forfeitu re, and destruction of infringing goods and applicable equipment.  
The right owners of a patent, utility model or industrial design may apply to the Industrial Property Tribunal for a prohibition of infringement or an  injunction to prevent infringement where it is 
imminent.  Any infringement of a patent constitutes an offence punishable by a fine ranging from 
K Sh. 10,000.00 to K Sh 50,000.00, or by imprisonment from three to five years, or both.   
108. The High Court has jurisdiction over civil ac tions against infringement of trade marks, 
copyrights, and related rights.  Right owners ma y apply for injunction and sue for damages.  An 
"Anton Piller Order" has been incorporated in the 2001 Copyright Act, whereby copyright owners 
who have prima facie  evidence that their rights have been infringed, can obtain ex-parte  orders from 
the court to secure the presentation of the allege d infringing articles as evidence.  Infringements of the 
Copyright Act are subject to imprisonment of up to ten years or fines of up to K Sh 800,000, while fines for trade marks infringement range from K Sh 10,000 to K Sh 200,000. 
 
101 Otieno-Odek, J. (2001) . EAC-Kenya WT/TPR/S/171/KEN 
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                                                      IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. Agriculture remains a key sector of the Kenyan economy despite a continuous reduction of its 
contribution to GDP over the last few years.  A ll the marketing boards are still in operation, albeit 
with relatively limited powers. Kenya is implem enting a 2004-14 agriculture strategy aimed at 
ensuring food security as well as transforming th e sector into a profitable, competitive activity, 
capable of attracting private investment.  Average ta riff protection in agriculture (major division 1 of 
ISIC, Revision 2) is 17.3%, with rates ranging from zero to 75%. 
2. Kenya's mining and quarrying sector remains underdeveloped.  Mining activities, which 
centre around soda ash, are dominated by state-ow ned companies that are present mainly in 
exploitation activities. Mining and quarrying (major di vision 2 of ISIC, Revision 2) is the least tariff-
protected sector with an average MFN customs tariffs of 5.8%. 
3. The manufacturing sector is still largely inward-ori ented, with part of the production exported 
to regional markets.  A two-phase industrialization strategy was formulated in 1997 in an attempt to 
increase the value-added of primary exports, particularly agricultural products. Under the first phase, 
covering the period 1997-06, Kenya is promoting the expansion and modernization of existing 
industries. Manufacturing industries requiring significant infrastructure investment, a highly skilled workforce, and the formation of large investme nt packages are to be promoted during the second 
phase of the industrialization strategy as from 2007. MFN customs tariffs on manufactured goods (major division 3 of ISIC, Revision 2) average 12. 8%, with rates ranging up to 100% on certain food 
products. 
4. In terms of contribution to GDP, services is increasingly the most important sector of the 
economy.  State intervention remains in most subsectors, including in financial services where state-owned banks hold the major share of  deposits and loans.  Kenya's overall infrastructure needs to be 
upgraded; this, together with further liberalization of services, should improve the efficiency of the 
economy, especially by reducing costs related to fi nancial services, telecoms, and transport. To this 
end, some state-owned enterprises in the sector ha ve been (or are to be) privatized/concessioned.  
Kenya's specific commitments under the GATS cover several services areas. 
(2) AGRICULTURE AND RELATED ACTIVITIES  
(i) Main features 
5. Agriculture (including livestock, forestry, and fishing) is the backbone of Kenya's economy 
(Chapter I(1)).  Around 80% of the population lives in rural areas and derive their livelihood largely 
from the sector. Kenya's agriculture  grew at an annual average of 1.3% during 1990-00 and about 2% 
over 2000-04.102  The sector has been constrained by several problems, including an inappropriate 
legal and regulatory framework; lack of capital a nd access to affordable credit; frequent floods and 
droughts103; and poor infrastructure.  Kenya is a net-food importing developing country.104 
 
102 The sector's poor performance has been widespread, except for horticulture, which has maintained 
good growth.   
103 Following the severe drought in 2005-06, the United Nations World Food Programme appealed for 
resources to feed 2.5 million people in Kenya ( International Herald Tribune , 23 January 2006). 
104 WTO document G/AG/5/Rev.8, 22 March 2005. WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      6. Only about 16% of Kenya's landmass is of high or medium agriculture potential, with 
adequate and reliable rainfall.105  Landmass is distributed as follows: crops (31%), grazing (30%), 
forests (22%), and the rest is used for game parks, urban centres, markets, homesteads and 
infrastructure. Kenya's agriculture is predominan tly small-scale farming (75% of total agricultural 
output and 70% of marketed agricultural produce) . Small-scale farms (ave raging 2-3 ha.) produce 
over 70% of maize, 65% of coffee, 50% of tea, 80% of milk, 85% of fish, and 70% of beef and related 
produce. Large-scale farming (averaging about 50 ha.) accounts for 40% of irrigated land106, and 
involves mainly crops growing, and livestock for commercial purposes.  
7. Fishing in Kenya takes place mainly in the in land lakes;  Lake Victoria accounted for 88.8% 
of total fish landed in 2004. The main fishing produc t is the Nile perch, followed by tilapia, and dagaa 
(omena). Marine fishing in the In dian Ocean (7,200 tonnes in 2004, i.e. 5.8% of total fishing) and 
aquaculture remain underdeveloped. Total fish  landed decreased from 202,639 tonnes in 2000 to 
124,352 tonnes in 2004, lowering th e subsector's contribution to GDP from 0.7% to 0.5%.107 
8. Kenya's national forest cover has declined from 16% of total land area three decades ago to 
about 1.7% currently as a result of unplanned excision of land for settlements, and excessive 
harvesting of trees without replanting.108  Cypress, pine, and eucalyptus are the main species grown, 
covering over 80% of the area planted. Forestry and logging activities are carried out mostly by public bodies, which also own a large share of the plantations. During 2000-04, forestry and logging's contribution to Kenya's agricultural output remained stable at 1.1% per year.
109  
(ii) Policy developments 
9. In 2004, Kenya unveiled its Strategy for Revita lizing Agriculture (SRA) 2004-14, with the 
objective of transforming agriculture into a profitable, commercially oriented, and internationally competitive activity, capable of a ttracting private investment, so as to reduce poverty, create high 
quality employment, increase value-ad ded, and provide food security.
110  Two of SRA's key targets 
are to achieve an average annual growth rate of 5%  for agriculture by 2007, and to reduce the number 
of people who are food-poor from 48.4% to 23.5% in 2008 and below 10% in 2015.  
10. Five ministries are mainly responsible for SR A's implementation:  Agriculture (MoA);  
Cooperatives Development and Marketing;  Liv estock and Fisheries Development;  Land and 
Housing;  and Environment and Natu ral Resources.  In addition, the Ministry of Local Government  is 
to collaborate with other relevant ministries, to re view and harmonize legislati on that has a bearing on 
the SRA.111 The SRA will be implemented by the Government with the assistance of development 
 
105 About 84% of Kenya is arid or semi-arid and not suitable for rain-fed farmi ng due to low and erratic 
rainfall. The low rainfall zone, which receives 200-350 mm of rainfall annually, is home to about 20% of the 
population, 80% of the country's livestock, and 65% of Kenya's wildlife (Ministry of Agriculture, 2004). 
106 Irrigation-based farming is still very limited. Out of 540,000 ha of irrigable land, less than 90,000 ha 
have been irrigated. Small-scale farmers account fo r 42% of irrigated land and government-managed schemes 
for 18% (African Development Bank, 2005). 
107 Central Bureau of Statistics (2005). 
108 The destruction of forestland has also contributed  to the increased rates of flooding (Ministry of 
Agriculture, 2004). 
109 Central Bureau of Statistics (2005). 
110 It is estimated that the Government spends around US$40-65 million annually on famine relief 
(Ministry of Agriculture, 2004). 
111 The relevant ministries include: Treasury on matters relating to the review of the Banking Act on 
financial services, and taxation of agriculture; Public Works, Roads and Housing on the construction and maintenance of rural access roads; Energy on powe r supply and rural electrification; Transport and EAC-Kenya WT/TPR/S/171/KEN 
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                                                                                                                                                                     partners, local authorities, and the private sector.  The initial government contribution is expected to 
be high, partly due to both the increase in costs of adjustment, and the establishment of the funds needed to help the private sector take up the rol es being relinquished by the Government.  Estimates 
of the funds required annually during 2005-08 incl ude: Rural Development Fund (K Sh 5 billion); 
National Extension Fund (K Sh 3.5 billion); Cr edit Seed Fund (K Sh 3.5 billion); and National 
Research Fund  (K Sh 1.5 billion).
112 
11. Some of the specific measures envisaged by the SRA are:  reforming the legal and regulatory 
framework;  promoting research and technology deve lopment;  creating a more effective extension 
service system;  reducing taxes;  and establishing and developing a market-based agricultural credit 
and inputs system.113 
12. The sector is currently governed by 131 pieces of legislation, including legislation for the 
many supporting institutions: 26 statutory boards (18 commodity regulatory boards, and eight 
parastatals), such as the Tea Board of Kenya (TBK) and the Coffee Board of Kenya (CBK), provide regulatory and specialized services on behalf of th e Government.  There are also six development 
authorities under the Office of the Vice-President,  for "disadvantaged regions". Some of the 
institutions, largely dysfunctional in the past, have st arted to recover, while others (e.g. the Pyrethrum 
Board of Kenya) continue to perform commercial and regulatory roles, which is inconsistent with the 
government stated policy to withdraw from commercial activities. Some institutions have also been poorly managed at a cost that is transferred to farmers, thus affecting their revenue. In consequence, 
Kenya is to, inter alia : develop a single generic Agricultural Act to replace commodity-specific Acts; 
rationalize regulatory boards; empower farmers to  control the production and marketing of their 
produce; and limit the role of the Government to  regulation by privatizing or outsourcing its 
commercial activities, as provided for by the Privatization Act (Chapter III(4)(ii)).
114  
13. Kenya has 28 agricultural research agencies, gr ouped into: public-funded institutions (e.g. the 
Kenya Agricultural Research Institute (KARI)115, the Kenya Marine and Fisheries Research Institute 
(KEMFRI), and the Kenya Forestry Research Ins titute (KEFRI));  and commodity-funded institutions 
(e.g. Coffee Research Foundation (CRF), Tea Research Foundation (TRF), and Kenya Sugar 
Research Foundation (KESREF)). In addition, five in ternational research institutions are based in 
Kenya.116 Nevertheless, lack of prioritization of research activities leads to duplication and under-
utilization of the limited resources available. Moreover, research is financed mainly through donor support; domestic funding represents, on average, less than 0.01% of the annual government budget. 
The Government will increase, inter alia :  budgetary support for research to 5% of agricultural 
domestic product or 2% of overall GDP by 2009/ 10; and internal revenue from contracts, 
commercialization, and royalties so that by 2010 it will account for at least 20% of the budgets of 
 
Communications on information, communication, and technology; Trade and Industry on investment incentives; 
and Administration on public security. 
112 Overall funding to agriculture has fallen from 11%  of GDP in the 1980s to less than 4%.  The 
Government aims to increase the funding to agriculture gradually to 10% of GDP (Ministry of Agriculture, 2004). 
113 African Development Bank (2005).  
114 Parastatals performing similar or related activities will be merged. Once their commercial roles have 
been privatized, the Government will explore the possibility of merging them into one regulatory body (Ministry of Agriculture, 2004). 
115 KARI accounts for more than 60% in terms of budget allocation, and more than 80% in terms of 
manpower. 
116 The International Centre for Insect Physiology and Ecology (ICIPE), the International Livestock 
Research Institute (ILRI), the International Plant Genetic Research Institute (IPGRI), CAB International, and the World Agro-Forestry Centre. WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-76 
 
 
                                                      publicly funded institutions. A trust fund for strategic research and commercialization of technology 
will also be set up. Furthermore, KARI will be charged with promoting an integrated National 
Agricultural Research System (NARS). 
14. Efficient and effective agricultural extension services are considered to be among the most 
important tools for increasing agricultural productivit y in Kenya. Resources allocated to extension 
services declined from 5.9%, on average, of the Government's annual budget during the 1980s and 1990s to 1.7% in 2003/04, due to budgetary constr aints coupled with widespread misallocation of 
resources.  The extension system lacks adequate re sources, and the Government is to restructure it 
into an Agricultural Advisory Service (AAS), an d to improve the linkage between research and 
extension.
117 
15. Over-taxation is one of the main constraints fo r Kenya's agriculture. A wide range of taxes, 
levies, cesses, and fees charged on production, inpu ts, and services used by the sector, distort prices 
and make farmers uncompetitive in domestic and world markets.118 In addition, the multiplicity of 
taxes makes it difficult to administer them efficiently .  In order to remove taxes and encourage private 
investment, the Government intends to:  review all taxation laws and regulations  to rationalize taxes;  
explore the possibility of moving away from duties and levies on agriculture to taxing income;  introduce a land tax to discourage holding idle land for speculation;  and consider providing tax incentives for agri-industries set up in rural areas, including waiving taxes and levies on electricity. 
16. Access to bank credit is still a major problem for farmers, largely due to risks associated with 
farming, coupled with the limited use of land as collateral.119 The high cost of agricultural inputs, 
largely due to lack of competition, has also led farmers to substantially reduce their use of quality 
inputs, such as seed, fe rtilizer, and pesticides.120 To address these concerns, the Government has 
recapitalized and streamlined the management of the Agricultural Finance Corporation (AFC), and 
intends to, inter alia :  develop micro-finance institutions under a Micro-finance Act;  encourage 
commercial banks to set up operations in rural areas;   and revitalize public input organizations, such 
as the Agricultural Development Corporation (ADC ), and the Kenya Farmers Association (KFA). 
17. According to Kenya's latest notifications to the WTO Committee on Agriculture, it did not 
grant any export subsidies to agricultural products during 1995-97.121 In 1996/97, domestic support 
provided through general services, and public stockho lding for food security purposes and strategic 
reserve operations (Green Box measures) was estim ated by Kenya at K Sh 3,791 million, of which 
agricultural education represented 29.7%.122 
18. The average MFN tariff in agriculture (ISIC Rev.2 definition) is 17.3%, with rates ranging 
from zero to 75%.  Tariffs are particularly high on dairy products (38.5%), grains (28.3%), and 
 
117 This will include examining the feasibility of combining extension with research in a new and 
autonomous organization. 
118 Some taxes, such as the local government cess, create artificial barriers to the movement of goods, 
and encourages corruption (Ministry of Agriculture, 2004). 
119 Most farmers get credit mainly from non-governmental organizations and community-based lending 
institutions. The Agricultural Finance Corporation (AFC), a parastatal, and cooperative societies are no longer 
important sources of finance, largely because of  mismanagement (Ministry of Agriculture, 2004). 
120 The use of improved seeds in Kenya is rare, partly because of the monopoly on seeds supply by the 
Kenya Seed Company, which concentrates its operations  in high rainfall areas. Du e to the high cost of 
transportation and distribution systems, fertilizer use in  Kenya is about a quarter of the level in Indonesia 
(Ministry of Agriculture, 2004). 
121 WTO documents G/AG/N/KEN/1-3, 12 December 1997. 
122 WTO document G/AG/N/KEN/5, 2 March 1998. EAC-Kenya WT/TPR/S/171/KEN 
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 tobacco products (28.0%).  During the Urugua y Round, Kenya bound its tariffs on agricultural 
products (WTO definition) at a ceiling rate of 100%. 
19. Agricultural marketing boards and farmers are generally exempted from payment of income 
tax. Unprocessed agricultural products are exempt from VAT.  However, the presumptive income tax 
(PIT) was reinstated effective 1 January 2000 at its former rate of 2% on the gross sales price of 
selected agricultural products, such  as maize, wheat, barley, rice, sugar cane, pyrethrum flower, 
tobacco leaf, tea leaf, coffee, cashew s, pigs, cotton, hides, and skins.123 
20. Sanitary and phytosanitary regulations apply to imports and exports of agricultural products.  
Kenya's sanitary and phytosanitary measures are be ing harmonized at the EAC level. The introduction 
of, and research on, genetically modified organi sms are strictly regulated under the Science and 
Technology Act. Imports of seed for commercial purposes are subject to proof of the existence of sufficient demand on local markets. 
(iii) Selected products 
(a) Crops 
21. According to the authorities, achieving the SRA's objectives will depend heavily on:  reviving 
six crops (i.e. coffee, cotton, pyrethrum, cashew nuts, bixa124, and sugar cane);  improving 
performance of maize, tea, horticulture, wheat, potat oes, dairy and beef products, and oilseeds;  and 
introducing other high-value crops lik e palm oil, vanilla, and aloe ve ra. Time-bound targets will be set 
for each of these agricultural commodities.125  Kenya's total production of crops rose from 
K Sh 78,470 million in 2000 to K Sh 10 1,716 million in 2004 (Table IV.1). 
Table IV.1 
Production of crops at current prices, 2000-04 
(K Sh million) 
 2000 2001 2002 2003 2004a
Cereals      
  Maize 2,915.4 6,141.6 4,451.4 3,336.5 6,880.5 
  Wheat 1,132.9 1.429.4 987.5 1,375.3 1,864.0 
  Others 1,568.8 1,189.5 959.4 964.5 1,268.6 
  Total 5,617.1 8,760.5 6,398.3 5,676.3 10,013.1 
Horticultureb     
  Cut flowers 7,327.0 10,627.0 14,791.0 16,496.0 18,720.0 
  Vegetables 5,474.0 8,035.0 10,470.0 10,591.0 12,068.0 
  Fruits 1,089.0 1,560.0 1,461.0 1,753.0 1,803.0 
  Total 13,890.0 20,222.0 26,722.0 28,840.0 32,591.0 
Temporary industrial crops      
  Sugar-cane 7,942.2 7,154.8 9,070.2 7,567.3 8,389.8 
  Pyrethrum 729.3 769.1 1,271.5 781.9 305.7 
  Others 980.3 1,084.1 676.0 876.0 644.6 
  Total 10,528.6 9,0008.0 11,017.8 9,225.2 9,340.1 
Table IV.1 (cont'd) 
                                                      
123 The PIT is a final tax for individuals and a withholding tax for companies. It was introduced in 
1989, terminated in January 1994, reintroduced in Ju ly 1996, and suspended in 1999 (see WTO, 2000). 
124 Bixa contains some bixin, which is used as a natural food colour. 
125 Ministry of Agriculture (2004). WT/TPR/S/171/KEN  Trade Policy Review 
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  2000 2001 2002 2003 2004a
Permanent crops      
  Coffee 11,282.0 6,424.2 5,441.1 5,956.7 7,284.5 
  Tea 35,969.8 38,564.5 33,414.7 34,631.1 41,212.2 
  Sisal 809.9 956.9 938.2 1,060.7 1,275.4 
  Total 48,434.5 45,945.6 39,794.0 41,648.6 49,772.0 
Total crops 78,470.2 83,936.1 83,932.1 85,390.1 101,716.2 
a Provisional. 
b Data refer to horticulture exports only. 
Source:  Information provided by the Kenyan authorities.  
Food crops 
22. Maize and wheat are the principal food crops cu ltivated in Kenya. Maize provides nearly half 
of the calories and useable protein available to Ke nyans; it is the staple food. Therefore, for food 
security purposes, Kenya's agricultural policy emphasizes supply of maize. During 2000-04, the maize 
harvest averaged about 27 million bags per year.126 Domestic production of maize covers on average 
some 80% of local demand;  coverage falls to around 60% during drought years. Agri-climatic 
factors, traditional farming practices, and marketi ng and financing difficulties have hampered maize 
yields. 
23. Wheat is the second staple food, after maize;  wheat and wheat products are consumed mostly 
in urban areas. Wheat production increased from 73,800 tonnes in 2000 to 88,300 tonnes in 2004;  however, production has been consistently well be low domestic demand.  In 2004, 404,100 tonnes of 
wheat had to be imported to meet demand (i .e. domestic production covered 17.9% of local 
demand).
127 
24. The National Cereals and Produce Board (NCPB), a parastatal, has been restructured as a 
cereal trader and market stabilizer through famine relief and management of the National Strategic 
Food Reserve. The NCPB's marketing monopoly on cereals was abolished in December 1993.128 
However, the Government continues to publish dail y prices of food products across the major markets 
with a view to reducing the large price differentials recorded.  NCPB intervenes to help keep prices at 
reasonable levels;  nevertheless, producers are free to charge market prices. 
Cash crops 
25. Kenya's main cash crops are tea, horticulture, py rethrum, coffee, and sugar cane.  Kenya is 
the fourth largest tea producer in the world with 324,600 tonnes in 2004, up from 236,290 tonnes in 2000 (around 10% of the world's tea production), and the biggest exporter.
129 The area planted with 
tea is 136,700 ha, of which nearly two thirds be long to smallholders. Howe ver, commercial farmers 
produced 40.7% of Kenyan tea in 2004, with a yield per hectare substantially higher than that of 
smallholders (Table IV.2).  Nearly 95% of the production is exported: in 2004, tea accounted for 
around 17% of total earnings from merchandise exports  (Chapter I(3)(i)));  it is the leading export 
crop in terms of foreign exchange  earnings. About 10% of the labour force is employed directly or 
                                                      
