Economy of Kenya

Theeconomy of Kenyaismarket-basedwith a few state enterprises. Kenya has an emerging market and is an averagely industrialised nation ahead of itsEast Africanpeers. Currently a lower middle income nation, Kenya plans to be a newly industrialised nation by 2030. The major industries driving the Kenyan economy include financial services, agriculture, real estate, manufacturing, logistics, tourism, retail and energy. As of 2020,Kenyahad the third largest economy inSub-Saharan Africa, behindNigeriaandSouth Africa. Regionally, Kenya has had a stronger and more stable economy compared to its neighboring countries within East Africa.By 2023, the country had become Africa's largest start-up hub by both funds invested and number of projects.
The government of Kenya is generally investment-friendly and has enacted several regulatory reforms to simplify foreign and local investment, including the creation of anexport processing zone. An increasingly significant portion of Kenya's foreign financial inflows areremittancesby Kenyans in the Diaspora, who work in theUnited States, theMiddle East,EuropeandAsia.According to data by the Central Bank of Kenya,remittances from Kenyans living abroad make up over 3.4 percent of the Gross Domestic Product (GDP).
As of September 2018, economic prospects were positive, with above 6%gross domestic product (GDP)growth expected.This growth was attributed largely to expansions in the telecommunications, transport, and construction sectors; a recovery in agriculture; and the rise of small businesses helping to pull the economy. These improvements are supported by a large pool of highly educated professional workers. There is a high level of IT literacy and innovation, especially among young Kenyans.
In 2020, Kenya ranked 56th in the World Bankease of doing businessrating, up from 61st in 2019 (of 190 countries).Compared to its neighbours, Kenya has a well-developed social and physical infrastructure.
Between 70 AD and 1500 AD, trade routes — spanning Africa, Asia and Europe — integrated the Kenyan coastal strip into the world economy.Foreign merchants would bring their merchandise to the Kenyan coast and leave with African goods.
In 1499 AD,Vasco da Gama, a Portuguese explorer, returned to Europe after discoveringthe sea route to Indiathrough South Africa.This new route allowed European nations to dominate the trade economy of the East African coast, with thePortugueseentrenching themselves in the 16th and 17th centuries.In the 18th century, the Portuguese were replaced in this East African economic corridor byOmani Arabs.Eventually, the British replaced the Omani Arabs. In 1895 they dominated the coastal strip; by 1920, they had followed the interior trade routes all the way to theBuganda Kingdom.To make this ancient economic trade route more profitable, the British used Indian labourers to build a railway fromMombasaat the coast toKampala, the capital of Buganda kingdom, following old trade routes.Major towns were founded along the railway line, backed by European settler farming communities. The Indian labourers who did not return toIndiaafter railway construction ended were the first to establish shops (dukawallahs) in these towns.
During the colonial period, the European settler farming community and the Indian dukawallahs established the foundations of the modern formal Kenyan economy.Prominent examples of Asian-Kenyan business owners whose businesses started as dukawallahs includeManu ChandariaandMadatally Manji.While Europeans and Indians enjoyed strong economic growth between 1920 and 1963, Africans were deprived of their land, dehumanised, and forced to work for minimal pay under extremely poor working conditions through a well-established system of racial segregation.
Kenya gained its independence in 1963. Under PresidentJomo Kenyatta, the Kenyan government promotedafricanisationof the Kenyan economy,generating rapid economic growth through public investment, encouragement ofsmallholderagricultural production, and incentives for private, often foreign, industrial investments. An influential sessional paper authored byTom MboyaandMwai Kibakiin 1965 stressed the need for Kenya to avoid both the capitalistic economy of the West and the communism of the East.The paper argued that Kenya should instead concentrate on African socialism, while avoiding linking Kenya's economic fortunes to any country or group of countries.From 1963 to 1973, GDP grew at an annual average rate of 6.6%; during the 1970s, it grew at an average rate of 7.2%. Agricultural production grew by 4.7% annually in the same period, stimulated by redistributing estates, distributing new crop strains, and opening new areas to cultivation. However, the rate of GDP growth declined to 4.2% per year in the 1980s, and 2.2% a year in the 1990s.