126 Central Bureau of Statistics (2005). 
127 In recent years, wheat imports have been declining (Central Bureau of Statistics, 2005). 
128 The marketing of cereals, especially maize and wheat, was tightly regulated until 1993 (see 
WTO, 2000). 
129 Kenya prides itself as the producer of the best quality of black tea, being the world's largest exporter 
(Export Processing Zones Authority, 2005). EAC-Kenya WT/TPR/S/171/KEN 
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 indirectly by the tea industry. Over 80% of Ke nya tea is sold through dollar-based auctions in 
Mombasa.130  Major destinations include Pakistan, the United Kingdom, Egypt, and Afghanistan.  
The major constraint to tea production in Kenya is the limited processing capacity. 
Table IV.2 
Production and average yield of tea and coffee by type of grower, 2000-04 
 2000 2001 2002 2003 2004a
Tea      
Production ('000 tonnes)      
  Smallholders 145.55 181.72 175.90 180.79 192.55 
  Estates 90.74 112.90 111.20 112.88 132.05 
  Total 236.29 294.62 287.10 293.67 324.60 
Average yield (kg./ha.)      
  Smallholders 1,793 2,147 2,078 2,136 2,263 
  Estates 2,790 3,453 3,294 3,331 3,739 
Coffee      
Production ('000 tonnes)       
  Cooperatives 62.2 25.0 28.8 34.0 30.0 
  Estates 38.5 26.9 23.1 21.4 18.5 
  Total 100.7 51.9 51.9 55.4 48.4 
Average yield (kg./ha.)      
  Cooperatives 485.9 193.8 198.8 265.8 234.0 
  Estates 916.7 640.5 537.0 509.9 439.8 
a Provisional. 
Source:  Information provided by the Kenyan authorities.  
26. The main laws governing tea in Kenya are the Tea Act, Cap 343 (as amended by No. 6 of 
1999), and the Kenya Tea Development Authority Order.  The Tea Board of Kenya (TBK), 
established in 1950 under the Tea Act, regulates the i ndustry in all aspects of tea growing, research, 
manufacture, trade, promotion, and dissemination of information.  It also advises the Government on 
policy matters through the MoA. The Kenya Tea Development Authority (KTDA), established in 1964 as a parastatal, was privatized in June 2000. It  manages 53 tea smallholder factories. The Kenya 
Tea Growers Association (KTGA) was established as a trade union to lobby for better prices for tea 
farmers. Other organizations involved are: the Nyayo Tea Zones Development Corporation, a 
parastatal established to manage the tea belts ar ound the forest zones; the Tea Research Foundation of 
Kenya, the technical arm of TBK; and the Kenya Te a Packers (KETEPA), a parastatal that is still the 
leading packer in the country. 
27. Processing and packaging of tea for export are eligible for incentives under the Manufacturing 
Under Bond and Export Processing Zones programmes (Chapter III(3)(v)). Incentives are also available for investments in tea plantations, R&D, and to finance smallholde r farmers.  The import 
tariff on tea and tea products is 25% (up from 15% in 1999). 
28. Coffee's contribution to Kenya's earnings from merchandise exports declined from 10.4% in 
1999 to 3.5% in 2004, mainly as a result of uncerta inty of the outcome of a new Coffee Act, low 
world market prices131, and lack of credit. Coffee production fell from 100,700 tonnes in 2000 
                                                      
130 The auctions are conducted under the auspices of  the East African Tea Trade Association (EATTA), 
whose membership includes brokers, buyers, producer s, warehousemen, and packers. The remaining tea 
production is sold directly through private arrangements with international tea importers. 
131 The price of Kenyan coffee fell from K Sh 168/kg in 1999 to K Sh 107/kg in 2003 (Export 
Processing Zones Authority, 2005). WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      to 48,400 tonnes in 2004.132 Small-scale farmers organized into cooperatives produced 62% of the 
total, and large-scale farmers the rest (Table IV.2 ). Land area under coffee is estimated at 170,000 ha. 
Coffee is marketed through computerized aucti ons at the Nairobi Coffee Exchange, and recently 
through direct sales. Almost 99% of Kenyan coff ee is exported, mainly to Europe, particularly 
Germany and Sweden.  The import tariff is impos ed on coffee and coffee products is 25% (up from 
15% in 1999). 
29. The 2001 Coffee Act (as amended in 2005) provides the legal framework. It aims to further 
liberalize the subsector by allowing farmers more control of factories, an d added opportunities in 
processing and milling.  The Coffee Board of Kenya (CBK), set up in 1933, is the regulatory and 
marketing agent for all coffee produced in Kenya, and operates under the MoA.133  The CBK also 
issues and renews the various coffee licences (i.e . trading, milling, roasting, warehousing, and 
packaging);  it is composed of all relevant stak eholders, with government representation. The Kenya 
Planters Cooperative Union (KPCU) still dominates coffee milling.134  Other organizations involved 
in the industry are:  the Coffee Research Foundation (CRF), 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. 
30. Processing and packaging of coffee for e xport are eligible for incentives under the 
Manufacturing Under Bond and Export Processing Zon es programmes (Chapter III(3)(v)). Investment 
incentives are also available for:  processing of instant coffee;  growing of Robusta coffee to support 
the blending of Arabica coffee;  manufacture of coal from coffee husks;  R&D;  developing infrastructure in coffee producing areas; and to finance smallholder farmers. 
31. Horticulture is Kenya's third largest fore ign exchange earner, after tourism and tea.135 There 
are about 250,000 ha under horticulture, with annual production wort h more than US$600 million. It 
employs directly or indirectly about 2.5 million people, and is the fastest growing subsector in 
agriculture.136 Smallholder farmers grow over 60% of th e produce. In 2004, cut flowers accounted for 
almost 60% of Kenya's horticultural production. Only about 4% of horticultural production is 
exported:  the value of exports of fresh horticu ltural products more than doubled between 2000 and 
2004 (Table IV.3). Kenya is among the world's largest suppliers of cut flowers, which it exports 
mainly to Europe (particularly the Netherlands, France, Germany, and Switzerland) to meet off-
season demand.  
32. The subsector is regulated by the Horticu ltural Crops Development Authority (HCDA), a 
parastatal established in 1967 under the MoA.  The HCDA launched its Strategic Plan 2005-09, with 
the main aim of promoting the growth of the horticultural industry by addressing, inter alia :  the high 
freight costs, inadequate cargo space, high costs of  inputs, low productivity,  and financial dependence 
on export fees and levies. Moreover, strict adherence to food safety requirem ents, and environmental 
 
132 Arabica represents 99% of Kenya's coff ee production, and Robusta the remainder. 
133 The marketing monopoly of the CBK was abolished on 29 January 1999. CBK now exercises its 
marketing functions in competition w ith private operators (WTO, 2000). 
134 The Kenya Planters Co-operative Union (KPCU) lost its milling monopoly in December 1994. Five 
milling licences have been granted so far; the licensees  are competing with the KPCU (Export Processing Zones 
Authority, 2005). 
135 Kenya's horticultural produce co mprises fruit (mangoes, strawber ries, macadamia nuts, avocados, 
passion fruit, and pineapples) and vegetables (runner beans, snow and snap peas, baby corn, shelled peas, 
spinach, spring onions, aubergines, chilli, and okra) in  their fresh or processed form, and cut flowers. 
136 During the last three decades, hortic ulture is estimated to have grow n at an average annual rate of 
20% in terms of hectarage, production, and export earnings (HCDA, 2005). EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-81 
 
 
 issues such as maximum residue levels (MRLs), continue to threaten the subsector's performance 
particularly on the European markets.137 MFN tariffs on horticultural products average 10.4%, with 
rates ranging up to 25%. 
Table IV.3 
Exports of fresh horticultural producea, 2000-04 
 2000 2001 2002 2003 2004b
Volume ('000 tonnes) 99.2 98.9 121.1 133.2 166.1 
Value (K Sh billion) 13.9 20.2 26.7 28.8 32.6 
a Exports by the Horticultural Crop Development Authority (HCDA). 
b Provisional. 
Source:  Information provided by the Kenyan authorities.  
33. The land area under sugar cane is estimated at 123,622 ha., of which nearly 90% belongs to 
around 200,000 small-scale growers. An estimated 6 million Kenyans derive their sustenance directly 
or indirectly from sugar;  and the crop provides direct employment to over 40,000 workers. There are seven sugar factories, most still owned by the State.
138  By-products from the factories include 
molasses (mostly for alcohol production), baggase (for power generation), and filter press mart for fertilizer. Domestic production (517,000 tonnes) met 77% of the demand for sugar in 2004;  annual imports averaged about 170,000 tonnes during 2000-04. Sugar cane production rose from 3.9 million tonnes in 2000 to 4.7 million tonnes in 2004 (Table IV.4). 
Table IV.4 
Production and consumption of sugar, 2000-04 
('000 tonnes) 
 2000 2001 2002 2003 2004a
Production 402 377 494 448 517 
Consumption 619 630 652 663 670 
Imports 118 249 130 182 164 
Exports 2.1 3.6 12.1 11.3 11.6 
Sugar cane production 3,942 3,551 4,501 4,204 4,661 
Average yield (tonnes/ha) 60.5 63.7 70.7 69.2 73.8 
a Provisional. 
Source:  Information provided by the Kenyan authorities. 
34. The sugar industry in Kenya has become increasi ngly uncompetitive, with an average yield of 
68 tonnes/ha over 2000-04, well be low that of its competitors.139  In the context of COMESA, Kenya 
has been allowed to continue to apply non-pr eferential tariffs on sugar from other COMESA 
members, until 28 February 2008, to protect the local sugar industry.140 
35. Price controls have been removed.  Howeve r, the import tariff remains at 100%. The 2001 
Sugar Act provides the legal framework for licensi ng and registration of sugar mills, importers and 
                                                      
137 Central Bureau of Statistics (2005). 
138 In terms of installed capacity, the Government's share dropped to 70% after divesting 36% of 
Mumias Sugar Company (Ministry of Agriculture, 2005). 
139 Kenya's sugar yield record was 90 tonnes/ha in 1996-97. For the sugar industry to be profitable, an 
estimated yield of 100 tonnes/ha is needed (less than the 180 tonnes/ha average yield of Kenya's competitors) 
(Ministry of Agriculture, 2005). 
140 The average cost of sugar production in Kenya is 1.5-2 times that of the other COMESA members 
(Kilimo News  (2005), "Revitalizing the sugar industry", Nairobi). WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-82 
 
 
                                                      exporters, funding, the role of stakeholders, reve nue sharing between growers and millers, and dispute 
resolution.  Under the Act, the Kenya Sugar Boar d replaced the Kenya Sugar Authority (KSA) as the 
regulatory body, and the Kenya Sugar Research Foundation (KESREF) was established.141  In 
July 2005, Kenya unveiled its strategy for revitalizi ng the sugar industry before its safeguard expires. 
Some of the key measures envisaged are: review of the 2001 Sugar Act to facilitate the smooth 
operation of the subsector; appointment of the KSB as the agent of the Kenya Roads Board for 
development of infrastructure in the sugar zones; fi nancial restructuring and privatization of all state-
owned sugar companies; and appropriate tax incentives at all levels to attract new investment. 
36. The Sugar Development Fund (SDF) extends loans to the industry for factory rehabilitation, 
and cane development.142 It also provides grants for KSB and KESREF operations , and development 
of infrastructure.  The fund is financed through a 7% levy charged on the value of locally produced 
sugar and imports. Kenya Revenue Authority (KRA) collects the levy on behalf of the KSB.  The 
SDF has experienced loan recovery difficulties resulting in the accumulation of huge arrears by factories and farmers. The fund is also owed la rge sums by some factories in unremitted levy 
collection.  
(b) Livestock 
37. Livestock contributes about 10% to Kenya's GDP, accounts for over 30% of the farm-gate 
value of agricultural commodities, and employs over  50% of the agricultural labour force. Livestock 
exports include hides and skins, dairy products, live animals, and canned beef.143  Livestock numbers 
in Kenya are estimated at over 60 million, comprising 29 million chicken, 10 million beef cattle, 
3 million dairy and dairy crosses, 9 million goa ts, 7 million sheep, 800,000 camels, 520,000 donkeys, 
and 300,000 pigs.  Indigenous, exotic, and cross- breed animals are kept.  Emerging livestock farming 
in recent years includes the rearing of crocodiles, ostriches, quails, snakes, and frogs to supply the 
tourist industry and for export.144 
38. The ability of Kenya to fully exploit its pot ential in livestock production is seriously 
undermined by drought and diseases brought about by ticks and tsetse flies or spread through 
livestock movement, such as Foot and Mouth.  As a result, Kenya does not fill its livestock quotas under preferential treatment on the markets of devel oped countries.  The availability and quality of 
feedstuffs are also specific constraints to the development of livestock in Kenya. 
39. Milk factories are registered with the Kenya Dairy Board (KDB), the regulatory body. Milk 
production depends on ra in-fed agriculture and hence fluctuates, resulting in a surplus during the flush 
period from July to September. Only 14% of m ilk production is marketed through milk-processing 
establishments, while 56% is marketed raw. Kenya e xports dairy products to Europe, the Middle East, 
and Africa; long-life (UHT) milk is the leading export.145 Milk intake to the processing plants rose 
 
141 Other organizations involved in the industry are: the Kenya Sugar Manufacturers Association 
(KESMA), through which millers negotiate sugar-cane prices with growers; the Kenya Sugarcane Growers 
Association (KESGA), through which growers negotiate prices with millers; the Kenya Society of Sugarcane 
Technologists (KSSCT); and the Kenya National Sugarcane Growers and Employers Association (KNSGEA). 
142 The levy is used for: factory rehabilitation (3%); cane development (2%); infrastructure (1%); grants 
to research (0.5%); and KSB administration (0.5%) (Export Processing Zones Authority, 2005). 
143 UNCTAD and ICC (2005). 
144 Ministry of Agriculture (2004). 
145 UNCTAD and ICC (2005). EAC-Kenya WT/TPR/S/171/KEN 
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 from 137 million litres in 2000 to 274 million litres in 2004 (Table IV.5), due partly to the revival of 
Kenya Cooperative Creameries (KCC).146  
Table IV.5 
Production and sale of livestock and dairy products, 2000-04 
 2000 2001 2002 2003 2004a
Recorded milk production (million litres) 137 148 178 203 274 
Milk processed      
  Whole-milk and cream (million litres) 60 97 128 131 161 
  Butter and ghee (tonnes) 113 130 177 215 191 
  Cheese (tonnes) 315 329 48 361 328 
Livestock slaughtered ('000 head)      
  Cattle and calves 2,870 1,952 1,854 1,669 1,641 
  Sheep and goats 4,572 4,671 4,765 4,289 3,851 
  Pigs 189 214 167 175 172 
a Provisional. 
Source:  Information provided by the Kenyan authorities. 
40. The total number of livestock slaughtered declined over 2000-04. Favourable weather 
conditions that resulted in enough water and improved pasture have  led to fewer animals being 
disposed of by farmers. The Kenya Meat Commissi on (KMC) is being restructured to assist in the 
marketing of livestock and has organized the beef market. KMC has facilities that slaughter, process, 
and package meat and meat products.  It has the capacity to receive, hold, slaughter, and store the 
meat from about 600-800 cattle per day.  This capac ity to handle large numbers of slaughter livestock 
enables KMC to assist in the Animal Disease Cont rol programmes, and duri ng periods of drought. 
41. Export taxes apply to hides and skins (Chapter III(3)(ii)). 
42. The average tariff on imports of live animals is  18.5%, while the average is 25% on meat and 
edible offal, and 38.5% on dairy products average. 
(c) Fisheries 
43. The fisheries industry employs over 60,000 people directly, with an additional 5,000 
indirectly dependent on the industry. There are 25 fish-processing factories in Kenya, with a total 
annual processing capacity of 25,000 tonnes.147  Overfishing, pollution, inadequate fishing practices 
and equipment, invasion of Lake Victoria by wa ter hyacinth, and lack of capital and appropriate 
storage facilities have contributed to a continuous downward trend in the total fish catch over the 
years. Indeed, fish landed from freshwater decreased from 197,876 tonnes in 2000 to 127,696 tonnes 
in 2004, while marine fish, crustaceans an other marine products went  from 4,763 tonnes to 
7,882 tonnes during the same period (Table IV.6).  
44. The bulk of the catch is sold (after transfor mation into dried and salted fish) on the domestic 
market, confined to the coastal region and certa in metropolitan areas of Nairobi.  The remainder 
                                                      
146 KCC, established under the Ministry of Cooperative Development, operated under monopoly until 
the liberalization of the milk market (sales, purchase s, processing) in May 1992. However, KCC is still the 
major player due to its country-wide network established fo r the marketing of its products: it still sets producer 
prices for milk. 
147 UNCTAD and ICC (2005). WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-84 
 
 
 (some 7% of the catch) is exported to Europe, the Middle East, and Asia.  Exports consist mostly of 
marine products, especially lates niloticus . 
Table IV.6 
Fish production, 2000-04 
(Tonnes and K Sh'000) 
 2000 2001 2002 2003 2004a
Quantities Tonnes 
Freshwater fish      
  Lake Victoria 192,738 151,804 114,812 105,866 110,357 
  Lake Turkana 2,108 3,787 4,004 4,047 4,180 
  Lake Naivasha 384 5 95 39 64 
  Lake Baringo 463 117 0 0 0 
  Lake Jipe 54 65 78 73 76 
  Tana river dams 364 232 569 474 593 
  Fish farming 967 998 962 1,012 989 
  Other areas 798 802 846 1,176 901 
  Total 197,876 157,810 121,366 112,687 117,160 
Marine fish 3,779 5,141 5,570 5,819 5,943 
Crustaceans 777 1,033 939 756 867 
Other marine products 207 277 352 393 382 
Total 202,639 164,261 128,227 119,655 124,352 
Value K Sh'000 
Freshwater fish 7,679,570 7,453,079 7,159,158 6,468,618 7,034,129 
Marine fish 185,655 244,607 265,805 286,116 290,987 
Crustaceans 80,618 198,557 213,443 176,347 189,658 
Other marine products 17,925 21,936 26,091 24,963 224,751 
Total 7,963,768 7,918,179 7,664,497 6,956,044 7,539,525 
a Provisional. 
Source:  Information provided by the Kenyan authorities. 
45. The inland fish prices are set by the market, wh ile at the coast, minimum producer prices are 
set and reviewed annually by a committee compri sing the representatives of the Government (the 
Department of Fisheries), the fishermen's coope ratives ("coastal" fishers are organized into 
cooperatives), and the buyers.  The price control aims to guarantee a minimum revenue to coastal 
communities to which fishing is a traditional activity and the major source of income. 
46. The Government has continued its efforts to  conserve and monitor the exploitation of 
fisheries, through better enforcement of the fi shing regulations, especially in establishing and 
enforcing the closed fishing seasons.  The Governme nt also introduced the Beach Management Units, 
which involves the fishing communities in the ma nagement, conservation, and decision-making 
process. In addition, the SRA envisages promoting fi sh farming, with a stakeholder-led fisheries 
development apex body to be established to regulate the fish industry. 
47. Imports of fish and fish products are subject to  an average tariff of 25%. An export tax of 
0.5% applies to all species (Chapter III(3)(ii)).  
48. Foreign investment in fishing activities in Ke nya is restricted to 49% (Chapter II(4)). 
(d) Forestry 
49. Forest plantations covered 132,300 ha in 2004 (down from 147,200 ha in 2000). Exotic trees 
account for 74.6% of the plantation area, followed by fuel wood and poles (16.1%), and indigenous EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-85 
 
 
 trees (9.3%). Sales of forest products, mostly soft  wood, fluctuated over 2000-04, with no sales of 
hard woods and telegraph poles in the earlier years (Table IV.7).  Timber is mainly exported to the 
Middle East. The low recovery rate further increase s the already high production cost of the sawmills. 
MFN tariffs on forestry products average 4.4%, with rates ranging up to 10%. 
Table IV.7 
Forest products, 2000-04 
 2000 2001 2002 2003 2004a
Area ('000 hectares)  147.2 120.0 121.0 125.1 132.3 
  Indigenous trees 4.5 2.8 1.4 4.5 4.5 
  Exotic trees 7.8 7.7 13.0 7.8 7.8 
  Fuel wood and poles 18.3 18.3 19.3 30.3 21.3 
Recorded sales      
  Timber ('000 true m3) 216.8 197.2 162.0 243.2 213.0 
    Softwood 216.8 197.2 162.0 233.2 213.0 
    Hardwood 0.0 0.0 0.0 9.9 1.0 
  Other ('000 stacked m3) 1.3 48.8 67.0 16.6 27.7 
    Fuelwood/charcoal 0.8 45.5 67.0 14.6 18.1 
    Power and telegraph poles 0.5 3.3 0.0 2.0 9.6 
a Provisional. 
Source:  Information provided by the Kenyan authorities.  
50. Under the SRA, a new Kenya Forestry Master Plan  is being drafted by the agricultural-related 
ministries and is to supersede the Kenya Forestry Master Plan 1995-20.148 The main aim of the new 
plan is to address the uncontrolled deforestation and excision of land, and to protect rare, threatened, and endangered species of trees and animals. The po licy, legal, and institutional framework for 
forestry is to be streamlined, and degraded forest areas are to be rehabilitated.  Moreover, modalities are to be developed to facilitate the participation of local communities in fo rest resource management, 
and farmers are to be encouraged to grow trees as  an additional source of income, while contributing 
to conserving the environment.  The Forest Depa rtment, which is responsible for forestry policy 
formulation and implementation, is to provide seed s for quick-maturing tree species, at affordable 
prices, to community-based tree nursery owners, roadside operators, and individual farmers. 
51. Exploitation of indigenous timber is banned and exports of roundwood are prohibited.  An 
export tax is collected on timber. 
(3) MINING , QUARRYING , AND ENERGY  
(i) Mining and quarrying 
52. The mining and quarrying sector accounts for about 0.6% of Kenya's real GDP (0.4% in 
1999).  Mining activities centre around soda ash, whic h is produced mostly at Lake Magadi, and 
crushed refined soda. The total value of mineral production rose from K Sh 3.6 billion in 2000 to 
K Sh 5.3 billion in 2004 (Table IV.8), due partly  to increases in the export prices of soda ash and 
fluorspar.  Kenya also produces salt, and limestone , and other products such as gold and gemstones 
(e.g. ruby and garnet) are mined in limited quantities.   Some titanium deposits are located in the Coast 
                                                      