Kenya's policy ofimport substitution, which started in 1946 with European and Asian enterprises, did not achieve the desired result of transforming Kenya's industrial base. In the late 1970s, rising oil prices began to make Kenya's manufacturing sector noncompetitive.In response, the government began a massive intervention in the private sector. Lack of export incentives, tight import controls, and foreign exchange controls made the domestic environment for investment even less attractive.
In the 1980s and 1990s, Kenya signed structural adjustment loans with the World Bank and IMF, the loans were to be given on the condition that Kenya adopts government reforms, a liberal trade and interest rate regime, and an outward-oriented industrial policy, among other reforms.The Kenyan economy performed very poorly during this era of World Bank and IMF-driven liberalisation at the height ofDaniel Arap Moiadministration.
From 1991 to 1993, Kenya had its worst economic performance since independence. Growth in GDP stagnated, and agricultural production shrank at an annual rate of 3.9%. Inflation reached a record of 100% in August 1993, and the government's budget deficit was over 10% of GDP.As a result of these issues, bilateral and multilateral donors suspended their aid programmes in Kenya in 1991.
In 1993, the Kenyan government began a major programme of economic reform andliberalisation. A new minister of finance and a new governor of thecentral bankundertook a series of economic measures with the assistance of theWorld Bankand theInternational Monetary Fund(IMF). The government eliminatedprice controlsand import licensing, removedforeign exchange controls,privatiseda number of publicly owned companies, reduced the number of civil servants, and introduced conservative fiscal and monetary policies. From 1994 to 1996, Kenya's real GDP growth rate averaged just over 4% a year.
In 1997, however, the economy entered a period of slow growth, due in part to adverse weather conditions and reduced economic activity before the general elections in December 1997. In July 1997, the Government of Kenya refused to meet earlier commitments to the IMF ongovernancereforms.As a result, the IMF suspended lending for three years, and the World Bank put a $90 millionstructural adjustmentcredit on hold.
The Kenyan government subsequently took positive steps on reform, including the establishment of theKenya Anti-Corruption Authorityin 1997. The state also implemented measures to improve the transparency of government procurement and reduce the government payroll. In July 2000, the IMF signed a $150 million Poverty Reduction and Growth Facility, and theWorld Bankfollowed shortly after with a $157 million Economic and Public Sector Reform credit. However, both were eventually suspended.Despite setbacks, the process of reform established Kenya as East Africa's economic powerhouse and the region's business hub.
Economic growth improved between 2003 and 2008, under theMwai Kibakiadministration.When Kibaki took power in 2003, he immediately established the National Debt Management Department at the treasury, reformed theKenya Revenue Authority(KRA) to increase government revenue, reformed financial laws on banking, wrote off the debts of strategic public enterprises, and ensured that 30% of government tax revenue was invested in economic development projects. With these reforms, driven by theNational Rainbow Coalitiongovernment, the KRA collected more tax revenue in 2004 than was anticipated. The government then initiated investments in infrastructure. By 2005, the Kenyan public debt had reduced from highs of 80% of GDP in 2002 to 27% of GDP in 2005. The financial sector greatly improved, andEquity Bank Kenyabecame one of the largest banks in East Africa. Economic growth improved from 2% in 2003 to 7% in 2007.In 2008, the growth slumped to 1%due topost-election violencebefore returning to an average of 5% between 2009 and 2013.However, in 2009, due to drought and the global financial crisis, high input costs as well as a fall in demand for some of the country's exports caused the agriculture sector to contract by 2.7%.
Between 2013 and 2018, under theJubilee Partygovernment led byUhuru Kenyatta, the GDP growth averaged above 5%.Growth in small businesses is credited with some of the improvement.Real GDP growth (annualised) was 5.7% in Q1 of 2018, 6.0% in Q2 2018 and 6.2% in Q3 2018.Despite this robust growth, concerns remained about Kenya's debt sustainability, current account deficit, fiscal consolidation and revenue growth.
The table below shows the GDP of KenyaestimatedArchived11 June 2010 at theWayback Machineby the International Monetary Fund, with exchange rates forKenyan shillings.