148 The Kenya Forestry Master Plan 1995-20 was formulated in 1994 to address, inter alia :  
conservation of biodiversity; forest management; rationali zation of the forest industry;  protection of forest 
against pests, diseases, and fires;  capacity building in the forest branch;  and international agreements. For 
details of the Plan, see WTO (2000). WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-86 
 
 
 Province.  Part of the production of soda ash, li mestone, natural carbon dioxide, gypsum, and lead are 
consumed as inputs by local industries. 
Table IV.8 
Mineral production, 2000-04 
(Million tonnes and K Sh million) 
2000 2001 2002 2003 2004a
Mineral 
Q V Q V Q V Q V Q V 
Soda ash 238,190 1,955,500b297,780 2,716,000b304,110 2,729,113b352,560 3,100,169b353,835 3,462,707b
Fluorspar 100,102 627,860b118,850 727,000b85,015 632,829b80,201 503,630b117,986 999,129b
Salt 16,359 51,740 5,664 99,000 18,848 61,388 21,199 61,105 31,139 124,450 
Crushed 
refined soda 382,556 42,200 207,647 22,906 474,014 38,252 576,146 46,494 605,948 51,473 
Other 8,323 933,380 6,087 1,189,440 5,668 1,273,641 4,971 1,353,253 6,315 667,854 
Total 745,530 3,610,680 636,028 4,754,346 887,655 4,735,223 1,035,077 5,064,651 1,115,223 5,305,613 
a Provisional. 
b Including export value. 
Note: Q: quantity. 
 V: value. 
Source:  Information provided by the Kenyan authorities.  
53. Minerals contributed around 4% to Kenya' s earnings from merchandise exports in 2004 (up 
from 2.5% in 1999), of which soda ash accounts for more than half.  The major destinations are the 
United States, Japan, Germany, and Luxembourg for fluorspar;  Switzerland, South Africa, and the 
United Arab Emirates for gold; Switzerland and Indi a for rubies;  and Thailand, India, the United 
States, and Germany for garnets. 
54. All unextracted minerals are vested in the Stat e and subject to rights granted by a relevant 
authority in accordance with Section 4 of the 1940 Mining Act (as amended).  Mineral oils are not 
covered by the Act.  In general, mining licen ces are issued by the Commissioner of Mines and 
Geology against the payment of fees (Table IV.9). Licences are valid for one year (until 31 December 
of the year of issue), renewable. Prospecting activ ities are carried out mostly by foreign companies, 
and exploitation by enterprises owned by Kenyans.  A lease on the land where the mineral is located 
may be granted for five to twenty-one years maxi mum. Mineral dealers (sellers, buyers, exporters, 
cutters, polishers) must hold a licence issued by the Commissioner of Mines and Geology.  
55. The Congress is discussing the draft of a new mining law. The aim is to develop a 
comprehensive policy framework for regulating the subsector, and facilitating mining exploration and 
exploitation.  A new mining licensing system is to be introduced to provide for, inter alia , simplified 
and harmonized licensing of mining op erations, and greater security of tenure for mining investors. 
The future law is also expected to provide for greater environmental protection, restoration and 
rehabilitation of mined-out areas, and cushioning lo cal communities against the adverse effects of 
mining.  The private sector is to be the vehicle for minerals deve lopment, and government 
intervention is to be limited to promotion and regulatory functions.149   
56. MFN customs tariffs average 5.3% in mining and quarrying (major division 2 of ISIC, 
Revision 2), and range from zero on, inter alia , sulphur, natural graphite, na tural sands, and quartz, to 
25% on salt, asbestos, natural gas, and diamonds. Impor ts of petroleum oils and crude oils obtained 
from bituminous minerals are duty free. 
                                                      
149 Central Bureau of Statistics (2005). EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-87 
 
 
 Table IV.9 
Mining licences, 2006 
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 is 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 is 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/sq. km, 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/sq. km, 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.   WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-88 
 
 
 (ii) Energy 
57. Kenya's total energy consumption amounted to 2,840 toe (thousand tonnes of oil equivalent) 
in 2004 (up from 2,700 toe in 2000). Liquid fuels, in cluding imported crude oil, accounted for 83.6% 
of total energy consumption in 2004, while hydro and geothermal energy represented 12.6%. Local 
energy production as a percentage of the total rose from 6.2% to 12.1% during 2000-04. Per capita 
consumption of energy averaged 85.5 kg of oil equivalent over the same period (Table IV.10). 
Table IV.10 
Production, trade, and consumption of energya, 2000-04 
('000 tonnes of oil equivalent) 
 2000 2001 2002 2003 2004b
Coal and coke consumption 66.1 66.1 98.6 92.4 108.0 
  Imports of crude oil 2,452.3 1,965.6 1,493.4 1,382.6 2,043.8 
  Net exports of petroleum 336.7 657.9 755.5 1,752.8 1,375.4 
  Stock changes and balancing items  -340.9 -238.3 57.0 -1,006.7 -1,044.7 
Total consumption of liquid fuels 2,448.1 2,385.2 2,305.9 2,128.7 2,374.5 
Hydro and geothermal energy      
  Local production of hydro power 135.3 155.1 243.6 278.9 258.6 
  Local production of geothermal power 31.6 39.2 38.5 42.9 84.8 
  Imports of hydro power 19.0 9.8 20.5 16.3 13.9 
Total consumption of hydro and geot hermal energy 185.9 204.1 302.6 338.1 357.3 
Total local energy production 166.9 194.3 282.1 321.8 343.4 
Total net imports 2,200.7 1,383.6 857.0 -328.6 674.0 
Total energy consumption 2,700.1 2,655.4 2,707.1 2,559.2 2,839.8 
Local production (percentage of total) 6.2 7.3 10.4 12.6 12.1 
Per capita consumption (kg of oil equivalent)c89.4 86.2 85.9 79.5 86.6 
a Modern sector only;  fuelwood and charcoal are excluded. 
b Provisional. 
c Revised series. 
Source: Information provided by the Kenyan authorities. 
58. The Ministry of Energy is responsible for, inter alia : energy policy and development; 
hydropower and geothermal exploration and de velopment; thermal power development; petroleum 
products, including import/export marketing policy;  renewable energy development; security and 
conservation; fossil fuel exploration and development; administration of the Rural Electrification 
Scheme; and supervision of state-ow ned energy-related companies.   
59. The Ministry of Energy has prepared the National Energy Policy for the period 2004-23, 
aimed at developing a reliable and self-sufficient en ergy system that can provide equitable access to 
quality energy services throughout Kenya by, inter alia , exploiting the country's hydropower 
potential, enhancing the transmission and distribution systems, attracting private investors, lowering costs of production, and increasing exploitation of  indigenous resources, while protecting the 
environment. To do so, a more investor-friendly fiscal , regulatory, and legal regime for the subsector 
is to be established.
150 
(a) Electricity 
60. Electricity is second to petroleum fuels as a s ource of energy in Kenya. Installed capacity 
increased from 1,160 MW in 2000 to 1,198 MW in  2004, while total electricity generated rose 
                                                      
150 Central Bureau of Statistics (2004). EAC-Kenya WT/TPR/S/171/KEN 
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 from 4,179 GWh to 5,195 GWh.  Over 60% of pow er generation in Kenya is supplied through 
hydropower systems, followed by thermal oil, ge othermal and wind plants (Table IV.11). Kenya's 
electricity grid is connected to Uganda. Electricity  supply in Kenya is being improved through several 
investment projects.151  
Table IV.11 
Installed capacity and generation of electricity, 2000-04 
 Installed capacity (MW)aGeneration (GWh)b
 Thermal oil 
 Hydro Thermal 
oil Geo-
thermal Total Hydro 
KenGen IPP Total Geo-
thermal Wind Total 
2000 674.5 427.9 58.0 1,160.4 1,793.8 1,201.1 816.7 2,017.8 367.1 0.2 4,178.9 
2001 677.2 407.0 58.0 1,142.2 2,031.0 652.6 1,312.8 1,965.4 455.6 0.1 4,452.1 
2002 677.2 407.0 58.0 1,142.2 3,070.9 279.8 887.5 1,167.3 447.2 0.4 4,685.8 
2003 677.2 407.0 58.0 1,142.2 3,432.8 345.3 574.7 920.0 4998.4 0.4 4,851.6 
2004 677.3 392.8 128.0 1,198.1 3,169.2 416.4 621.8 1,038.3 986.6 0.4 5,194.5 
a 1 megawatt = million watts = 1,000 kilowatts. 
b Gigawatt hour = 1,000,000 kilowatt hour. 
Note: IPP = independent power producer.   
Source:  Information provided by the Kenyan authorities. 
61. Demand for electricity increased from 3,321 m illion kWh in 2000 (year of a severe drought) 
to 4,234 kWh in 2004. The lowering of electricity tariffs over the period partly contributed to this 
increase in demand. Consumption by large and medium-sized commercial industries accounts for 
61% of total electricity demand, followed by dom estic and small-scale commercial industries. Rural 
electrification represents only 3.7% of  Kenya's total electricity demand. 
62. Under the Electric Power Act of 1997, the sub sector was reformed, with the separation of 
generation from transmission and di stribution. Transmission and distribution are still monopolies, 
while generation has been liberalized. Besides the Ministry of Energy, there are four key players in the subsector: the partly state-owned Kenya Powe r and Lighting Company (KPLC), responsible for 
transmission and distribution (under monopoly) of electricity
152;  the Electricity Regulatory Board 
(ERB); the state-owned Kenya Electricity Generating Company (KenGen), which manages and 
develops all public po wer generation facilities153, and sells electricity to KPLC; and independent 
power producers (IPPs), which have been licensed to  build, own, and operate power stations, and sell 
electricity to KPLC.154 
63. Section 121(1) of the Electric Power Act 1997 empowers the ERB to:  set, review and adjust 
tariffs for all persons who transmit or distribute electrical energy for sale; investigate tariff structure even when no specific application for a tariff adjustment has been made; and approve electric power 
                                                      
151 These include: the Matasia and Cianda distribution substations; Olkaria II geothermal station was 
put in place in 2004; the Kenya Elect ricity Generating Company (KenGen) Sondu Miriu hydro-power station; 
the Nairobi North line feed-outs, the Nakuru-Nyahururu interconnection project. Coal plants are also being 
developed (Central Bureau of Statistics, 2005). 
152 The Government intends to reduce its direct equity in KPLC from 51% to below 39% in the near 
future (UNCTAD and ICC, 2005). 
153 KenGen generates about 80% of Kenya's electric ity (KenGen online information.  Available at: 
www.kengen.co.ke/energy_sector.asp). 
154  The IPPs (i.e. Iberafrica Power, Westmont Power, Orpower, and Tsavo Power Company) 
accounted for about 20% of Kenya's electricity in 2004 (K PLC online information.  Available at: 
www.kplc.co.ke). Westmont Power closed in 2005. WT/TPR/S/171/KEN  Trade Policy Review 
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 purchase contracts, and transmission and distribu tion service contracts between and among electric 
power producers, public electricity suppliers, and la rge retail customers.  The ERB sets retail tariffs 
and approves bulk tariffs. Retail tariffs are cost-refl ective, while bulk tariffs are negotiated between 
the generator and the off-taker.  Electricity tariffs are lower for industries than for households.  Within 
household, users tariffs are lower for low consumers than for high consumers;  within industries there 
is no such differentiation. ERB also enforces en vironmental and safety regulations related to 
electricity generation and supply. 
(b) Petroleum and gas 
64. Kenya is a net importer of petroleum and gas, the main source of energy in the country.  The 
level of net imports of petroleum products  increased from K Sh 53.7 billion in 2000 to 
K Sh 87.8 billion in 2004, largely as a result of the jump in international oil prices.  Demand for light 
diesel has increased due partly to reforms in the transport industry, which resulted in more diesel-
consuming vehicles (Table IV.12).155 
Table IV.12 
Petroleum supply and demand, 2000-04 
('000 tonnes) 
 2000 2001 2002 2003 2004a
Demand      
  Liquefied petroleum gas 33.4 35.6 40.5 40.9 41.7 
  Motor spirit (premium and regular) 365.7 374.3 365.8 327.0 326.4 
  Aviation spirit 2.2 2.4 1.8 1.5 1.8 
  Jet/turbo fuel 432.2 417.3 470.2 487.3 521.1 
  Illuminating kerosene 383.7 306.1 273.6 190.0 236.1 
  Light diesel oil 712.8 663.7 627.3 649.6 789.4 
  Heavy diesel oil 28.1 27.7 28.0 24.4 25.2 
  Fuel oil 490.0 558.1 498.7 407.0 432.8 
  Total 2,448.1 2,385.2 2,305.9 2,128.7 2,374.5 
Refinery usage 96.3 81.3 77.4 64.4 80.6 
Total domestic demand 2,544.4 2,466.5 2,383.3 2,193.1 2,455.2 
Export of petroleum fuels 441.9 469.1 190.6 2.2 35.6 
  Total demandb2,986.3 2,935.6 2,573.9 2,192.3 2,490.8 
Supply      
  Imports      
    Crude oil 2,452.3 1,965.6 1,493.4 1,382.6 2,043.8 
    Petroleum fuels 874.9 1,208.3 1,023.5 1,819.4 1,491.7 
    Total 3,327.2 3,173.9 2,516.9 3,202.0 3,535.5 
Adjustmentc-340.9 -238.3 57.0 1,006.7 1,044.7 
  Total supplyb2,986.3 2,935.6 2,573.9 2,195.3 2,490.8 
a Provisional. 
b Difference is due to rounding. 
c Adjustment for inventory changes and losses in production. 
Source:  Information provided by the Kenyan authorities.  
65. Kenya has no known oil or gas reserves; the Government is encouraging foreign investment 
in oil exploration.156  Oil exploration is governed by the Petroleum Exploration and Production Act, 
which includes production sharing agreements (P SAs). Kenya requires no signature bonuses or tax 
payments, as corporate taxes are payable to the Gove rnment through its "take". Foreign investors have 
                                                      
155 Central Bureau of Statistics (2005). 
156 Since exploration started in 1954, 30 wells have been drilled in four sedimentary basins (Anza, 
Mandera, Tertiary Rift, and Lamu), wh ere Kenya's petroleum potential lies. Ke nya's Indian Ocean coast has also 
been flagged as a potential area (UNCTAD and ICC, 2005). EAC-Kenya WT/TPR/S/171/KEN 
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                                                      shown interest in frontier exploration acreage opportu nities. The Government may elect to participate 
in any development area up to a maximum of 10% (negotiable).157 
66. Petroleum and gas are dominated by four companies: the state-owned National Oil 
Corporation of Kenya (NOCK), incorporated in April 1981 under the Companies Act, performs both 
upstream (oil exploration) and downs tream (sales and marketing of fuels and lubricants) activities; the 
Kenya Petroleum Refineries Limited (KPRL), 50% ow ned by the State and 50% by three shippers 
(i.e. Shell, British Petroleum, and Caltex); the Kenya Pipeline Company (KPC); and the Kenya 
Railways Corporation (KRC). The KPC and KRC are state-owned, and together with private transporters are involved in transportation of petroleum products from Mombasa to other parts of the 
country, as well as neighbouring countries. 
67. In October 1994, the procurement, distributi on, and pricing of petroleum products were 
liberalized, under the Petroleum Act, with a view to enhancing operational efficiency of the industry, 
and attracting private capital.158  Oil marketers are allowed to import products directly or buy from 
KPRL; the "white oil rule" was eliminated; NOCK' s mandate to supply 30% of Kenya's crude oil 
requirements was abolished; consumer prices of petroleum fuels were liberalized, and market competition enhanced;  KPC's monopoly for transporta tion of motor gasoline, kerosene, and gas oil 
was abolished;  oil marketers became free to negotia te transport tariffs and mode of transport; and a 
2% suspended duty was introduced on all imported re fined products.  As a result, new companies 
have been licensed to engage in petroleum tradi ng, especially import and export, wholesale, and retail 
of petroleum products. However, only about ten new entrants are actively trading with about 10% 
share of the market.
159  
68. The petroleum and gas subsector is govern ed through licences under various Acts of 
Parliament enforced by various mi nistries/departments.  It has been suggested that the Government 
harmonize these Acts, establish a one-stop-shop for pe troleum licensing, and establish an inspectorate 
to enforce compliance with petroleum regulations.160 
(4) MANUFACTURING  
69. Kenya's manufacturing sector accounted for 9.9% of real GDP in 2004 (down from 10.3% in 
2000), which makes it the most industrialized count ry in East Africa.  Manufacture of food, 
beverages, and tobacco contribut ed 3.7% to Kenya's GDP in 2004.  Over 20% of earnings from 
merchandise exports come from manufacturing (C hapter I(3)(i))).  The sector employed about 
242,000 persons in 2004 (216, 000 in 1998), more than half of these were in the textiles and apparel 
industry. Manufacturing takes place in the three principal cities (Nairobi, Mombasa, and Kisumu). 
 
157 Promotional efforts have generated new interest in the offshore Lamu basin, and resulted in the 
signing of seven PSAs. On the onshore basin, all 13 blocks are currently available for leasing, as is one block 
offshore (UNCTAD and ICC, 2005). 
158 Before liberalization, seven companies were involved in oil importation and marketing of petroleum 
products. The same companies currently control over 75% of the domestic petroleum distribution and retail market (Institute of Policy Analysis and Research, 2002). 
159 New entrants are required to process crude oil at the Mombasa refinery within one year of 
registration. This condition has been very difficult to meet due to the high costs of importing crude oil. A study recommends that new entrants be given more time before  they are required to process oil (Institute of Policy 
Analysis and Research, 2002). 
160 Institute of Policy Analysis and Research (2002). WT/TPR/S/171/KEN  Trade Policy Review 
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 70. The index of real output in manufacturing rose by 6.1% during 2000-04 (Table IV.13). With 
the exception of bakery products, tobacco, wood a nd cork products, clay and glass products, and 
miscellaneous manufactures, most subsectors register ed increases over the period.  Tyres, tubes, 
batteries, springs, radiators, brake pads, cables,  rubber components and filters are now produced 
locally, and a  number of firms fabricate bodies for commercial vehicles.161 The informal sector also 
produces consumer goods, motor vehicle parts, and farming implements.  
Table IV.13 
Manufacturing production index, 2000-04 
(1976 = 100) 
Industry 2000 2001 2002a2003a2004b
Meat and dairy products 85.9 86.1 85.4 89.8 99.2 
Canned vegetables, fish, oils, and fats 391.8 423.3 397.0 405.3 416.9 
Grain mills products 157.6 143.1 174.4 177.7 188.4 
Bakery products 295.5 299.9 290.8 284.3 277.9 
Sugar and confectionery  206.1 195.2 238.6 218.9 251.1 
Miscellaneous foods 246.4 262.3 240.2 250.8 268.6 
Food manufacturing 199.4 200.8 210.9 211.1 231.1 
Beverages  166.4 157.9 164.9 176.0 201.1 
Tobacco  160.2 155.9 123.5 126.7 142.6 
Beverages and tobacco 166.1 158.2 160.2 170.3 194.2 
Textiles 115.5 114.7 120.4 106.0 94.9 
Clothing 167.2 172.8 178.4 188.1 176.8 
Leather and footwear 54.6 59.5 81.6 99.0 81.8 
Wood and cork products 75.1 71.7 59.7 51.2 45.7 
Furniture and fixtures 56.1 57.0 56.9 55.1 56.9 
Paper and paper products  258.5 263.3 270.2 362.7 332.7 
Printing and publishing 424.5 424.5 436.5 428.0 429.7 
Basic industrial chemicals 140.6 147.1 128.7 145.8 141.5 
Petroleum and other chemicals 659.4 741.8 687.5 865.7 812.0 
Rubber products 588.1 581.1 671.3 712.8 775.4 
Plastic products 781.8 837.0 896.1 969.3 997.5 
Clay and glass products 1,191.7 1,052.4 1,206.9 1,142.7 1,138.4 
Non-metallic mineral produc ts 153.8 131.6 147.0 190.0 197.4 
Metallic products  238.1 237.7 241.5 238.2 253.9 
Non-electrical machinery 86.1 85.9 86.2 87.1 88.4 
Electrical equipment 188.7 199.4 205.8 216.8 256.2 
Transport equipment  241.5 121.6 480.7 483.5 1,109.6 
Miscellaneous manufactures 1,149.6 1,190.9 1,170.7 1,148.2 1,067.7 
Total manufacturing 281.4 283.1 286.5 290.6 298.5 
a Revised. 
b Provisional. 
Source:  Information provided by the Kenyan authorities. 
71. Factors that have hampered the development of Kenya's manufacturing sector include the 
weakness of infrastructure (shortfalls in power and water supplies, telecommunication, roads and rail, 
and port facilities);  high interest rates;  the lack of industrial space;  inadequate managerial, technical, 
and entrepreneurial skills;  weak links between research institutions and manufacturers, i.e. between 
suppliers and users of research;  underdeveloped legal information cu lture and the continued existence 
of irrelevant, outmoded, and anti-market laws  and regulations;  and unpredictable and wide 
discretionary powers of administra tors of laws and regulations.162 
                                                      
161 General Motors East Africa, for example, has a supply chain development programme, and buys 
local supplies worth close to US$20 million (UNCTAD and ICC, 2005). 
162 UNCTAD and ICC (2005). EAC-Kenya WT/TPR/S/171/KEN 
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                                                      72. The Ministry of Trade and Industry (MTI) is r esponsible for the overall running of the sector. 
In addition, several bodies have been establishe d to strengthen the institutional framework for 
manufacturing activities (e.g. the Kenya Investment  Authority (KIA), the Export Promotion Council 
(EPC), the Export Promotion Programme Office (EPPO), the Export Processing Zone Authority 
(EPZA) and the Kenya Anti-Corruption Authority (KACA)).  However, the impediments to the 
development of the sector (listed above) have not so far been properly addressed, and Kenya's 
manufacturing remains inward-looking;  a large share of production is destined for the domestic and 
regional markets (e.g. beverages, cement, textiles and clothing are exported mainly to Tanzania and 
Uganda). 
73. Value added in manufacturing is relatively low.  There is little domestic production of 
intermediate and capital goods, and the sector relies heavily on their import. In 1997, the Government formulated a two-phase industrial policy designed, inter alia , to accelerate economic growth on a 
sustainable basis, increase value added, generate  employment, and increase exports of local resources 
after transformation.
163  The first phase of the industrialization strategy – covering the period 1997-06 
– emphasizes processing industries in which Kenya has operational and technological capabilities. 
Kenya is promoting the expansion and modernizati on of existing industries and seeking to attract new 
investment in light manufacturing and resource-based activities.  In this regard, certain micro, small 
and medium-scale industries that utilize and add valu e to local raw materials, and require relatively 
modest capital investment have been identified.164  Phase-one will provide the foundation for phase-
two.  The second phase of the strategy is to build  on the achievements of phase-one: capital-intensive 
manufacturing industries requiring high capital i nvestment, well developed technologies, skilled 
labour, and support infrastructure are to be promoted. 
74. An industrial development levy, introduced by mid-1998 to finance the activities of KIA, 
EPC, and EPZA, has been eliminated. As part of th e industrialization strategy , the National Industrial 
Development Council (NIDC) was envisaged but was never established. 
75. Various investment incentives are available to the manufacturing sector (Chapter II(4)). 
Manufacturing industries are also eligible for the export processing zones, the manufacturing-under-bond programme, and the duty remission scheme (Chapt er III(3)(v)). Moreover, some manufacturing 
industries (e.g. motor vehicle body building, fabrication of industrial equipment and parts, textiles, plastic products, aluminium kitchenw are, mineral waters, and chemical s) have received credit from: 
Industrial Development Bank (IDB)
165, Development Bank of Kenya (DBK), Kenya Industrial Estates 
(KIE)166, and Industrial and Commercial Development Corporation (ICDC).167 The Export Promotion 
Council (EPC) promotes Kenya's manufacturing exports , such as textiles and clothing and commercial 
crafts (Chapter III(3)(vi)). 
 
163 The Government expected the strate gy to contribute to an increase in  the annual growth rate of the 
manufacturing sector to nearly 8% by 2001, and to 15% by 2020. The share of manufacturing in real GDP was 
projected to reach 18% in  2001.  See WTO (2000). 
164 See WTO (2000). 
165 IDB, established under the MTI in January 1973, with World Bank support, provides medium- and 
long-term finance to medium and large industrial companies (IDB online information.  Available at: 
http://www.yellowpageskenya.com/idb/Background.asp). 
166 KIE, under the MTI, offers technical services an d provides finance to local and small entrepreneurs 
(MTI online information.  Available at: http:// www.tradeandindustry.go.k e/section.asp?ID=33). 
167 ICDC, under the MTI, assists in the expansion and development of new and existing medium sized 
private sector industrial and commercial enterprises in Kenya (MTI online information.  Available at: 
http://www.tradeandindustry.go.ke/section.asp?ID=53). WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      76. MFN customs tariffs on manufactured goods (major division 3 of ISIC, Revision 2) average 
12.7%, with rates ranging up to 100% on food pr oducts, such as cane sugar and beat sugar 
(Common Report, Chart III.2).  
77. Some manufactured products are subject to technical regulations, such as textiles and 
clothing, glass products, and parts and accessories of motor vehicles (Chapter III(2)(vii)(a)). 
(5) SERVICES  
78. The contribution of the services sector to real GDP increased from 55.5% in 2000 to 60% in 
2004;  the most important subsector is transpor t and communication, which accounted for 10.3% of 
GDP.  Tourism, one of Kenya's principal foreign exchange earners, contributes to GDP through 
several services subsectors, and its linkages exte nd to manufacturing and agriculture. The services 
sector, including government services, absorbs over 60% of the labour force.  Kenya is a net exporter 
of services; however, net receipts from trade in services declined during 2000-04 (Chapter I(3)(i)). 
79. Some state-owned enterprises (SOEs) in the sector  have been privatized or concessioned (e.g. 
Safaricom and Kenya Railways Corporation);  others are expected to be privatized soon (e.g. Telekom 
Kenya Ltd., Kenya Commercial Bank, and Kenya Po rts Authority (Chapter III(4)(iii)).  However, 
steps need to be taken to upgrade Kenya's overall in frastructure.  Further liberalization of services 
should improve the efficiency of the economy, esp ecially by reducing costs related to financial 
services, telecoms, and transport. 
80. Under the General Agreement on Trade in Services, Kenya's horizontal limitations cover 
market access regarding commercial presence as they require foreign service providers to incorporate or 
establish the business locally.168  Kenya's specific commitments under the GATS cover several areas 
(Table AIV.1). Kenya does not maintain MFN exemptions under Article II of the GATS, and signed 
the GATS Fifth Protocol on financial services.169  Kenya also improved its offer on 
telecommunications services, although it did not  sign the GATS Fourth Protocol on basic 
telecommunications. Kenya has pr esented its initial conditional offer in the ongoing services 
negotiations.170 
(i) Financial services 
81. Kenya's financial sector comprises:  the Central Bank of Kenya (CBK);  30 domestic, 
9 foreign-owned, and 2 both domestic a nd foreign banks (down from 53 in 1998);  one  non-bank 
financial institution;  2 mortgage finance companies;  one building society;  40 insurance companies; 
and other specialized financial institutions. 
82. The Nairobi Stock Exchange, established in 1954, is overseen by the Capital Markets 
Authority (CMA), the supervisory body for capital markets development in Kenya since 1990.  The CMA is also pursuing the integration of the EAC capital markets, with a view to having a single capital market in the future.
171  Foreign participation in the Nair obi Stock Exchange was allowed in 
January 1995.  At end 2005, 48 companies, with a total market capitalization of K Sh 462.5 billion 
 
168 Horizontal limitations also cover measures concerning the entry and temporary stay of natural persons 
employed in management and expert jobs. The employment of foreign natural persons has to be agreed upon by 
the contracting parties and approve d by the Government (WTO, 2000). 
169 WTO document WT/LET/ 363, 13 December 2000. 
170 WTO document TN/S/O/KEN, 25 October 2004. 
171 The regulatory framework within the EAC is almost uniform (Central Bureau of Statistics, 2005). EAC-Kenya WT/TPR/S/171/KEN 
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                                                      (up from K Sh 135 billion in 2000), were listed on th e stock exchange. In 2001, Kenya's stock market 
was reorganized into four independent market segments (i.e. main investments, alternative 
investments, fixed income securities, and futures and options).  
83. Any financial institution intending to operate  in Kenya requires a licence.  The CBK  
examines applications and forwards them to the Minister of Finance with its recommendation.  
A licence is granted after consideration by the Minister and upon payment of the prescribed fee.172  
An institution incorporated outside Kenya must meet the minimum capital requirements, and, in 
addition, assign capital to its Kenya branches in such  amount as may be prescribed by the Minister of 
Finance.  This capital is to be kept in Keny a at all times during the effect of the licence.173  A bank or 
financial institution incorporated outside Kenya that  does not propose to transact banking or financial 
business in Kenya may establish a representative office if approved by the Minister of Finance.174 
84. Kenya's main weaknesses in financial services ar e: high level of non-performing loans (20.8% 
of total loans at the end of 2004);  large interm ediation margins (spreads between lending and deposit 
rates of over 10 percentage points);  undercapita lized banking system (aggregate capital adequacy 
ratio well below the 12% minimum requirement);  public sector banks suffer from low or negative 
profitability and high costs;  weak banking supervis ion; fragile National Social Security Fund (NSSF); 
weak insurance companies;  and an underdeveloped capital market.175  
(a) Banking and non-banking institutions 
85. Despite the existence of numerous banks, the banking subsector is still concentrated.  The ten 
largest banks control over 70% of the market share in terms of both total ne t assets and total deposits. 
Kenya's two remaining state-owned banks (i.e. Kenya Commercial Bank (KCB) and the National 
Bank of Kenya (NBK) hold over 40% of non-performing debts.176  
86. The minimum capital requirement is K Sh 250 million for banks a nd mortgage finance 
companies, and K Sh 200 million for other financ ial institutions. In gene ral, commercial banks 
concentrate on short- to medium-term lending, while mortgage finance companies focus on medium- 
to long-term property finance. In addition, Keny a has a wide network of other financial service 
providers:  about 25 micro-finance institutions that are members of the Association of Micro Finance 
Institutions (AMFI)177, Savings and Credit Cooperative Organi zations (SACCOs), Kenya Post Office 
Savings Bank, and five Developmen t Finance Institutions. The National Social Security Fund (NSSF) 
is a statutory pension fund for all employees.  
87. All banks operating in Kenya are universal banks (i.e. are allowed to carry out all types of 
financial activities). Under the Banking Act (Cap  488), every institution intending to carry out 
banking activities must apply for a licence in writing to the Minister through the CBK.  The CBK examines every application and forwards it with its recommendation to the Minister. In considering an 
 
172 The Banking Act, Part II: 4-5 (Application for licence – Licensing of institutions). 
173 The Banking Act, Part II:7 (Minimum capital requirements). 
174 The Banking Act, Part IX:43 (Represent ative Offices of Foreign Institutions). 
175 IMF (2003). 
176 UNCTAD and ICC (2005). 
177 Micro-finance institutions grant short- to medium-term loans to low-income households and micro 
and small-scale enterprises. Four of these institutions ar e  regulated by CBK as banks, while the rest are self-
regulated through the AMFI. The Government has prepar ed a draft Micro Finance Bill that has been approved 
by Cabinet. The Bill is being finalized by the Attorney General Chambers for publication and is to be tabled to 
Parliament soon. WT/TPR/S/171/KEN  Trade Policy Review 
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                                                      application for a licence, the Minister may require to be satisfied as to the:  financial condition and 
history of the institution;  professional and moral suitability of the persons proposed to manage or 
control the institution;  adequacy of its capital structure and earning prospects;  convenience and 
needs of the areas to be served;  and public in terest to be served by the prospective bank. 
88. Bank supervision in Kenya is conducted by th e Bank Supervision Department of the CBK, 
which operates under the Banking Act and the CBK Ac t. The Bank Supervision Department has the 
power to revoke licences of institutions;  to set minimum capital requirements, prudential ratios and regulations, and the frequency of financial statemen ts;  to audit and review institutions;  and to 
approve external auditors. 
89. In an effort to improve the performance of its banking and non-banking institutions, Kenya is 
inter alia : amending the Banking and CBK Acts to transfer from the Ministry of Finance to the CBK 
full powers of licensing, delicensing, regulation, and supervision of banks ; tightening prudential 
regulations on provisioning with a view to ensuring conformity with international best practices; and 
restructuring the NBK to prepare it for privatization. Additional measures to be taken in the medium-term include:  divestiture of the Government's ownership in the remaining banks; strengthening of 
supervisory frameworks for non-bank financial in termediation; expansion of the outreach and 
improvement of operations of microfinance institutions; recapitalization and strengthening of the management and oversight of the NSFF; and strengthening of the judicial system, which would result 
in better enforcement of creditor rights, and an  expansion of the role of commercial banks.
178 
(b) Insurance 
90. In 2004, 40 insurance companies were registered  to supply either long- term, general or both 
types of insurance.179 Insurance companies in Kenya can be re gistered to deal with any type of 
insurance business. Insurance intermediaries are insurance brokers (212) and insurance agencies 
(2,005).  Insurance service providers are risk mana gers (8), loss adjusters (17), insurance surveyors 
(29), loss assessors (207), and one claims settling ag ent.  The maximum foreign equity allowed in 
insurance and reinsurance companies is 66.7%.180  The maximum for insurance brokers is 40%.  
Insurance agents must be Kenyans, while there ar e no restrictions for insurance service providers.  
91. There are two reinsurance companies registered in Kenya: the state-owned Kenya 
Reinsurance Corporation (Kenya Re), and the East  Africa Reinsurance Company Limited, a private 
company. Both are registered to transact long-term and general reinsurance business. There are two regional reinsurance companies: PTA Reinsuranc e Company (PTA Re), and Africa Reinsurance 
Corporation (Africa Re), which are not locally incorporated and therefore are not registered under the Insurance Act. Every insurer must cede 33% of their reinsurance business as follows: Kenya Re (18%), PTA Re (10%) and Africa Re (5%). The balance of 67% can be placed with foreign reinsurance companies subject to a reinsurance premium tax of 5%. 
92. The insurance industry in Kenya is governed by the Insurance Act of 1984, revised in 1988 
and amended from time to time. The Commissioner of Insurance, in the Ministry of Finance, is responsible for the general administration and impl ementation of the relevant legislation, and for 
 
178 IMF (2003). 
179 Long-term insurance business includes bond in vestment, industrial life, ordinary life, and 
superannuation.  General insurance includes aviation, engineering, domestic fire risks, industrial fire risk, 
liability, marine, private motor vehicles, commercial mo tor vehicles, personal accident, theft, and worker 
compensation. 
180 UNCTAD and ICC (2005).  EAC-Kenya WT/TPR/S/171/KEN 
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                                                      overseeing the industry.  The main problems f acing insurance companies in Kenya include: 
competition between insurance companies, which occasi onally affects premium rates;  delays by the 
insurers in settling claims;  the continuing difficulty in managing HIV/Aids, and the provisions as 
proposed by the HIV/Aids Prevention and Control Bill 2004;  and fraudulent claims. 
93. To operate in Kenya, every type of insuran ce professional must be licensed; licences must be 
renewed on an annual basis. The requirements for initial registration as well as those on returns and 
performance position statements must also be met.  The licence fees for registration and renewal are 
set at:  reinsurers, K Sh 250,000;  insurers, K Sh  150,000;  insurance brokers and medical insurance 
providers, K Sh 10,000;  risk managers, loss adjuster s, loss assessors, insurance surveyors, and claims 
settling agents, K Sh 3,000;  and insurance agents, K Sh 1,000.181 
94. Insurance companies must be locally incorporat ed with minimum paid-up capital as follows:  
general insurance company, K Sh 100 million;  l ong-term insurance company, K Sh 50 million;  both 
general and long-term insurance company, K Sh 150 million;  and reinsurance company, 
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 requireme nt also applies to re-
insurance companies. In addition,  an insurer's admitted assets in Kenya should not be less than 
K Sh 20 million, while that of a reinsurer should not be less than K Sh 200 million.  At least one third of the members of the board of directors or management board must be citizens of Kenya. 
95. An insurer applying for registration in Kenya must deposit with the CBK, an amount of 5% of 
admitted assets in Kenyan Government securities for long-term insurance business; 5% of admitted 
assets for general insurance business; and 5% of admitted assets for both long-term and general 
insurance business.  Once the application is approve d by the Commissioner, the deposit is held by the 
CBK under lien in favour of the Commissioner of Insu rance.  Any interest due and collected by CBK 
on such deposits is paid to the insurer. If the application is not approved by the Commissioner the 
deposit is returned to the applicant. 
96. In principle, risks located in Kenya have to be  covered by companies incorporated and located 
in Kenya. There are no restrictions on insurance companies in Kenya underwriting risks from outside the country provided that all such policies are issued in Kenyan schillings.  Insurance for imports is compulsory and must be taken with companies licensed in Kenya (Chapter II(2)(i)). 
(ii) Telecommunications and postal services 
97. Kenya's telecommunications networ k has continued to grow since its last TPR (Table IV.14).  
The number of subscribers in the mobile mark et jumped from 127,400 in 2000 to an estimated 
4,879,400  in 2005. Similarly, the number of internet users increased from 50, 000 to around 2 million, 
while the number of personal computers rose from 150,000 to about 600,000.  At the end of 2005, there were 278,900 main telephone lines in service ( down from 291,700 in 2000), i.e. a teledensity of 
0.84 telephones per 100 inhabitants (down from 0.95 in 2000).
182  
98. Under the 2004 National Information and Comm unications Technology (ICT) Policy of the 
Ministry of Information and Communications (MIC), the main objective in the subsector is to ensure 
 
181 The same amounts apply as penalties for late submission of the respective licence renewal 
applications. 
182 Nairobi and Mombasa account for over 60% of Ke nya's installed telephone exchange capacity. 
There were about 11,500 public phones installed throughout the country in 2003 (up from 6,069 in 1997) 
(UNCTAD and ICC, 2005). WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-98 
 
 
 the availability of efficient, reliable, and affordable telecommunication services throughout Kenya. 
The following targets have been specified: provision of fixed tele phone-on-demand in all urban areas 
by 2015; improvement of teledensity in rural areas from the current 0.16 lines per 100 inhabitants to 
5 lines by 2015, and in urban areas from the current 4 lines per 100 inhabitants to 20 lines by 2015; 
increase in the number of mobile subscribers to 10 million by 2015; expansion of the international 
bandwidth from the current 35 Mbps to 1 Gbps by 2015; all secondary and tertiary schools to have 
internet access by 2007; and establishment of intern et access nodes at all district and local exchange 
areas.183 
Table IV.14 
Selected telecommunica tion indicators, 2000-04 
 2000 2001 2002 2003 2004 
Telephone subscribers ('000) 662.2 909.4 1,272.2 1,919.1 2,845.4 
Telephone subscribers per 100 inha bitants 2.1 2.91 4.79 6.05 8.78 
Main telephone lines ('000) 291.7 309.4 321.5 328.4 299.3 
Main lines per 100 inhabitants 0.95 0.99 1.00 1.03 0.92 
Cellular mobile subscribers ('000) 127.4 340.7 1,187.1 1,590.8 2,546.2 
Cellular subscribers per 100 inhabitants 0.42 1.92 3.77 5.02 7.85 
Internet users ('000) 50.0 200.0 400.0 1,000 1,500 
Internet hosts 2,460 2,702 2,963 8,325 10,016 
Personal computers ('000) 150 175 204 300 441 
Personal computers per 100 inhabitants 0.48 0.56 0.65 0.65 1.36 
Source:  ITU (2005), Telecommunication Indicators , Geneva;  and information provided by the Kenyan authorities.  
99. Until June 1999, the Kenya Post and Telecommunications Corporation (KPTC), a state-
owned company, provided both postal and telecomm unications services and regulated the provision of 
these services. The Kenya Communications Act of 1998 repealed the Kenya Post and 
Telecommunications Act and split KPTC into three separ ated entities: Telkom Kenya Ltd. (TKL);  the 
Postal Corporation of Kenya (POSTA);  and the Communications Commission of Kenya (CCK), the regulatory authority for telecommunications, radio communications, and postal services, including licensing matters. The Act also provides for tw o other institutions: the National Communications 
Secretariat, to provide policy advice to the Ministry; and the Communications Appeals Tribunal, to handle appeals against decisions by CCK. 
100. TKL is currently the only fixed national operato r (there are also fixed local operators), 
although arrangements are under way to license a sec ond national operator. TKL also has exclusive 
rights in: the local systems and services in Nairobi, national long-distance systems and services, international gateway services, as well as internet  node and backbone services. TKL had exclusive 
rights, until 1 July 2004, in global mobile pers onal communications by satellite (GMPCS); GMPCS 
operators are now free to provide voice, data, and information services. The provision of value-added 
services such as internet, call centres, cryptographic, electronic certification, and leased-line data services, has also been liberalized .  Licences are awarded for one-year periods, renewable. There are 
two operators in the mobile cellular market:  Safa ricom (a joint-venture between TKL and Vodafone), 
and Celtel.  Arrangements are under way to license a third operator.  
101. Interconnection arrangements are negotiated be tween operators and sent to the CCK for 
review and approval. For lines leasing, the operators are free to set their prices. There is a price-cap 
system for voice services.  The fixed line operato r proposes a price, with justification, and CCK 
checks it against the cap before approving it.  Mobile  operators are free to set their prices. According 
                                                      