Vision 2030 is Kenya's current blueprint for its economic future, with the goal of creating a prosperous, globally-competitive nation with a high quality of life by 2030. The plan aims to transform Kenyan industry and environment in three pillars: economic, social, and political.
Vision 2030 seeks economic growth averaging greater than 10% for 23 years, beginning in the year 2007. Economic areas targeted are tourism, agriculture, wholesale and retail trade, manufacturing, IT-enabled services, and financial services.
To improve the quality of life for Kenyans, Vision 2030 aims to improve human and social welfare programmes, specifically education and training, health, environment, housing and urbanisation, children and social development, and youth and sports.In 2018, PresidentUhuru Kenyattaestablished theBig Four Agenda, focusing on universal healthcare, manufacturing, affordable housing and food security.
The political pillar envisions a "democratic system that is issue-based, transparent, people-centred, results-oriented, and accountable to the public". It targets five main areas: the rule of law under theConstitution of Kenya, electoral and political processes, democracy and public service delivery, transparency and accountability, and security, peace building, and conflict management.
The currentConstitution of Kenyawas inaugurated on 27 August 2010 to drive this pillar.
Kenya's currency is printed by mandate of theCentral Bank of Kenya.The bank began printing banknotes in 1996. Several versions of Kenya's banknotes and coinage have been circulated since then. The most recent redesign of Kenya's currency was in 2019.
Theexchange rateof the Kenyan Shilling between 2003 and 2010 averaged about KSh74-78 per US Dollar.
The average inflation between 2005 and July 2015 was 8.5%.In July 2015 Kenya's inflation rate was estimated to be 6.62%.
In 2006, Kenyan government revenue totalled US$4.448B and its estimated expenditures totalled US$5.377B. The government budget balance as a percentage of the gross domestic product improved to −2.1% in 2006 from −5.5% in 2004.
In 2012, Kenya set a budget of US$14.59B with a government revenue of approximately US$12B.
The 2018 budget policy report set a budget of US$30B. The government revenue was approximately US$29.5B, and a deficit of US$5B was borrowed.
In the financial year that ended in June 2020, theKenya Revenue Authoritycollected a tax revenue that amounted to approximately US$15B.
From 1982, Kenya key public debt indicators rose above critical levels, both measured as a percentage of GDP and as a percentage of government revenue.
In 2002, the last year ofDaniel arap Moi's administration, Kenya' s public debt stood at almost 80% of GDP. In the last 10 years of the Moi regime, the government was spending 94% of all its revenue on salaries and debt servicing to the IMF, World Bank and other western countries.
In 2003,Mwai Kibaki's administration instituted a public debt management department within the treasury department to bring Kenya's debt down to sustainable levels.
In 2006, Kenya had a current account deficit of US$1.5B. This figure was a significant increase over 2005, when the current account had a deficit of US$495 million. In 2006, the current account balance as a percentage of gross domestic product was −4.2.
In 2006, Kenya's external debt totalled US$6.7B. With a GDP of US$25.83B in 2006, the public debt level stood at 27% of GDP.
In 2011, the national treasury noted that the debt was rising, growing to 40% of GDP in 2009 and to 54% of GDP by 2012.
In 2019, Kenya's debt had risen to an absolute amount of US$50B against a GDP of US$98B. The public debt level was 51% of GDP in 2019.
In 2021, Kenya's debt had risen to an absolute amount of US$65B against a GDP of US$101B.The public debt level was 65% of GDP in 2021.
Kenya's largest bilateral lender since 2011 has beenChina, and the largest multilateral lender since 1963 has been theWorld Bank.
As part of its efforts to manage and diversify its financing strategies, the Kenyan government, with assistance from the World Bank, plans to issue Africa’s firstsustainability-linked bondby November of this year. This bond, aimed at raising $500 million, will support the general budget while aligning with pre-determined performance goals in environmental, social, health, and energy sectors. The issuance is part of a broader strategy to address an expectedbudget deficitof 3.9% of GDP for the fiscal year ending June 2025 and represents a significant development in sustainable financing on the continent.