183 Ministry of Information and Communications (2004). EAC-Kenya WT/TPR/S/171/KEN 
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                                                      to the authorities, fixed line prices are the lowest  in the region, while m obile and interconnection 
prices are high by regional comparison. 
102. All telecom operators are required to provide uni versal services;  a Universal Access Fund is 
to be established to help operators in rural areas. 
103. According to the 2004 National ICT Policy, some of the main measures to be taken to further 
liberalize the subsector include:  (i) restructuring of TKL to improve its performance prior to its 
privatization184;  (ii) mobile cellular service suppliers will be permitted to provide their services, 
including permission to carry their own long-distan ce traffic, without seeking additional licence;  and 
(iii) national operators will be licensed to provid e various services (i.e. local fixed telephone, national 
long-distance telephone, international gateway and telephone, internet node and backbone, 
commercial very small aperture terminal (VSAT), and public trunked radio communications). Licences will be for an initial period of 15 years, and may be extended for ten-years thereafter. Competition in the subsector will be reviewed from time to time, in line with prevailing economic and 
market conditions. Foreign investment in telecoms  is restricted to 70% maximum (Chapter II(4)).
185 
104. Kenya is to support the development of regiona l telecoms infrastructur e, such as the East 
African Submarine cable, the East African Di gitization, and the African Satellite projects.186 
105. Kenya's key objective on postal services is to ensure  that all citizens have equal access;  basic 
postal services should be reliable, and reasonably ac cessible for all citizens at affordable and uniform 
rates.  Kenya is to improve postal accessibility fro m 38,000 inhabitants per service point (including 
post office, postal agency, and public mail box) to 23, 000 inhabitants by 2015.  To achieve this, a new 
postal market structure is being introduced.  POSTA  is to provide the following services on exclusive 
basis:  delivery of letters, postcards, printed pape r, and small packets weighting up to a maximum of 
350 grams187;  printing and issuance of postage stamps and philatelic materials; and provision of 
private letter boxes and street posting boxes.  Non-excl usive postal market segments are to consist of:  
courier services, electronic certification services, parcel services, direct mail marketing services, postal financial services, electronic and hybrid mail
188, distribution of publications, and agency 
services (e.g. telephone services, and third-party services).  Tariffs for basic letters are subject to approval by the regulator.  There is no price cap. Th e supplier is free to set prices of the other postal 
services. 
(iii) Transport 
106. The contribution of the transport subsector to Kenya's GDP remained stable at around 7.5% of 
GDP over 2000-04.  Output increased from K Sh  178,776 million in 2000 to an estimated 
K Sh 306,485 million in 2005, with road transport accounting for 53% of the total, followed by air transport (Table IV.15).  Despite the improved economic performance of the subsector during the last 
 
184 Privatization of TKL will be through an initial pub lic share offer at the Nairobi Stock Exchange, as 
well as the sale of a proportion of the company's sh ares to a strategic partner (UNCTAD and ICC, 2005). 
185 Any firm licensed to provide tel ecoms services in Kenya must ha ve at least 30% Kenyan equity 
ownership. For all listed companies, the equity participation has to conform to the rules and regulations of the 
Capital Markets Authority (Ministry of Information and Communications, 2004). 
186 Central Bureau of Statistics (2005). 
187 This limit will be reviewed in line with prevailing economic and market conditions, and any 
variations published in the Official Gazette (Ministry of Information and Communications, 2004). 
188 The Government aims to have all post offices connected to the internet by 2007 to support 
electronic mail services (Ministry of  Information and Communications, 2004). WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-100 
 
 
 few years, transport in Kenya faces several problems, notably high input costs due to the rising world 
price of oil, and inefficient and poor overall infrastructure.189 
Table IV.15 
Transport output, 2000-05 
(K Sh million) 
 2000 2001 2002 2003 2004 2005a
Road transport 94,010 100,400 101,481 110,902 140,796 162,449 
Railway transport 5,277 4,878 4,653 4,361 4,670 4,560 
Water transport 8,964 9,589 10,490 12,501 15,752 16,979 
Air transport 52,580 56,141 59,566 63,943 70,296 90,132 
Services incidental to transport 11,613 12,232 12,218 13,692 19,227 24,453 
Pipeline transport 6,332 6,532 6,631 6,761 6,960 7,912 
Total 178,776 189,771 195,039 212,160 257,701 306,485 
a Provisional. 
Source:  Information provided by the Kenyan authorities.  
107. The Ministry of Transport (MT) is in ch arge of developing/reviewing and overseeing 
enforcement of transport and meteor ological policies.  It is also re sponsible for the various transport 
regulatory bodies:  the Transport Licensing Board (TLB), which regulates road transport services; Kenya Civil Aviation Authority (KCAA), the regulator in the aviation industry;  Kenya Airports Authority (KAA), which regulates airports;  Kenya Ports Authority (KPA), the ports regulator;  and 
the Kenya Maritime Authority (KMA), the shipping industry regulator. 
108. Several SOEs in transport are under the MT:  Kenya Railways Corporation (KRC) established 
in 1978 by the Kenya Railways Corporation Act;  th e Kenya National Shipping Line (KNSL), formed 
in 1989 as a joint venture between the KPA and UNIMAR of Germany;  Kenya Ferry Services (KFS); 
and Motor Vehicle Inspection Unit (MVIU). 
(a) Road transport 
109. About 70% of freight traffic in Kenya goes by road .  The road transport system is divided into 
classified and unclassified roads. Around 14% of the classified network of 63,292 km is bitumen, and 
the rest is either gravel or earth;  about 150,000 km of the road network is not classified.  The classified road network is under the Roads Departme nt of the Ministry of Public Works, while 
unclassified roads are under county councils, the Ministry of Environment and Natural Resources, the Ministry of Tourism, and other bodies.
190 
110. Roads in Kenya have suffered from decades of neglect, and in some areas are a strong 
disincentive to economic activity.191 The causes of poor roads include inadequate funding for periodic 
maintenance, increased traffic volume, high axle  overloading, and corruption in the award and 
supervision of infrastructure contracts. The Govern ment is committed to ensuring more transparency 
in the award and execution of these contracts and m onitoring compliance with contractual obligations 
by both parties. Kenya has also intensified its efforts to provide adequate financial resources for road maintenance. To this end, revenue from the auto motive fuel levy and the transit toll charges is 
                                                      
189 Central Bureau of Statistics (2005). 
190 Investment Promotion Centre (2004). 
191 In 2000, a business environment survey by the World Bank found that 91% of those surveyed 
described the quality of roads and public works in Kenya as bad or very bad, as compared with 44% in Tanzania 
and 24% in Uganda (UNCTAD and ICC, 2005). EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-101 
 
 
                                                      directed to the road maintenance fund;  this amounted to K Sh 8,910 million in 2004/05 (up from 
K Sh 6,780 million in 2000/01).192 
111. Road transport services prices are market de termined.  Cabotage is not allowed.  
112. Together with its neighbouring countries, Ke nya is implementing the Northern Corridor 
Transit Transport Agreement, which facilitates th e transport of goods to and from the port of 
Mombasa. 
(b) Railway transport 
113. Railway transport is the second most important mode of transport in Kenya.  It is particularly 
important for the carriage of bulky goods, especially over long distances.  Thus, its efficiency and 
reliability are important, not only for international trade and transit traffic to neighbouring countries, 
but also in supplementing road transport and in reducing road damage.  
114. KRC is the monopoly provider of rail transport services country-wide.193  KRC operates a rail 
network of over 2,700 km that connects Mombasa to Busia on the Ugandan border, and through 
Kisumu using wagon ferries on Lake Victoria. The existing line has a capacity of 6 million tonnes per annum.  The main problems facing KRC and the subsector in general include: poor management; 
inadequate maintenance of infrastructure due to lack of critical spare parts;  shortage of locomotives 
and wagons;  and inefficient operati ons due to use of old equipment.
194  As a result, a strategic plan 
has been developed for KRC before a new operator is commissioned to help turn around its performance.
195   
115. In July 2004, Kenya and Uganda signed a memorandum of understanding for the joint 
concession of KRC with the Uganda Railways Cor poration (URC). In October 2005, Rift Valley, a 
South African-led consortium, won the right to run KRC and URC for the next 25 years, and was expected to take over their management by 1 July 2006.
196 
116. Freight tonnage decreased from 2.4 million tonnes in 2000 to an estimated 2 million tonnes in 
2005 (Table IV.16).197  The increase in passenger journeys in  2004 was largely due to the expansion 
in commuter train services, in response to an upsurge  in demand for urban transport in Nairobi.  With 
the exception of passenger fares, and services provide d in distant parts of the country, other railway 
services are cross-subsidized. Prices are set freely. 
 
192 Central Bureau of Statistics (2005). 
193 There is, however, a private l eased line operated by the Maga di Soda company (WTO, 2000). 
194 UNCTAD and ICC (2005). 
195 Central Bureau of Statistics (2005). 
196 Sheltam of South Africa has a majority stake (61%) of Rift Valley's shares; the rest is held by 
Comzar of South Africa (10%), Primefuels of Kenya (15%), Mirambo Holdings of Tanzania (10%), and CDIO 
Institute for Africa Development Trust of South Africa (4%) ( BBC News, 20 October 2005). 
197 In 1989/90, rail freight reached 3.6 million tonnes  (WTO, 2000). WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-102 
 
 
 Table IV.16 
Railway traffic, 2000-05 
 2000 2001 2002 2003 2004 2005a
Freight       
Tonnes ('000) 2,400 2,330 2,227 1,999 1,990 2,000 
Tonne-km (million) 1,557 1,603 1,638 1,789 1,454 1,359 
Revenue (K Sh million) 4,227 4,660 5,514 3,845 3,888 4,010 
Revenue per tonne-km (cents) 332 290 293 215 267 295 
Passenger       
Journeys ('000) 4,200 5,517 4,794 4,401 5,657 4,796 
Passenger-km (million) 302 216 306 295 279 499 
Revenue (K Sh million) 227 202 153 160 245 233 
Revenue per passenger-km (cents) 75 94 42 54 87 49 
a Provisional. 
Source: Information provided by the Kenyan authorities.  
(c) Air transport 
117. Kenya has three major international airports: Jo mo Kenyatta International Airport (JKIA),  
Mombasa's Moi International Airport (MIA), and El doret International Airport.  There are medium-
size airports at Nairobi (Wilson Airport), and Kisumu. In addition, there are more than 150 airstrips 
throughout the country; 16 of the main airports ar e state-owned and managed by KAA, a parastatal, 
and others are owned by the provincial administra tion, Kenya Wildlife Service, and individuals.  
118. Air transport is a key subsector for tourism development, for the transport of high value 
exports and perishable goods, and for promoting regional integration.  Total passenger movement rose 
from 4.4 million in 2000 to 5.6 million in 2004, due mainly to an increase in tourists (section (iv) below), and total freight handled in creased from 165,818 tonnes to 236,259 tonnes, partly 
because of larger horticulture e xports (section (2)(iii)(a) above). 
119. The Kenya Civil Aviation Authority (KCAA) is required to consider, and advise the Minister 
of Transport on, a wide range of matters including the establishment of air services; civil aviation legislation (including legislation to give effect to conventions); measures to promote or support any 
airlines designated by the Government for the purpo ses of any international air service agreement;  
fares and freight rates and related matters, incl uding implementation of any IATA resolution;  air 
navigation facilities and services;  and the cost of establishing and maintaining air navigation 
facilities, and the policy to be adopted to recover such  costs.  In addition, the KCAA is in charge of 
granting licences for international and domestic non- scheduled air service operations into and within 
Kenya. 
120. Scheduled air transport services are subject to  bilateral air services agreements (BASAs). 
Kenya Airways is the designated national carrier operating scheduled services into and out of Kenya 
in accordance with BASAs.198  However, other Kenyan companies are allowed to operate: 
international and domestic charter airlines operate into and out of Kenya as well as within Kenya. 
Some charter operators are locally owned, others are foreign owned.199  
                                                      
198 In 1996, the Government of Kenya sold 77% of its shares in Kenya Airways to:  KLM (26%);  
Kenyan financial institutions (13%);  international investors (15%);  and over 113,000 Kenyans, who bought 
about 23% of the shares. As a resu lt, the Kenyan Treasury received US$76 million. The Government of Kenya 
still owns 23% of Kenya Airways shares (UNCTAD and ICC, 2005). 
199 WTO (2000). EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-103 
 
 
                                                      121. Air traffic is allocated under Kenya's BASAs.  The supply of handling services is provided by 
a subsidiary of Kenya Airways (Kenya Air Handli ng). Cabotage is not allowed in air transport. 
(d) Maritime transport 
122. Maritime transport in Kenya consists of port facilities in Mombasa, shipping and inland water 
transport, and inland container depots at Na irobi, Kisumu, and Eldoret. Mombasa, the only 
commercial seaport in Kenya, is the leading port and major distribution centre.  It serves as a trade 
artery for Burundi, the eastern portion of the Demo cratic Republic of Cong o, Rwanda, Tanzania, 
Uganda, and southern Sudan.  Inland ports ar e currently owned and managed by the KRC. 
123. Kenya Ports Authority (KPA), a parastatal, h as a monopoly on cargo handling at the Port of 
Mombasa and manages the different container depots.200  Despite complaints about delays at 
Mombasa, and about the lack of transparency in customs, the traffic handled at Mombasa port has 
risen steadily over the last few years.  Port thr oughput increased to 12.9 million tonnes in 2004 from 
9.1 million tonnes in 2000;  container cargo traffic reached 438,597 twenty foot equivalent units 
(TEUs) in 2004, up from 236,928 TEUs in 2000.201  To further improve efficiency and 
competitiveness at Kenyan ports, the Government  is planning to upgr ade Mombasa's port and 
privatize some of the services.  Moreover, the reform envisages transforming the KPA into a landlord port authority, ceding most cargo handling and complementary services to the private sector.
202  The 
supply of these services is currently under the monopoly of the KPA. 
124. The maritime transport industry is regulated by  the Merchant Shipping Act of 1989.  The 
Kenya National Shipping Line (KNSL) operates under the Act and UNCTAD' s Code of Conduct for 
Liner Conferences.  Since its inception, the KNSL h as had no vessels of its own and has operated as a 
non-vessel operator (NVO) relying on cargo space allocated to it by other carriers. 
125. A survey fee is payable for all ships that are ce rtified as seaworthy.  A merchant shipping fee, 
calculated on the tonnage carried, is levied on all cargo vessels that call at the port of Mombasa.  
126. Prices of maritime transport services are mark et determined; prices of maritime transport 
services under monopoly are set by KPA. 
(iv) Tourism 
127. Tourism is critical to the Kenyan economy; it accounts for some 12% of GDP, it is the 
country's leading foreign exchange earner, and it is an important employer. Kenya offers some of the finest natural attractions in the world, combined  with a high-quality network of hotels and game 
lodges. With its national parks, game reserves, mari ne parks, biosphere reserves, archaeological sites, 
and good beaches, Kenya is a natural tourism magnet.
203 However, many of these resources remain 
largely unexploited. 
128. Kenya received over one million visitors a year during 2000-05 (up from 600,000 to 
700,00 visitors in the 1990s), earning about K Sh  48.9 billion in 2005. The average length of stay increased from 8.7 days in 2000 to 12 days in 2005 (Table IV.17). Nevertheless, tourism receipts are 
 
200 Investment Promotion Centre (2004). 
201 Central Bureau of Statistics (2005). 
202 UNCTAD and ICC (2005). 
203 Kenya is also being promoted as a meeting, conference, and exhibition venue (Investment 
Promotion Centre, 2004). WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-104 
 
 
 still well below the peak reached in 1995 (over US$500 million). Security concerns, and competition 
from new emerging tourist markets in the African regi on have affected the subsector over the last few 
years. Consequently, in addition to increasing the level of security in Kenya204, the Government has 
established a task force (comprising both public and private sector representatives) to address matters 
relating to security in tourism.  
Table IV.17 
Tourism in Kenya, 2000-05 
Purpose 2000 2001 2002 2003 2004 2005a
 Visitor arrivals ('000) 
Holiday 778.2 728.8 732.6 684.0 885.6 1,063.0 
Business 98.3 92.1 86.6 182.1 246.4 206.2 
Transit 138.5 152.6 163.3 219.1 162.2 79.8 
Other 21.5 19.5 19.0 61.0 66.5 130.0 
Total 1,036.5 993.6 1,001.3 1,146.2 1,360.7 1,479.0 
 Number of days stayedb ('000)  
Holiday 7,413.1 7,123.2 7,335.8 6,975.9 11,414.3 13,383.3 
Business 814.8 699.0 717.1 979.8 1,336.0 2,454.4 
Transit 279.5 321.8 374.8 396.8 147.1 142.8 
Total 8,507.4 8,144.0 8,427.7 8,352.5 12,897.4 15,981.9 
Average length of stay in days 8.7 8.4 8.5 8.4 13.0 12.0 
a Provisional. 
b Excludes "Other visitors" category. 
Source: Information provided by the Kenyan authorities.  
129. Other problems facing the tourism industry include: insufficient tourism promotion and 
marketing efforts;  inadequate diversification of  tourism products and market segments;  a weak 
institutional and regulatory support fra mework;  deterioration of the country's tourism infrastructure 
and other tourism-related services; a lack of skille d labour;  environmental de terioration;  and poor 
control over tourism development. As a result, a new tourism policy and a t ourism development plan 
are being formulated. The legislation and the regul atory framework affecting private investors are 
being reviewed to provide a more hospitable environment for investors.205 
130. Europe continues to be the major source of vi sitors to Kenya, especially Germany and the 
United Kingdom, followed by North America and Africa.  The share of visitors from Europe fell from 77.7% in 2000 to 73.8% in 2004, of which a bout 70% were holidayma kers. Asian tourists, 
particularly from India and Japan, have increased rapidly over the last few years, and now account for 
over 6% of the total. 
131. The Ministry of Tourism and Wildlife (MOT W) is responsible for the formulation, 
coordination, and administration of tourism and wildlife policy.  In addition, the following parastatals and organizations fall under its responsibility: Kenya Tourist Development Corporation (KTDC), 
established in 1965, is in charge of tourism facilitie s development and indigenization of the subsector; 
Bomas of Kenya, established in 1971 under the Companies Act (Cap 486) as a subsidiary of KTDC to preserve, maintain, and promote the rich and diver se culture of Kenya's various ethnic groups; Kenya 
Wildlife Service (KWS), established in 1989, with a mandate for wildlife conservation and 
management; Kenya Tourism Board (KTB), establishe d in 1997, is mandated to coordinate tourism 
promotion activities; Kenya Utalii College (KUC),  established in 1975, as a centre for tourism 
training; Catering and Tourism Development Levy Trustee (CTDLT), established in 1986, to control 
                                                      
204 Kenya has had a Tourist Police Unit since 1987. It is being restructured, strengthened and further 
equipped to provide security to visitors.  Kenya is also working with other countries on security-related issues. 
205 UNCTAD and ICC (2005). EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-105 
 
 
                                                      and administer the Levy Fund for the training of pers ons to be employed in hotels and restaurants; and 
Kenyatta International Conference Centre (KICC), established in 2004, to rehabilitate, manage, and 
maintain the building and its facilities.206 
132. No specific incentives are granted to the tourism industry in Kenya.  However, as part of the 
effort to support tourism, a 2% levy (Levy Fund) is  charged on all tourism services. In addition, the 
16% VAT applies on hotel and restaurant services, and an international airport tax of US$20 per 
person is payable on departure (for domes tic flights the tax is K Sh  100).207 Furthermore, the Tourism 
Trust Fund, launched in January 2 003, is a joint initiative between the EC and the Government of 
Kenya to broaden the range of new and innova tive commercially viable tourism products.208 
133. The tourism subsector is mainly regulated by the Hotels and Restaurant Act of 1986 
(Cap 494);  the Tourist Industry Licensing Act of 1990 (Cap 381); and the Wildlife Conservation and Management Act of 1989 (Cap 376).  The Foreign I nvestment Act is also relevant as it regulates 
investment in all sectors of the economy (Chapter II(4)).  The Hotel and Restaurant Act established the Hotel and Restaurant Authority, which is in charge of reviewing the standard of hotels and 
restaurants; stipulating the specific licensing requirements for hotels, and fees for the granting of a 
hotel and restaurant licence;  and regulating prices through fixing minimum or maximum tariffs for 
hotels or restaurants.  Hotel licence fees range from K Sh 5,500 to K Sh  82,500 according to the 
number of beds, while restaurant licence fees ra nge from K Sh 7,500 to K Sh 45,000 based on the 
previous year's gross receipts.  These fees are in addition to those specified in the Tourist Industry 
Licensing Act.
209 While the nationwide hotels and restaura nts classification is free of charge, those 
requesting classification or re-classification are charged a standard fee of K Sh 3,000. 
134. The Tourist Industry Licensing Act regulates lic ensing requirements and fees for all tourism 
industries.  Anyone who wishes to establish a business in the tourism industry requires a licence.  The authorities have discretionary powers to issue or refuse a licence, or to modify a licence, and may impose such conditions as they deem desirable in the interests of the tourism industry as a whole.  
Licences are valid for a period of one year from the date of issuance and are non-transferable. 
However, government-operated enterprises and taxi-cabs are exempt from licensing requirements.
210 
The Hotels and Restaurants Act mandates the MOTW, in liaison with the Immigration Department, to 
evaluate the employment of expatriates in the to urism subsector. This is  meant to ensure that 
foreigners are not granted opportunities to work in Kenya at the expense of qualified Kenyans. 
135. Tourism enterprises are classified as Class "A", "B ", or "C" (Table IV.18);  the respective 
licence fees are:  K Sh 8,000, K Sh 6,000, and K Sh 2,000.  Enterprises exempted from such fees are 
either those operated by the Government or the co mmunity; or consisting of taxi-cab operating within 
the area of jurisdiction of the local authority under whose by-laws the enterprise is registered. Under 
the Tourist Industry Licensing Act, MOTW also issu es tourist vehicle stickers, aimed at regulating 
vehicles involved in the transportation of tourists. The fees for Kenya registered vehicles is K Sh 200, 
while the fee for foreign registered vehicles is K Sh 300.211 
 
206 The Kenyatta International Conference Centre in  Nairobi is the biggest conference venue in the 
country, seating up to 5,000 persons (Ministry of To urism and Wildlife online information.  Available at: 
http://www.tourism.go.ke/mandate.htm). 
207 Investment Promotion Centre (2004). 
208 Ministry of Tourism and Wildlife online inform ation.  Available at: http://www.tourism.go.ke/ 
tourism_trust_fund.htm. 
209 See WTO (2000). 
210 The Tourist Industry Licensing Act. 
211 Legal Notice No. 97, 4 October 2002. WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-106 
 
 
 Table IV.18 
Regulated tourist enterprises 
Class "A" enterprises 
Enterprises (whether carried on alone or in conjunction with some  other enterprises) falling within  one or more of the followin g classes: 
1. Tour/safari operators 
2. Motor vehicles hire 
3. Local air-charter companies  
4. Travel agency (AITA appointed agents) 
5. Water sports 
6. Balloon operators 
7. Boat excursions 
8. Game ranches  
Class "B" enterprises 
Enterprises (whether carried on alone or in conjunction with some  other enterprises) falling within  one or more of the followin g classes: 
1. Proprietors, owner-drivers, and self employed drivers of passe nger vehicles used wholly and partly in a tourist enterprise 
2. Safari outfitters, including shopkeepers, stallholders, and any other person offering garments of souvenir value for sale to  tourists 
as a substantial part of their business 
3. Game fishing outfitters  
4. Proprietors of enterprises offering camps and camping equipment for hire 
5. Motor cycle or bicycle hire enterprises 
6. Nature parks 
7. Amusement parks 
8. Non-citizen tour leaders/guides 
Class "C" enterprises 
Enterprises (whether carried on alone or in conjunction with some  other enterprises) falling within  one or more of the followin g classes: 
1. Shopkeepers, stall holders, stand holders, and any other person offering for sale to tourists as a substantial part of business goods 
made by hand from indigenous raw materi als and manufactures of such goods 
2. Local traditional boat operators 
3. Professional safari photographers 
4. Travel bureau or booking offices other than those of an air line, which operates internationa l air routes and does not carry on any 
tourist activities in Kenya 
5. Interpreters  
6. Private zoos 
7. Cultural centres 
8. Citizen tour leaders/guides 
Source: The Tourist Industry Licensing Act.  
136. Within the EAC, Articles 115 and 116 of the EAC Treaty outline cooperation in tourism and 
wildlife management. EAC member states shall, inter alia , coordinate their tourism policies and 
establish a common code of conduct for private and pub lic tour and travel operators, standardize hotel 
classifications, and harmonize the professional standards of agents in the tourism and travel industries. 
137. Kenya is a member of the World Tourism Organization. EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-107 
 
 
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African Development Bank (2005), Kenya – Country Strategy Paper 2005-07 , Tunis.  
Central Bank of Kenya (2004), Statistical Bulletin, June, Nairobi. 
Central Bureau of Statistics (2004), Economic Survey 2004 , Nairobi. 
Central Bureau of Statistics (2005), Economic Survey 2005 , Nairobi. 
Economist Intelligence Unit (2005),  Country Profile – Kenya , London. 
Export Processing Zones Authority (2005a), Kenya's sugar industry 2005 , Nairobi. 
Export Processing Zones Authority (2005b), Tea and Coffee Industry in Kenya , Nairobi. 
Government of Kenya (2005), Investment programme for the Economic Recovery Strategy for Wealth 
and Employment Creation, 2003-2007, Revised Edition , Nairobi. 
HCDA (2005), Strategic Plan 2005-2009 , Nairobi. 
ILO (2004), "International Observatory of Labour Law:  National Labour Law Profile:  Kenya", 
24 August, Geneva. 
IMF (2003a), Kenya: Request for a Three-Year Arrangement Under the Poverty Reduction and 
Growth Facility , Washington, D.C.  
IMF (2003b), Kenya – Selected Issues and Statistical Appendix , Washington D.C. 
IMF (2004a), Kenya – Selected Issues and Statistical Appendix , Washington D.C. 
IMF (2004b), Kenya – Staff Report for the 2004 Article IV Consultation, First Review Under the 
Poverty Reduction and Growth Facility, and Request s for Augmentation of Access, Rephasing of the 
Arrangements and Waiver of Performance Criteria , Washington D.C. 
Institute of Policy Analysis and Research (2002), Kenya's petroleum market and pricing policy before 
and after deregulation , Nairobi. 
International Trade Canada (2004), Import Regulations – Kenya .  Available at 
http://www.infoexport.gc.ca/ie-en/DisplayDoc ument.jsp?did=14353  [9 February 2006]. 
Investment Promotion Centre (2004), Kenya at a glance , Nairobi. 
Kenya Bureau of Standards (2005), Catalogue of Standards , Nairobi.   
Kenya Bureau of Standards (2006), Standards Catalogue Supplement 2006 , Nairobi. 
Ministry of Agriculture (2004), Strategy for Revitalizing Agriculture 2004-2014 , Nairobi. 
Ministry of Agriculture (2005), Revitalization of the Sugar Industry , Nairobi. 
Ministry of Finance (2005a), Budget Speech for Fiscal Year 2005/06 , Nairobi .  WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-108 
 
 
 Ministry of Finance (2005b), Draft of Sessional Paper on Privatization of State Corporations and 
Investments , Nairobi. 
Ministry of Information and Communications (2004), National ICT Policy , Nairobi. 
Ministry of Planning and National Development (2002), Economic Recovery Strategy for Wealth and 
Employment Creation 2003-2007 , Nairobi. 
Ministry of Trade and Industry (undated), Investment Climate Action Plan 2005-2007.  Available at: 
http://www.tradeandindustry.go.ke/documents /di_ICAP.pdf [8 February 2006]. 
Ministry of Trade and Industry (2005), Trade Facilitation Project in Kenya:  Study of Administrative 
Barriers and Other Impediments to Trade in Kenya , Commissioned by the Commonwealth Secretariat 
and prepared by Emerging Market Economics and Almaco Management Consultants Ltd.  Available 
at:  http://wwww.tradeandindustry.go.ke/documents/report_administrative_barriers05.pdf.  
Mullei, A. (2003), Stimulating Investment In Kenya – Presentation at The National Investment Conference , Governor of the Central Bank of Kenya, Nairobi. 
OECD Development Centre (2003), Public Procurement – Lessons from Tanzania, Kenya, and 
Uganda, Working Paper No. 208, Paris. 
Otieno-Odek, J. (2001), Towards TRIPS Compliance:  Kenya's Experience and Legislative Reforms, University of Nairobi, Discussion paper, Nairobi . 
Public Procurement Directorate (2005), Appeals Board Digest Matrix.  Available at:  
http://www.treasury.go.ke/ppd/digestmatrix05.pdf. 
UNCTAD (2005), Investment Policy Review – Kenya , Geneva. 
UNCTAD and Japan Bank for International Cooperation (2005), Blue Book on Best Practice in 
Investment Promotion and Facilitation – Kenya , May, Geneva. 
UNCTAD and ICC (2005), An Investment Guide to Kenya – Opportunities and Conditions , June, 
Geneva . 
UNDP (2005), Human Development Reports, "Country Data: Kenya".  Available at: http://hdr.undp.org/statistics/ data/countries.cfm?c=KEN. 
USAID (2006), Food Aid Bulletin for East Africa, Washington D.C.   
USTR (2005), Kenya Foreign Trade Barriers . Available at:  http://www.ustr.gov/assets/ 
Document_Library/Reports_Publications/ 2005/2005_NTE_Report/asset _upload_file747_7480.pdf. 
USTR (2006), Kenya Foreign Trade Barriers . Available at:  http://www.ustr.gov/assets/ 
Document_Library/Reports_Publications/2006/ 2006_NTE_Report/asset_uploa d_file389_9187.pdf..  
World Bank (2005), Country Brief – Kenya .  Available at:  http://www.worldbank.org. 
WTO (2000), Trade Policy Review – Kenya , Geneva. 
  
APPENDIX TABLES  EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-111 
 
 
 Table AI.1 
Structure of exports, 1999-04 
(US$ million and per cent) 
  1999 2000 2001 2002 2003 2004 2004 incl. 
re-exports 
                
Total (US$ million) 1,650.9 1,571.0 1,520.2 1,400.4 2,551. 1 2,033.9 2,683.2 
                
  (per cent) 
                
Total primary products 77.2 78.9 76.0 75.6 75.3 74.1 78.8 
   Agriculture 66.0 67.6 72.4 42.7 53.2 67.7 51.6 
      Food 58.2 59.0 59.5 32.0 42.4 51.9 39.6 
         0741  Tea 28.4 29.5 29.5 10.1 18.9 22.4 17.2 
         0545  Other fresh or chilled vegetables 3.7 6.5 6.9 5.1 5.5 7.7 5.9 
         0711  Coffee, not roasted 10.4 9.8 6.3 2.5 3.5 4.6 3.5 
         0589  Fruit, nuts, n.e.s., whether or not sweetened 2.3 2.1 3.1 3.2 2.0 2.2 1.7 
         1222  Cigarettes containing tobacco 1.0 1.3 1.5 1.2 1.1 1.4 1.1 
         0344  Fish fillets, frozen 1.6 2.2 2.6 1.1 1.5 1.4 1.0 
         0622  Sugar confectionery, not containing cocoa 0.8 1.1 1.3 0.4 1.0 1.3 1.0 
         0577  Edible nuts fresh, dried 0.9 0.5 0.8 0.4 0.6 1.3 1.0 
         4222  Palm oil, fractions 0.7 0.5 0.3 0.5 0.9 1.3 1.0 
         0567  Vegetables prepared or preserved, n.e.s. 1.2 0.7 0.7 0.6 0.6 1.2 0.9 
         0345  Fish fillets and other fish meat fresh, 
 chilled/frozen 0.0 0.0 0.3 0.5 0.4 0.9 0.7 
      Agricultural raw material 7.8 8.6 12.9 10.7 10.8 15.8 12.0 
         2927  Cut flowers and foliage 5.5 5.9 9.0 7.2 7.0 11.5 8.8 
         2926  Bulbs, tubers, cuttings, slips, live plants, etc. 0.3 0.5 1.1 1.7 1.6 1.9 1.4 
   Mining 11.2 11.2 3.6 32.9 22.1 6.4 27.1 
      Ores and other minerals 2.5 2.6 3.0 1.9 2.3 4.7 3.6 
         2789  Minerals, crude, n.e.s. 1.2 1.3 1.7 1.0 1.3 3.4 2.6 
      Non-ferrous metals 0.4 0.6 0.5 0.3 0.6 0.8 0.6 
      Fuels 8.4 8.1 0.1 30.7 19.2 0.9 22.9 
         3341  Motor gasoline, light oil .. .. .. .. .. .. 22.7 
              
Manufactures 22.1 20.7 23.1 23.9 24.0 25.6 21.0 
   Iron and steel 2.4 2.2 3.1 2.2 2.4 4.7 3.6 
         6741  Flat-rolled products, iron/steel, zinc plated 0.8 0.6 1.4 1.7 1.1 1.8 1.3 
         6744  Flat-rolled iron/steel products, clad, etc.,  n.e.s., ≥ 600 mm  0.0 0.0 0.1 0.1 0.4 0.9 .. 
   Chemicals 6.2 5.6 5.6 2.8 4.8 5.3 4.2 
         5541 Soap 1.4 0.5 0.3 0.2 0.5 1.1 0.8 
         5429 Medicaments, n.e.s. 0.6 0.6 0.7 0.3 0.8 1.0 0.8 
   Other semi-manufactures 5.8 6.0 6.5 5.7 5.7 7.4 6.0 
         6612  Portland cement and similar hydraulic  cements 1.1 1.3 1.1 1.2 1.2 1.4 1.1 
   Machinery and transport equipment 0.9 0.5 1.2 5.4 3.1 1.5 1.6 
      Power generating machines 0.0 0.0 0.0 0.1 0.1 0.1 0.1 
      Other non-electrical machinery 0.5 0.2 0.5 1.2 1.2 0.4 0.4 
         Agricultural machinery and tractors 0.0 0.0 0.1 0.2 0.1 0.0 0.0 
      Office machines and telecommunication equipment 0.0 0.0 0.1 0.7 0.2 0.1 0.1 
      Other electrical machines 0.2 0.1 0.3 0.5 0.4 0.6 0.5 
      Automotive products 0.0 0.0 0.1 0.8 0.6 0.1 0.3 
      Other transport equipment 0.2 0.1 0.2 2.1 0.6 0.3 0.3 
   Textiles 1.9 1.7 1.6 1.3 1.2 1.5 1.3 
   Clothing 0.8 0.6 0.4 0.3 0.3 0.5 0.5 
   Other consumer goods 4.2 4.2 4.7 6.2 6.5 4.7 3.7 
         8931 Plastics containers, stoppers, lids, etc. 1.1 1.2 1.5 0.3 0.9 1.3 1.0 
               
Other 0.7 0.4 0.9 0.5 0.6 0.3 0.2 
   Gold 0.4 0.4 0.8 0.5 0.6 0.3 0.2 
.. Not available. 
Source:  WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3 data. WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-112 
 
 
 Table AI.2 
Structure of imports, 1998-04 
(US$ million and per cent) 
  1998 1999 2000 2001 2002 2003 2004 
                
Total (US$ million) 3,301.8 2,785.6 2,891.4 4,008. 0 3,074.7 3,475.1 4,563.5 
                
  (per cent) 
                
Total primary products 36.1 31.7 40.1 37.7 32.5 38.8 38.4 
   Agriculture 17.1 14.5 16.4 15.5 14.4 14.3 12.5 
      Food 14.4 11.9 14.0 13.4 12.2 12.2 10.4 
         4222 Palm oil, fractions 3.8 3.8 3.0 2.8 4.9 4.1 2.2 
         0412 Other wheat (including spelt) and meslin, 
 unmilled 2.3 2.6 2.4 2.4 1.9 2.2 1.8 
         0449 Other maize, unmilled 2.3 0.4 2.0 0.9 0.1 0.4 1.2 
         0423 Rice, milled, semi -milled 0.5 0.5 0.9 0.9 0.8 1.0 0.9 
      Agricultural raw material 2.6 2.6 2.5 2.1 2.2 2.1 2.1 
   Mining 19.0 17.2 23.7 22.3 18.1 24.5 25.9 
      Ores and other minerals 0.5 0.4 0.4 0.2 0.2 0.2 0.3 
      Non-ferrous metals 1.1 1.1 1.1 1.2 1.2 1.2 1.3 
      Fuels 17.5 15.8 22.2 20.9 16.7 23.1 24.3 
         3330 Crude oils of petroleum and bituminous  minerals 8.1 5.7 11.8 10.9 6.2 9.1 11.9 
         3341 Motor gasoline, light oil 2.6 0.0 1.3 1.1 0.0 13.4 11.6 
               
Manufactures 63.6 66.6 59.4 61.8 66.6 60.5 60.9 
   Iron and steel 4.0 4.7 3.9 3.9 4.6 4.9 6.1 
         6732 Flat, hot-rolled products, iron/steel, not  clad/plated/coated 1.5 1.9 1.9 1.8 2.4 3.0 3.6 
         6761 Bars and rods , hot-rolled, irregularly wound, 
 iron/steel 0.4 0.5 0.3 0.3 0.6 0.6 0.8 
   Chemicals 15.1 16.0 14.7 13.2 16.2 15.3 15.7 
         5629 Fertilizers, n. e.s. 1.3 2.2 1.9 1.8 2.3 2.0 2.3 
         5711 Polyethylene 1.3 1.4 1.4 1.2 1.2 1.3 1.6 
         5429 Medicaments, n.e.s. 1.4 1.4 1.2 1.2 1.7 1.9 1.4 
         5514 Mixtures of odoriferous substances, industrial  use 0.2 0.3 0.2 0.3 0.8 0.8 0.8 
         5621 Mineral or chemical fertili zers, nitrogenous 0.3 0.5 0.5 0.5 0.4 0.4 0.8 
   Other semi-manufactures 6.0 6.7 5.8 5.3 6.3 5.8 5.3 
   Machinery and transport equipment 31.2 30.5 27.8 32.6 31.8 27.3 24.3 
      Power generating machines 0.8 1.5 4.3 1.6 0.6 0.4 0.5 
      Other non-electrical machinery 8.4 7.9 6.4 5.1 5.2 6.0 5.5 
         Agricultural machinery and tractors 0.8 0.6 0.4 0.4 0.5 0.5 0.7 
      Office machines and telecommuni cation equipment 4.4 4.1 4.9 5.3 6.1 4.4 5.2 
         7641 Electrical apparatus for line  telephony/telegraphy  0.3 0.7 2.0 2.3 2.1 0.8 1.1 
         7649 Parts and acce ssories for apparatus of division 
 76 0.5 0.2 0.7 0.3 0.4 0.4 0.8 
      Other electrical machines 2.6 3.0 2.7 2.0 2.3 1.8 2.1 
      Automotive products 9.0 7.4 5.4 5.6 7.2 7.3 6.9 
         7812 Motor vehicles for the transport of persons,  n.e.s. 3.2 2.7 2.1 2.1 2.7 3.0 2.7 
         7821 Goods vehicles 2.7 2.3 1.2 1.6 2.0 2.0 2.0 
         7831 Public-transport type passenge r motor vehicles 0.8 0.8 0.8 0.9 1.1 0.9 0.8 
      Other transport equipment 6.0 6.6 4.1 13.0 10.4 7.4 3.9 
         7924 Aeroplanes, etc. (excl. helicopters),  >15,000 kg unladen 0.4 3.1 0.5 9.2 5.8 4.9 0.8 
   Textiles 1.7 1.9 1.6 1.6 1.9 1.8 1.7 
   Clothing 0.5 0.5 0.4 0.3 0.3 0.4 0.3 
   Other consumer goods 5.2 6.3 5.1 4.8 5.4 5.1 7.5 
         8928 Printed matter, n.e.s. 0.5 0.6 0.4 0.6 0.4 0.3 2.7 
               
Other 0.3 1.7 0.5 0.5 0.9 0.7 0.7 
   Gold 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Source:  WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3 data. EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-113 
 
 
 Table AI.3 
Destination of exports, 1999-04 
(US$ million and per cent) 
  1999 2000 2001 2002 2003 2004 2004 incl.
re-exports 
                
Total (US$ million) 1,650.9 1,571.0 1,520.2 1,400. 4 2,551.1 2,033.9 2,683.2 
                
  (per cent) 
                
  America 2.7 3.0 3.5 1.8 2.3 2.9 2.4 
    United States 2.3 2.3 2.7 1.4 1.6 2.1 1.8 
    Canada 0.4 0.4 0.3 0.2 0.3 0.3 0.2 
    Other America 0.1 0.3 0.5 0.2 0.4 0.5 0.4 
                
  Europe 35.0 35.2 38.1 30.3 30.2 38.7 29.7 
    EC(15) 33.5 33.6 36.2 28.9 27.8 35.9 27.6 
      United Kingdom 14.7 15.5 15.8 13.3 12.3 13.8 10.5 
      Netherlands 5.5 6.1 8.9 7.2 7.4 11.0 8.3 
      Germany 5.0 4.6 4.3 2.5 3.0 3.0 2.3 
      France 2.3 2.0 2.1 1.4 0.1 2.7 2.2 
      Belgium-Luxembourg 1.4 1.6 1.7 1.2 1.3 1.6 1.2 
      Italy 1.4 1.3 0.9 1.3 1.0 1.3 1.2 
    EFTA 0.9 1.0 1.2 1.0 1.3 1.0 0.7 
    Eastern Europe 0.4 0.5 0.5 0.4 1.0 1.6 1.2 
      Former USSR 0.0 0.0 0.1 0.1 0.6 1.2 0.9 
    Other Europe 0.2 0.1 0.2 0.1 0.1 0.1 0.1 
                