TheKenya Economic Stimulus Programmewas introduced in the 2010–2011 budget plan.The initiative aimed to stimulate economic activity in Kenya through investment in long-term solutions to food insecurity, rural unemployment and underdevelopment. Stated improvement objectives included regional development for equity and social stability, infrastructure, education, affordable health-care, environmental conservation,information and communications technologycapacity, and access to IT.
The Integrated Financial Management Information System (IFMIS) was launched in 2003 as a digital platform for Kenya's financial information and services, and was later re-engineered by the Ministry of Finance to curb fraud and other malpractices.IFMIS enables integrated budget planning, being linked to planning policy objectives and budget allocation.
The Fund for the Inclusion of Informal Sector (FIIS) is a fund that allows businesses in the informal economy to access credit financing and other facilities, including financial and banking services.
The Investor Compensation Fund compensates investors who suffer losses from breaches of duty by a licensed stockbroker or dealer, up to a maximum of Sh.50,000 per investor.
Foreign investments in Kenya remain relatively weak considering the size of its economy and its level of development. As of 2022, Kenya's total FDI stock stood at USD 10.4 billion, accounting for a mere 9.5% of the country’s GDP.
Investments come from China, Japan, Russia, the United States, and the United Kingdom, among others. Kenya hosts a number of foreign multinational companies and international organisations such as theUnited Nations Environment Programme.China's investments have been increasing, while those of western countries such as the United Kingdom has fallen significantly. Investments from multilateral agencies, particularly theWorld Bankand theEuropean Development Fund, have also increased. The most active investors currently are theChinese.
Kenya is active within regional trade blocs such as theCommon Market for Eastern and Southern Africaand theEast African Community, a partnership ofKenya,Uganda,Tanzania,Rwanda,BurundiandSouth Sudan. The aim of the latter is to create a common market of its member states modelled on theEuropean Union.Among the early steps toward integration is the bloc'scustoms union, which has eliminated duties on goods and non-tariff trade barriers among members.
Kenya's chief exports are horticultural products and tea. In 2005, the combined value of these commodities was US$1,150 million, about 10 times the value of Kenya's third most valuable export, coffee. Kenya's other significant exports are petroleum products, fish, cement, pyrethrum, and sisal. The leading imports are crude petroleum, chemicals, manufactured goods, machinery, and transportation equipment. Africa is Kenya's largest export market, followed by the European Union.
The major destinations for exports are Uganda, Tanzania, the United Kingdom, and the Netherlands. Major suppliers are China, India, theUnited Arab Emirates, Saudi Arabia, and South Africa. Kenya's main exports to the United States are garments traded under the terms of the African Growth and Opportunity Act. Notwithstanding this, Kenya's apparel industry is struggling to hold its ground against Asian competition and runs a trade deficit with the United States. Many of Kenya's problems relating to the export of goods are believed by economists to be caused by the fact that Kenya's exports are inexpensive items that do not bring substantial amounts of money into the country.
Kenya is the dominant trade partner for Uganda (12.3% exports, 15.6% imports) andRwanda(30.5% exports, 17.3% imports).
Kenya typically has a substantial trade deficit. The trade balance fluctuates widely because Kenya's main exports are primary commodities subject to the effects of both world prices and weather. In 2005 Kenya's income from exports was about US$3.2 billion. The payment for imports was about US$5.7B, yielding a trade deficit of about US$2.5B.
Kenyan policies on foreign investment generally have been favourable since independence, with occasional tightening of restrictions to promote the africanisation of enterprises. Foreign investors have been guaranteed ownership and the right to remitdividends,royalties, and capital.
Kenya is currently the most important source of foreign direct investments in Uganda and Rwanda. Uganda and its neighbouring regions are the main export destinations for Kenyan products.Kenya has had more success in growing its economy and quality of life levels than many of its neighbours insub-Saharan Africa.
Kenya produced in 2018:
Agriculture is the second largest contributor to Kenya's GDP, after the service sector, although only 15% of Kenya's total land area has sufficientfertilityand rainfall to be farmed, and only 7 or 8% can be classified as first-class land. In 2006, almost 75% of working Kenyans made their living on the land, compared with 80% in 1980.About half of total agricultural output is non-marketed subsistence production.