  Asia 16.8 20.3 21.0 10.9 15.4 19.8 15.5 
    Middle East 4.7 5.4 5.8 3.0 3.6 4.0 3.5 
      United Arab Emirates 1.7 2.2 2.6 1.2 1.2 1.4 1.1 
      Yemen 1.0 1.0 1.1 0.5 1.3 1.3 1.0 
    East Asia 2.6 3.3 3.3 1.8 2.3 4.1 3.2 
    South Asia 9.5 11.6 11.9 6.1 9.4 11.6 8.9 
      Pakistan 7.8 8.3 7.4 2.4 5.1 7.1 5.4 
      India 1.5 1.1 1.9 2.5 1.4 2.5 1.9 
      Afghanistan 0.0 2.0 2.4 1.2 2.7 1.8 1.4 
                
  Oceania 0.6 0.5 0.7 0.3 0.5 0.4 0.3 
                
  Africa 43.1 39.3 35.9 48.1 42.6 34.7 42.8 
    Sub-Saharan Africa 36.8 32.8 29.5 45.1 38.8 29.7 38.8 
      Uganda 16.1 14.4 10.5 21.5 15.7 10.0 17.5 
      United Republic of Tanzania 9.9 7.3 7.1 7.6 7.8 6.9 8.0 
      Sudan 2.0 1.6 1.7 1.7 2.3 2.3 2.0 
      Somalia 1.5 2.1 1.4 3.2 2.1 1.7 1.5 
      Rwanda 2.4 1.5 1.1 2.9 3.1 1.5 3.1 
      Zambia 0.1 0.1 0.3 0.7 0.9 1.5 1.1 
      Ethiopia 1.2 1.3 1.7 0.8 1.4 1.2 .. 
      Burundi .. .. .. .. .. .. 1.5 
    Other Africa 6.2 6.5 6.4 3.0 3.8 5.0 4.0 
      Egypt 5.8 5.9 5.9 1.8 3.1 4.0 3.1 
                
  Other 1.8 1.7 0.9 8.6 9.0 3.4 9.1 
      Areas n.e.s 1.2 0.1 0.5 6.3 7.3 3.4 9.1 
                
Memorandum:               
    EC(25) 33.9 34.1 36.7 29.2 28.2 36.4 28.0 
.. Not available. 
Source:  WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3 data. 
 WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-114 
 
 
 Table AI.4 
Origin of imports, 1998-04 
(US$ million and per cent) 
  1998 1999 2000 2001 2002 2003 2004 
                
Total (US$ million) 3,301.8 2,785.6 2,891.4 4,008. 0 3,074.7 3,475.1 4,563.5 
                
  (per cent) 
                
  America 12.5 9.7 6.5 15.4 8.7 8.5 7.1 
    United States 7.9 6.8 4.4 13.1 6.9 7.1 4.3 
    Canada 0.7 0.9 0.4 0.6 0.5 0.8 0.8 
    Other America 3.9 2.0 1.7 1.7 1.3 0.6 2.0 
      Argentina 1.7 0.8 1.1 1.2 0.8 0.2 1.1 
                
  Europe 35.1 36.3 35.2 29.5 35.4 24.0 28.3 
    EC(15) 32.2 32.3 31.9 26.7 33.1 20.2 24.9 
      United Kingdom 12.2 11.9 10.9 9.3 9.2 6.9 8.9 
      Germany 5.7 5.7 3.9 3.9 5.2 3.9 3.4 
      France 4.0 3.4 3.5 3.7 6.4 0.0 3.4 
      Belgium-Luxembourg 1.6 1.6 2.7 3.1 3.1 2.2 2.5 
      Netherlands 2.7 2.6 3.9 1.7 2.3 2.3 2.2 
      Italy 2.6 2.5 3.3 2.3 1.6 1.9 1.9 
    EFTA 1.5 1.8 1.3 1.8 1.5 1.4 1.3 
      Switzerland 1.2 1.5 1.2 1.3 1.3 1.3 1.1 
    Eastern Europe 1.1 1.7 1.7 0.7 0.6 2.1 1.7 
      Former USSR 0.6 1.1 1.4 0.5 0.4 1.1 1.0 
    Other Europe 0.3 0.6 0.3 0.3 0.3 0.3 0.3 
                
  Asia 42.4 40.9 46.6 43.5 42.7 50.3 49.3 
    Middle East 19.2 16.4 24.3 23.2 17.3 26.5 26.7 
      United Arab Emirates 9.4 7.5 14.0 14.1 8.0 11.7 11.0 
      Saudi Arabia 6.9 5.7 6.1 5.8 5.6 7.9 9.0 
      Bahrain 1.0 1.0 2.5 1.6 1.1 4.4 4.4 
    East Asia 18.2 19.6 17.1 15.3 18.2 16.9 15.9 
      Japan 7.9 7.8 5.7 4.9 6.2 6.0 6.1 
      China 2.1 2.5 3.5 2.4 2.4 2.5 3.6 
      Indonesia 1.5 0.8 1.2 2.5 4.9 4.4 2.3 
      Singapore 0.7 2.2 2.2 1.7 1.5 0.8 1.2 
      Korea, Rep. of 1.3 1.6 1.3 1.3 1.1 1.0 0.9 
    South Asia 5.0 5.0 5.1 5.0 7.3 6.8 6.7 
      India 4.3 4.6 4.6 4.3 5.4 5.0 5.8 
      Pakistan 0.5 0.3 0.4 0.7 1.8 1.6 0.8 
                
  Oceania 0.9 1.5 1.2 1.2 0.8 0.6 0.4 
                
  Africa 8.6 11.2 10.1 10.2 11.7 13.4 14.4 
    Sub-Saharan Africa 1.4 1.6 1.9 2.5 2.3 2.5 1.8 
    Other Africa 7.2 9.7 8.3 7.7 9.4 10.9 12.5 
      South Africa 0.0 0.0 7.5 6.3 7.5 8.5 9.8 
      Egypt 0.1 0.7 0.7 1.1 1.2 1.7 1.8 
                
  Other 0.4 0.3 0.4 0.3 0.6 3.3 0.5 
                
Memorandum:               
    EC(25) 32.7 32.9 32.1 26.9 33.4 20.7 25.0 
Source:  WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3 data. EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-115 
 
 
 Table AIII.1 
Products subject to excise duties, 2006  
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-alc oholic 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 original 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 containers holding 2 litres or less K Sh 24/l  
2206.00.19 Other beer not made from malt in containers 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 fermente d beverages 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 contai ners holding 2 litres or le ss K Sh 100 or 65%/l proof 
2208.20.19 Brandy in containe rs holding more than 2 litres K Sh 100 or 65%/l proof 
Table AIII.1 (cont'd) WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-116 
 
 
 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 holding 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 c ontainers holding 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 holding more than 2 litres  K Sh 100 or 65%/l proof 
2208.90.10 Fruit brandy not  made from distilling grape wine or grape 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 grape 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 and white spirit K Sh 8,500/'000 l@20°C 
2710.11.19 Other light oils and pr eparations 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/171/KEN 
 Page A1-117 
 
 
 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 waving 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/171/KEN  Trade Policy Review 
Page A1-118 
 
 
 Table AIII.2  
Products subject to prohibit ion or licensing, February 2006 
Tariff No. SITC Description 
A.  Prohibited imports 
0506.10.00 291.111.00 Ossein and bones treated with acid 
0506.90.00 291.119.00 Other bones and horn-cores, unworked, de fatted, simply prepared (but not cut to shape), 
degelatinized;  powder and waste of these products 
0507.10.10 291.161.10 Ivory, elephant, unworked or  simply prepared but not cut to shape 
0507.10.20 291.161.20 Teeth, hippopotamus, unworked or  simply prepared but not cut to shape 
0507.10.30 291.161.30 Horn, rhinoceros, unworked or simply prepared but not cut to shape 
0507.10.40 291.161.40 Other ivory, unworked or simply prepared but not cut to shape 
0507.10.90 291.161.90 Ivory powder and waste 
0507.90.00 291.169.00 Tortoise-shell, whal ebone and whalebone hair, horns, antle rs, hooves, nails, claws and beaks, 
unworked or simply prepared but not cut to shape;  powder and waste of these products 
0508.00.00 291.150.00 Coral and similar materials, unworked or simply prepared but not othe rwise worked;  shells, of 
molluscs, crustaceans or echinoderns and cuttle-bone , unworked or simply prepared but not cut to 
shape;  powder and waste thereof 
0509.00.00 291.970.00 Natural sponges of animal origin 
2844.50.00 525.170.00 Spent (irradiated) fuel el ements (cartridges) of nuclear reactors 
9601.10.00 899.111.00 Worked ivory and articles of ivory 
9601.90.00 899.119.00 Bone, tortoise-shell, horn, antlers, coral,  mother-of-pear, and other an imal carving material, and 
articles of these materials (incl uding articles obtained by moulding) 
  All other toxic chemical waste 
B.  Restricted imports Authority 
3601.00.00 593.110.00 Propellant products MGD 
3602.00.00 593.120.00 Prepared explosives , other than propellant powders MGD 
3603.00.10 593.210.00 Safety fuse s;  detonating fuses MGD 
3603.00.90 593.290.00 Percussion or detonating caps;   igniters;  electric detonators MGD 
3604.10.00 593.310.00 Fireworks MGD 
3604.90.10 593.331.00 Very (light) flar es and railway signals OP/MENR 
3604.90.20 593.332.00 Rain and anti-hail rockets and bo mbs;  distress and life-saving rockets OP/MENR 
3604.90.90 593.339.00 Other pyrotechnic articles OP/MENR 
8401.10.00 718.710.00 Nuclear reactors MEN 
8401.30.00 718.770.00 Fuel elements (cartridges), non-irradiated MEN 
8401.40.00 718.780.00 Parts of nuclear reactors MEN 
8710.00.00 891.110.00 Tanks and other armoured fighting vehicles, motorized, whether or not fitted with 
weapons, and parts of such vehicles OP 
8906.00.10 793.291.00 Warships OP 
9301.00.00 891.120.00 Milita ry weapons, other than revolvers, pistol s and the arms of heading No. 93.07 OP 
9302.00.00 891.140.00 Revolvers and pi stols, other than those of heading Nos. 93.03 or 93.04 KP 
9303.10.00 891.311.00 Muzzle-loading firearms KP 
9303.20.00 891.312.00 Other sporting, hunting or targ et-shooting shotguns, including combination shotgun 
rifles KP 
9303.30.00 891.313.00 Other sporting, hun ting or target-shooting rifles KP 
9303.90.00 891.319.00 Other firearms KP 
9304.00.00 891.390.00 Other arms (for example, spring, air or gas guns and pistol s, truncheons), excluding 
those of heading No. 93.07 KP 
9305.10.00 891.910.00 Parts of revolvers or pistols KP 
9305.21.00 891.930.00 Shotgun barrels KP 
9305.29.00 891.950.00 Other parts of shotguns or rifles KP 
9305.90.00 891.990.00 Other parts of firearms other th an revolvers, pistols, shotguns or rifles KP 
9306.10.00 891.210.00 Cartridges for riveting or similar tools or for captive-bolt humane fillers and parts 
thereof OP 
9306.21.00 891.220.00 Cartridges KP 
9306.29.00 891.230.00 Parts of shotgun cartridges or airgun pellets KP 
9306.30.10 891.241.00 Other cartridges and parts thereo f, for sporting, hunting or target shooting KP 
9306.30.90 891.249.00 Other cartridges and parts thereof KP 
Table AIII.2 (cont'd) EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-119 
 
 
 Tariff No. SITC Description 
9306.90.10 891.291.00 Bombs, grenades, torpedoes, mines, missiles and similar munitions of war for 
sporting, hunting and target shooting KP 
9306.90.90 891.299.00 Other bomb s, grenades, torpedoes, mines, miss iles and similar munitions of war and 
parts thereof KP 
9307.00.00 891.130.00 Swords, cutlasses, bayonets, lances and similar arms and parts thereof and scabbards 
and sheaths thereof KP 
C.  Imports subject to specified requirements Authority 
0101.11.00 001.511.00 Live pure-bred breeding horses MALD & M 
0101.19.00 001.519.00 Other live horses MALD & M 
0101.20.00 001.520.00 Live asses, mules and hinnies MALD & M 
0102.10.00 001.110.00 Live pure-bred breeding bovine animals MALD & M 
0102.90.00 001.190.00 Other live bovine animals MALD & M 
0103.10.00 001.310.00 Live pure-bred breeding swine MALD & M 
0103.91.00 001.391.00 Other live swine we ighing less than 50 kg. MALD & M 
0103.92.00 001.399.00 Other live swine we ighing 50 kg. or more MALD & M 
0104.10.00 001.210.00 Live sheep MALD& M 
0104.20.00 001.220.00 Live goats MALD& M 
0105.11.00 001.411.00 Live fowls of the species Gallus do mesticus, weighing not more than 185 g. MALD & M 
0105.19.00 001.419.00 Ducks, geese, turkeys and guinea fowls, weighing not more than 185 g. MALD & M 
0105.91.00 001.491.00 Live fowls of the species Gallus domesticus, weighing more than 185 g. MALD & M 
0105.99.00 001.499.00 Ducks, geese, turkeys and guin ea fowls, weighing more than 185 g. MALD & M 
0106.00.10 001.910.00 Other live animals, of a kind mainly us ed for human food, not elsewhere specified MALD & M 
0106.00.20 001.920.00 Other live animals, not elsewh ere specified, for other purposes MALD & M 
0301.10.00 034.111.00 Ornamental live fish FD 
0301.91.00 034.112.00 Live trout FD 
0301.92.00 034.113.00 Live eels FD 
0301.93.00 034.114.00 Live carp FD 
0301.99.00 034.119.00 Other live fish FD 
0306.11.00 036.191.00 Rock lobster and other sea crawfish, frozen FD 
0306.12.00 036.192.00 Lobsters, frozen FD 
0306.13.00 036.110.00 Shrimps and prawns, frozen FD 
0306.14.00 036.194.00 Crabs, frozen FD 
0306.19.00 036.199.00 Othe r crustaceans, including flours, meals a nd pellets of crustaceans fit for human 
consumption, frozen FD 
0306.21.00 036.210.00 Rock lobster and ot her sea crawfish, not frozen FD 
0306.22.00 036.220.00 Lobsters, not frozen FD 
0306.23.00 036.230.00 Shrimps and prawns, not frozen FD 
0306.24.00 036.240.00 Crabs, not frozen FD 
0306.29.00 036.290.00 Othe r crustaceans, including flours, meals a nd pellets of crustaceans fit for human 
consumption, not frozen FD 
0307.10.00 036.310.00 Oysters, whether in shell or not, live, fresh, chilled,  frozen, dried, salted or in brine FD 
0307.21.00 036.351.00 Scallops, live, fresh or chilled FD 
0307.29.00 036.391.00 Other scallops, ex cluding live, fresh or chilled FD 
0307.31.00 036.352.00 Mussels, liv e, fresh or chilled FD 
0307.39.00 036.392.00 Other mussels, excluding live, fresh or chilled FD 
0307.41.00 036.331.00 Cuttle fish and squid, live, fresh or chilled FD 
0307.49.00 036.371.00 Other cuttle fish and squid, excluding live, fresh or chilled FD 
0307.51.00 036.339.00 Octopus, live, fresh or chilled FD 
0307.59.00 036.379.00 Other octopus, excluding live, fresh or chilled FD 
0307.60.00 012.930.00 Snails, other than sea snails FD 
0307.91.00 036.359.00 Other molluscs, including flours, me als and pellets of aqua tic invertebrates other 
than crustaceans, fit for human consumption, live, fresh or chilled FD 
0307.99.00 036.399.00 Other molluscs, excluding live, fresh or chilled FD 
0601.10.00 292.611.00 Bulbs, tubers, tuberous roots, corns, crowns and rhizomes, dormant MALD & M 
Table AIII.2 (cont'd) WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-120 
 
 
 Tariff No. SITC Description 
0601.20.00 292.615.00 Bulbs, tubers, tuberous roots, corns,  crowns and rhizomes, in growth or in flower;  
chicory plants and roots MALD & M 
0602.10.00 292.691.00 Unrooted cuttings and slips of live plants MALD & M 
0602.20.00 292.693.00 Trees, shrubs and bushes, grafted or not , of kinds which bear edible fruit or nuts MALD & M 
0602.30.00 292.695.00 Rhodode ndrons and azaleas, grafted or not MALD & M 
0602.40.00 292.697.00 Roses, grafted or not MALD &M 
0602.91.00 292.698.00 Mushroom spawn MALD & M 
0602.99.00 292.699.00 Other live plan ts (including their roots), cuttings and slips MALD & M 
0603.10.10 292.711.00 Cut flower, fresh MALD & M 
0603.10.20 292.712.00 Flower buds, fresh MALD & M 
0603.90.00 292.719.00 Other cut flowers and flower buds, of a kind suitable for bouquets or for ornamental 
purposes, dried, dyed, bleached, impr egnated or otherwise prepared MALD & M 
0604.10.00 292.721.00 Mosses and lichens MALD & M 
0701.10.00 054.111.00 Potato seed, fresh or chilled MALD & M 
0701.90.00 054.119.00 Potato, other than seed, fresh or chilled MALD & M 
1005.90.00 044.100.00 Maize seed MALD & M 
3808.10.90 591.190.00 Other insecticides MALD & M 
3808.20.00 591.200.00 Fungicides MALD & M 
3808.30.10 598.3100.00 Weed killers MALD & M 
3808.30.90 598.390.00 Other herbicides, anti-sprouting products and plant growth regulators MALD & M 
3808.40.00 598.4100.00 Disinfectants MOH 
3808.90.00 591.490.00 Rodenticides and similar products, put  up in forms or packings for retail sale or as 
preparations or articles (for example, sulphur-treated bands, wicks and candles and 
fly-papers) MOH 
FD  Fisheries Department. 
KP Kenya Police. 
MALD & M Ministry of Agriculture, Li vestock Development, and Marketing. 
MEN Ministry of Energy. 
MENR Ministry of Environment and Natural Resources. 
MGD Mines and Geology Department. 
MOH Ministry of Health. 
OP Office of the President. 
Source:  WTO documents G/LIC/N/3/KEN/2, 3 April 2003 and /Add.1, 12 June 2003;  and G/LIC/N/1/KEN/1, 
12 June 2003. 
 EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-121 
 
 
 Table AIII.3 
Products subject to pre-expo rt verification of conformity to standards, May 2006 
HS code Description 
02 Meat of bovine, swine, sheep or goats, etc;  meat and edible offal fr esh, chilled or frozen 
0302, 0304, 0305, 0306, 0307 Fresh fish or chilled excluding fish fillet;  fish fillet;  fish dried or salted;  crustaceans;  m oluscs 
04 Milk and cream, buttermilk, curdled milk and cream, yogurt, kephir, whey, dairy spreads, cheese 
and curd, bird's eggs, natural honey, edible products of animal origin, etc. 
0710-0714 Vegetables frozen;  dried vegetables;  drie d leguminous vegetables;  manioc, arrowroot, sweet 
potatoes, etc. 
0811-0814 Fruits and nuts, cooked or uncooked or preserved;  fruit dried;  peel of citrus fruits and melons 
fresh, frozen dried or preserved 
0901-0903 Coffee, tea, mate 
10 Wheat and meslin;  rice, maize, barley, ry e, grain sorghum, buckwheat, millet, etc. 
1101-1107 and 1109 Wheat, maize (corn), other cereals flour, pe llets;  flour meal, powders, flakes, malt, wheat gluten, 
etc. 
1507.90.00, 1508.90.00, 1509.90.00, 
1510.00.00, 1511.90.30, 1511.90.40, 
1511.90.90, 1512.19.00, 1512.29.00, 
1513.19.00, 1513.29.00, 1514.19.00, 1514.99.00, 1515.19.00, 1515.29.00, 1515.50.00, 1515.90.00, 1516.10.00, 
1516.20.00, 1517.10.00, 1517.90.00, 
1518.00.00 Animal or vegetable fats and o ils and their cleavage product, ex cluding pig fat (including lard) and 
poultry fat, fats of bovine animals, stearin, fats and oils and their fractions, of fish or marine 
mammals, wool grease and fatty substances, other animal fats and oils and their fractions, crude 
soya bean oil and its fractions, crude ground-nut o il, virgin olive oil, crude palm oil and its 
fractions, palm stearin, crude sunflower-seed, safflower or cott on-seed oil, crude coconut (copra), 
palm kernel or babassu oil, crude rape, colza or mustard oil, other crude fixed vegetable fats and 
oils (including jojoba oil), glycerol, crude;  vege table waxes, degras;  residues resulting from the 
treatment of fatty substances or animal or vegetable waxes 
16 Sausages and similar products;  homogenized preparations (meat);  prepared or preserved meat, 
fish, crustaceans or moluscs, etc. 
17 excluding 1702 Cane or beet sugar and ot her related products;  sugar confectionery 
1803, 1806 Cocoa paste;  chocolate and ot her food preparations containing cocoa 
19 excluding 1901.2010 and 1901.9010 Preparations of cereals, flour, starch or milk; pastry cooks' products, excl uding biscuit powder and 
malt extract 
20 Vegetables, fruits;  nuts and other edible parts of plants prepared or preserved by vinegar or acetic 
acid or other means;  jams, fruit jellies, marmalades and fruit juices 
21 excluding 2106.10.00 and 2106.90.20 Extracts, essences and concentrates of coffee, tea and mate;  yeast;  sauces and preparations thereof;  soups and broths and preparations thereof;  ice cream and other edible ice;  food preparations 
specially for infants 
22 Mineral and aerated waters;  beer;  wine;  ot her fermented beverages;  undenatured ethylalcohol, 
vinegar and vinegar substitutes 
2402-2403 Cigars, cheroots, ciga rillos, cigarette, etc. 
2523-2524 excluding 2523.10.00 White cement, limestone, Portland cement and other mineral substances 
2710.11.10-2710.11.40 and 
2710.19.10-2710.19.39 and 
2710.19.51-2712.10.00 and 
2713.11.00-2716.00.00 Petroleum oils and oils obtained from bituminous minerals;  petroleum gases and jelly, bitumen, 
asphalt, etc. 
2828 and 2833.30.00 Hypochlorites;  alums 
2936 Provitamins and vitamins 
3005 Wadding, gauze, bandages and similar articles 
31 Animal or vegetable fertilizers;  mineral or chemical fertilizers 
3208-3210 Paints and varnishes includi ng enamel, lacquer and distempers 
3213-3215 Colours in sets;  glaziers' putty, etc;  printing, writing, drawing ink and other inks 
3303-3307 Perfumes and toilet waters;  beauty and make  up preparations (skin care);  shampoos;  relaxers; 
preparations for oral and dental hygiene;  pre-sh ave, shave and after-shave preparations;  personal 
deodorants;  bath preparations, etc. 
3401, 3403 and 3405-3407 
excluding 3405.40.00 Soap;  organic surface-active products and preparations for use as soap;  lubricating preparations;  
polishes and creams for footwear, furniture, etc;  modeling pastes 
3501, 3502, 3505.20.00, 3506.10.00 Casein;  albumins;  ge latin;  prepared glues and other prepared adhesives 
3605-3606 Matches, other than pyrotechnic articles;  liquid or liquefied-gas fuels in containers, etc. 
3702.51-3702.56 Photographic films in rolls 
 Table AIII.3 (cont'd)WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-122 
 
 
 HS code Description 
3808.40.00 Disinfectants 
3811, 3813, 3814, 3815 and 3817-
3820 Anti-knock preparations;  preparations for charges and fire- extinguishers;  refractory cements; hydraulic brake fluids;  anti-freezing prepar ations;  other water treatment chemicals 
3917-3918 and 3922 Tubes, pi pes and hoses and fittings thereof;  floor cove ring of plastics;  baths and shower baths;  
sinks, wash-basins, bidets, lavatory pans, etc;  fl ush cisterns and other simi lar sanitary ware, etc. 
3925-3926.30 and 3926.90.00 Reservoir, tanks, va ts and similar containers (plastic);  builders' wares of plastic, e.g. doors, 
windows, blinds, shutters, etc;  other articles of  plastic, e.g. floats for fishing nets, etc. 
4009 Tubes, pipes and hoses of vulcani zed rubber other than hard rubber 
4010.31-4010.39 Transmi ssion belts or belting 
4011 New pneumatic tyres 
4012.11.00, 4012.12.00, 4012.13.00, 4012.19.00, 4012.20.00, 4012.90.90 Retreaded or used new pneumatic tyres of rubber, etc. 
4013 Inner tubes of rubber 
4014.10.00 Sheath contraceptives 
4014.90.00-4016.99. 00 Hygienic or pharmaceutical articles of vulcani zed rubber;  articles of apparel and clothing 
accessories of vulcanized rubber and others 
4104-4115 Tanned or crust hides and skins of bovine;  leather further prepared after tanning or crusting;  
chamois leather 
42 Trunks, suit- cases, vanity cases, executive cases, brief cases, school satchels, etc;  articles of 
apparel and clothing accessories of leather or of composition leather 
4302-4304 Tanned or dre ssed fur skins;  articles of apparel, clothi ng, accessories and other articles of fur skins 
4408 -4421 excluding 4415 Sheets for veneering;  wood strips for parquet flooring;  particleboa rd;  fiberboard;  plywood and 
panels, etc. 
4504 Agglomerated cork and articles of agglomerated cork 
46 Plaits and similar products of plaiting material s;  basketworks, wicker work and other articles 
4802.56.00, 4802.62.00, 4802.69.00, 
4803, 4804.19.90, 4804.29.00, 
4804.59.00, 4805.19.00, 4808.90.00, 4810.19.00, 4810.29.00, 4810.39.00, 
4810.99.00, 4811.49.00, 4814.90.00, 
4816.10.00, 4816.90.00, 4817 and 4818, 4821.10.90, 4823.19.00, 
4820.20.20, 4823.90.90 Uncoated paper and paperboard of size not exceeding 435 mm x 297 mm;  other uncoated paper 
and paper boards, other paper a nd paper boards coated on both si de with kaolin, paper board 
cellulose wadding, etc., wall paper, toilet paper and similar paper tissue pa per;  carbon paper and 
similar copying paper, et c, envelopes, letter cards, postcards, wallets, etc;  exercise books, etc. 
5007 Woven fabrics of silk or silk waste 
5111 -5113 Woven fabrics of carded wool or of fine or combed animal hair ;  woven fabrics of coarse animal 
hair 
5204 Cotton sewing thread 
5208-5211 Woven fabrics of cotton less than 85% cotton 
5212 excluding 5212.11.00 and 
5212.21.00 Other woven fabrics of cotton 
5309-5311 Woven fabrics of flax;  woven fabrics of jute, etc. 
5401 Sewing thread of man made filaments 
5407-5408 Woven fabric of synthetic  filament yarn;  woven fabric  of artificial filament yarn 
5508 Sewing thread of man-made stale fibers 
5512-5516 Woven fabrics of synthetic  and artificial stale fibers 
5601 excluding 5601.30.00 Wadding of tex tile materials and articles thereof 
5602-5603, 5607-5609 Felt and non-woven whether or not impregnated, coated, covered or laminated, twine cordage, roes 
and cables;  knotted netting of twine, cordage or roe;  articles of yam 
57 Carpets and other textile floor coverings 
5801 -5806 Woven pile fabrics and chenille  fabrics;  terry toweling and sim ilar woven terry fabrics;  gauze, 
tulles, nets, and narrow woven fabrics 
5808-5811 Braids in the piece, woven fa brics of ornamental thread, embroi dery in the piece, quilted textile 
products  
5901 Textile fabrics coated with um or amylaceous substances  
 Table AIII.3 (cont'd)EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-123 
 
 
 HS code Description 
5903-5905 and 5907-5911 Textile fabr ics impregnated coated covered or laminated with plastics;  linoleum;  textile wall 
covering;  textile hose piping;  textile pr oducts and articles for technical uses, etc.  
6001-6006 Pile fabrics;  knitte d or crocheted fabrics;  war knit fabrics and others  
6101-6217 Men's or boys' overcoat, anorak, etc;  men's or boys' suits, jackets, etc;  women's or girls' suits, 
jackets, etc;  men's or boys' shirts knitted or croc heted, underpants, pajamas, etc;  women's or girls' 
blouses, shirts, petticoat, slips, panties, etc;  t-shirts, jersey, baby garments, truck suits;  
handkerchief;  shawls, etc.  
63 Blankets ;  bed linen, table linen, etc;  curtai ns and other furnishing articles including mosquito 
nets;  sacks and bags;  tarpaulins, awnings and su n blinds, tents;  other made up articles including 
dress patterns- life jackets, life belts, floor cloths , dish cloths and other similar cleaning cloths;  
used clothing  
6401-6405 Footwear  
65 Headgear and arts thereof  
6601-6602 Umbrellas, walk sticks, etc.  
6801-6803 and 6806-6812 Worked monumental or building stone;  articles of asphalt, plaster, cement, cement-asbestos, etc.  
6901 Bricks, blocks, tiles and other ceramic goods  
6904-6914 Ceramic building bricks, floori ng blocks, support or filler tiles, etc;  roofing tiles;  unglazed or 
glazed ceramic flags and paving, hearth or wall tiles;   ceramic ware for laboratories;  tableware and 
kitchen ware of porcelain;  ceramic sinks, etc;  and other ceramic articles  
7003-7009 Cast, drawn, float,  rolled, blown, safety and surface ro und or polished lass;  glass mirrors  
7012 - 7017 and 7020 Glass inners for vacuum fl asks or similar articles;  glass ware' used for kitchen, table, etc; signaling 
glassware and optical elements of glass;  pavi ng blocks;  laboratory, hy gienic or pharmaceutical 
glassware;  float for fishing nets  
7203 Ferrous products obtained from direct reducti on of iron ores and other spongy ferrous products  
7213-7216 Bars and rods (hot or cold rolled);  angl es, shapes and sections of iron or non-alloy steel  
7217.10.00, 7217.20.00, 7217.30.90, 
7217.90.00 Wire of iron and non-alloy steel  
7219-7223 Flat rolled products of stainless steel;  wire of stainless steel;  ba rs and rods (hot rolled);  angles, 
sections and shapes of stainless steel  
7225- 7227 and 7229 Flat rolled products of othe r alloy steel;  wire of other alloy steel  
7301 Sheet piling, angles, shapes and sections of iron or steel  
7303-7309 and 7311-7314, 7315.12.00, 7315.82.00 and 
7315.89.00 and 7316-7319-7326 Tubes, pipes and hollow profiles, seamless of cast iron, iron or steel and others;  tube or pipe 
fittings of iron or steel;  structures ;  reservoirs, tanks, vats and similar containers for any material of 
iron or steel;  containers of compressed or liquefied  gas;  stranded wire, rope, cables, barbed wire of 
steel or iron;  cloth, grill, netting,  fencing of iron or steel wire;  an chors, grapnels;  nails;  screws, 
nuts, bolts, coach screw, screw hooks, rivets, washers and other lock washers, cotter and cotter pins;  sewing/knitting needles, etc;  leaf springs;  stove s, cookers;  radiators for central heating;  
household items of iron or steel or steel wool, etc;  sanitary ware of iron or steel e.g. sinks and wash 
basins;  other cast articles of iron or steel;  we lded link chains and other chains not mentioned 
elsewhere  
7403 Refined copper and copper alloy  
7405,7407-7419 Master alloys of copper;  bars, rods, profile s, wire, plates, sheets, strips, tubes, tubes and pipe 
fittings, stranded wire, cables, nails, tacks, dr awing pins, grill and netting of copper;  copper 
springs;  non-electric cooking or heating apparatus of cooper, etc.  
7505-7508 Nickel bars, rods, profile, wire, plates, sheets, foils, tubes, pipes and fittings, etc.  
7604-7605,7608-7611 and 7613- 7616 Bars, rods, profiles, wire, tubes, tubes and pipe fittings, stranded wire, cables, nails, foils, tacks, 
screws, reservoirs, tanks, structures, containers  for liquefied gas, household articles, grill and 
netting of aluminum  
7803-7806 excluding 7804.20.00 Lead bars, profiles, wires, rods, sheet, strips, foils, plates, tubes, tubes and pipe fittings, etc. 
7904-7907 Zinc bars, profiles, wires, rods, sheet, strips , foils, plates, tubes, tubes and pipe fittings, etc.  
8003-8004 and 8006-8007 Tin bars, profiles, wires, rods, sheet , strip, plates, tubes, tubes and pipe fittings, etc.  
8101.95.00-8101.96.00 Bars, foils, rods, sheets, plates, profiles, wire of tungsten, etc.  
8102.95.00-8102.96.00 Bars, foils, rods, sheets, plates, profiles, wire of molybdenum, etc.  
8201-8215 excluding 8207.20.00 Hand tools, e.g. spades, shovels, mattoc ks;  hoes, forks, etc;  hand saws, files, rasps, pliers;   hand 
operated tools, e.g. spanners, etc;  knives, razo r blades and others;  spoons, forks, skimmers, etc.  
 Table AIII.3 (cont'd)WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-124 
 
 
 HS code Description 
8301- 8304, and 8311 Padlocks and locks;  base metal mountings, fittings and simila r articles for furniture, doors, etc;  
filing cabinets  
8415, 8418.10-8418.99, 8421.1200, 
8422.11.00, 8423.10.00, 8423.81.00, 
8424.10.00, 8424.81.00, 8443, 
8447.20.20, 8452.10.00, 8467, 8469,8470, 8471, 8472, 8473, 8476, 
8481, 8482, 8483, 8484 Air conditioning machines, refrigerators, freezers and other refrigerating or freezing equipment;  
clothes dryers, dish washing machines of th e household types;  personal weighing machines, 
including baby scales;  household sc ales, other weighing machines, fire extinguishers;  agricultural 
and horticultural sprayers (e.g. knapsack sprayers);   printing machinery, sewing machines of the 
household type, tools for working in the hand, pneum atic, hydraulic or with self-contained electric 
or non-electric motor;  typewriter;  calculating m achines;  automatic data processing machines and 
units thereof;  magnetic or optical readers, machin es for transcribing data onto data media in coded 
form and machines for processing such data, not el sewhere specified or included. e.g. computers, 
printers, etc;  other office machines and parts and accessories;  automatic goods-vending machines 
taps, cocks, valves and similar appliances for pipe s, boiler shells, tanks, vats or the like, including 
pressure-reducing valves and thermostatically controlled valves;  ball or roller bearings;  
transmission shafts;  gaskets and similar joints  
8501-8513 and 8515-8548 excluding 
8542 Electric motors, generators, generating sets and rotary converters and accumulators;  electrical transformers, electro-magnets, primary cells and ba tteries, electro-mechanical domestic appliances, 
shavers, hair clippers, etc;  sparking plugs, ign ition magnetos, ignition coils, starter motors and dual 
starter generators;  electrical lighting and signa ling equipment, miners safety lamps and other 
portable electric lamps;  soldering irons and guns;  storage water heater and immersion heaters, 
hand dryers, hand drying apparatus and other household electric products; telephone sets and 
facsimile machines;  speakers, a udio- visual equipment;  transmission apparatus, semi- conductors 
and other electrical equipm ents and parts thereof  
8708 Parts and accessories of motor vehicles (new)  
8712 Bicycles and other cycles not motorized  
8714-8715 Parts and accessories of vehicles;  baby carriages and arts thereof  
9008  Image projectors and photocopying apparatus  
91 Wristwatches, pocket watches and other watches;  clocks, watch cases and arts thereof  
92 Musical instruments e.g. pianos, accordion and arts thereof  
9401, 9403, 9404, 9405 Seats and parts thereof;  other furniture and parts thereof;  mattress supports, articles of bedding and  
similar furnishings;  lams and lighting fittings  
9501-9503, 9506 and 9507 Wheeled toys and other toys, dolls;  fi shing rods and hooks;  article s and equipment for general 
physical exercise and sorts, etc. 
9601-9605 and 9608-9617 Brooms, brushes, hand sieves;  ballpoint pens, felt pens, fount ain pens, pencils, pastels, drawing, 
charcoal, date sealing and numbering stamps, ty pewriters and similar ribbons, cigarette lighters, 
smoking pipes, combs, scent sprays and similar toilet sprays, vacuum flasks 
Other All used road vehicles (as defined by KS 1515) 
Source:  Kenya Bureau of Standards. EAC-Kenya WT/TPR/S/171/KEN 
 Page A1-125 
 
 
 Table AIV.1 
Summary of Kenya's specific commitments in services 
Mode of supply 
Sector or subsector  Cross-border
supply Consumption 
abroad Commercial 
presence Presence of 
natural persons
 Market access/National treatment 
2. COMMUNICATION SERVICES     
C. Telecommunication services     
For public use     
(a)  Voice telephone service 
(b)  Telex services 
(c)  Telegraph services 
(d)  Facsimile services (e)  Private leased circuit services Nlex/NL NLex/NL R/N Uex/Uex 
For public use     
(b)  Packet-switched data transmission services (c)  Circuit-switched data transmission services NL/NL NL/NL R/NL Uex/Uex 
For non-public use      
Services supplied to closed users group (a)  Voice telephone services 
(b)  Packet-switched data transmission services 
(c)  Circuit-switched data transmission services (d)  Telex services (e)  Telegraph services 
(f)  Facsimile services Nlex/NL NLex/NL NLex/NL Uex/Uex 
Value added services NL/NL NL/NL NLex/NL Uex/Uex 
(h) Electronic mail (i) Voice mail 
(j) On-line information and database retrieval 
(k) Electronic data interchange 
(l) Enhanced/value-added facsimile services, including 
 store and forward, store and retrieve (m) Code and prot ocol conversion 
(n) On-line information and /o r data processing (including 
 transaction processing)     
Other     
Internet and internet access services NL/NL NL/NL NLex/NL Uex/Uex 
Satellite based Nlex/NL NLex/NL NLex/NL Uex/Uex 
Mobile services 
Cellular/mobile telephone 
Mobile data services Personal communications services 
Paging     
Terrestrial based OP/NL OP/NL OP/NL Uex/Uex 
Mobile services Cellular/mobile telephone 
Mobile data services Personal communications services 
Paging 
Fixed satellite services (for public use)  
 
  
 
OP/NL   
  
 
OP/NL   
  
 
NLex/NL   
  
 
Uex/Uex 
D. Audiovisual services     
(a) Motion picture and vide o tape production services 
 (excluding distribution services) NL/NL NL/NL U/U Uex/U 
(b) Motion picture projection services Utf/Utf NL/NL NL/NL Uex/U 
7. FINANCIAL SERVICES     
A. Insurance and insurance related services     
(a)   Life insurance U/U U/U OP/NL Uex/Uex  
(b)   Non-life UexSP/U U/NL OP/U Uex/Uex 
(c)   Broking U/U OP/N OP/NL Uex/Uex 
(d)  Agency services UexSP/NL U/U R/U Uex/Uex 
(e)   Auxiliary services, assessors, intermediaries and loss
 adjustors NL/NL NL/NL NL/NL Uex/Uex 
(f)   Reinsurance and retrocession (all classes) R/NL R/NL R/NL Uex/ Uex 
Table AIV.1 (cont'd)WT/TPR/S/171/KEN  Trade Policy Review 
Page A1-126 
 
 
 Mode of supply 
Sector or subsector  Cross-border
supply Consumption 
abroad Commercial 
presence Presence of 
natural persons
 Market access/National treatment 
B. Banking and other financial services     
(a) Acceptance of deposits and other repayable funds from 
 the public NL/U NL/NL OP/U Uex/Uex 
(b) Lending of all types, including consumer credit, 
 mortgage credit, factoring and financing of commercial 
 transactions NL/NL NL/NL NL/U Uex/Uex 
(c)   All payments and money transmission NL/NL NL/NL NL/U Uex/Uex 
(d) Guarantees and commitments NL/U NL/NL NL/U Uex/Uex 
(e) Participation in issues of  all kinds of securities and 
 provision of services related to such issues except  underwriting R/U NL/NL R/U Uex/Uex 
(f) Asset management except pension fund management NL/U NL/NL R/U Uex/Uex 
(g) Advisory and other auxiliary financial services NL/NL NL/NL NL/U Uex/Uex 
9.   TOURISM AND TRAVEL RELATED SERVICES     
A.   Hotels and restaurants (including catering) Utf/Utf NL/NL NL/NL Uex/OP 
B.   Travel agencies and tour operators services NL/NL NL/NL NL/NL Uex/OP 
C.   Tourist guides services NL/NL NL/NL NL/NL Uex/OP 
11.   TRANSPORT SERVICES     
C. Air transport services     
(a)   Aircraft repair and maintenance services  Utf/Utf NL/NL NL/NL Uex/U 
(b) Selling and marketing of air transport services NL/NL NL/NL OP/OP Uex/U 
(c) Computer reservation systems (CRS) services NL/NL NL/NL U/U Uex/U 
F.   Road transport services     
(a) Passenger transportation NL/NL U/NL U/U Uex/OP 
(b) Freight transportation NL/NL NL/NL U/U Uex/U 
(c) Rental of commercial vehicles with operator NL/NL NL/NL U/U Uex/U 
(d) Maintenance and repair of road transport equipment Utf/Utf NL/NL U/U Uex/U 
(e)   Supporting services for road transport services NL/NL NL/NL U/U Uex/U 
12.  OTHER SERVICES NOT INCLUDED 
 ELSEWHERE     
 Meteorological data informa tion NL/NL NL/NL U/U Uex/OP 
NL: No limitations, i.e. Kenya agreed to place no constraints on the item in question. 
NLex: No limitations with exceptions. 
U: Unbound, i.e Kenya made no engagements with respect to the item in question. 
Uex: Unbound, except as provided by  Kenya's horizontal commitments. 
UexSP: Unbound, except as provided by Kenya's horizont al commitments, and/or special provisions apply. 
Utf: Unbound due to lack of technical feasibility. 
R: Restriction 
OP: Other provisions apply. 
Source: WTO documents GATS/SC/47, 15 April 1994;  /Suppl.1,  26 February 1998;  and /Suppl.2, 18 November  1999.