In 2005, agriculture, includingforestryand fishing, accounted for about 24% of GDP, as well as for 18% of wage employment and 50% of revenue from exports. That same year, horticulture accounted for 23% and tea for 22% of total export earnings. The principal cash crops in Kenyan agriculture are tea, horticultural produce, and coffee. Coffee has declined in importance with depressed world prices, accounting for just 5% of export receipts in 2005. The production of major food staples such ascornis subject to sharp weather-related fluctuations. Production downturns also periodically necessitate food aid. In 2004, aid was needed for 1.8 million people because of Kenya's intermittentdroughts. However, the expansion of credit to the agricultural sector has enabled farmers to better deal with environmental and pricing risks.
Tea, coffee,sisal,pyrethrum, corn, and wheat are grown in the fertile highlands, one of the most successful agricultural production regions in Africa. Livestock predominates in the semi-arid savanna to the north and east.Coconuts,pineapples,cashew nuts, cotton,sugarcane,sisal, andcornare grown in the lower-lying areas.
Resource degradation has reduced output from forestry. In 2004,roundwoodremovals came to 22,162,000 cubic meters. Fisheries are of local importance aroundLake Victoriaand have potential atLake Turkana. Kenya's total catch in 2004 was 128,000 metric tons. However, output from fishing has been declining because of ecological disruption. Pollution,overfishing, and the use of unauthorised fishing equipment have led to falling catches and have endangered local fish species.
Kenya has no significant mineral endowment. The mining and quarrying sector makes a negligible contribution to the economy, accounting for less than 1% of GDP. The majority of this is contributed by thesoda ashoperation atLake Magadiin south-central Kenya. Thanks largely to rising soda ash output, Kenya's mineral production in 2005 reached more than 1 million tons. One of Kenya's largest foreign-investment projects in recent years is the planned expansion of Magadi Soda. Apart from soda ash, the chief minerals produced arelimestone, gold, salt, large quantities ofniobium,fluorspar, andfossil fuel.
All unextracted minerals are government property, under the Mining Act. The Department of Mines and Geology, under the Ministry of Environment and Natural Resources, controls exploration and exploitation of minerals.
Although Kenya is the most industrially developed country in East Africa, manufacturing still accounts for only 14% of GDP. This represents only a slight increase since independence. The rapid expansion of the sector immediately after independence stagnated in the 1980s, hampered by shortages inhydroelectric power, high energy costs, dilapidatedtransport infrastructure, and the dumping of cheap imports. However, due to urbanisation, the industry and manufacturing sectors have become increasingly important to the Kenyan economy, and this has been reflected by an increasing GDP per capita. Industrial activity, concentrated around the three largest urban centres,Nairobi,Mombasa, andKisumu, is dominated by food-processing industries such as grain milling, beer production, sugarcane crushing, and the fabrication of consumer goods. Kenya also has anoil refinerythat processes imported crude petroleum into petroleum products, mainly for the domestic market. In addition, a substantial and expandinginformal sectorengages in small-scale manufacturing of household goods, motor-vehicle parts, and farm implements.
Kenya's inclusion among the beneficiaries of the US Government's African Growth and Opportunity Act gave a boost to manufacturing. Since the Act took effect in 2000, Kenya's clothing sales to the United States increased from US$44 million to US$270M in 2006. Other initiatives to strengthen manufacturing include favourable tax measures, including the absence of duties for capital equipment and other raw materials.
The largest segment of Kenya's electricity supply comes from hydroelectric stations at dams along the upperTana River, as well as theTurkwel Gorge Damin the west. A petroleum-fired plant on the coast, geothermal facilities atOlkaria, and electricity imported fromUgandamake up the balance. Kenya's installed capacity stood at 1,142megawattsa year between 2001 and 2003. The state-ownedKenya Electricity Generating Company, established in 1997 under the name Kenya Power Company, handles the generation of electricity, while theKenya Power and Lighting Companyhandles transmission and distribution.Shortfalls of electricity occur periodically when drought reduces water flow. In 1997 and 2000, for example, drought prompted severe power rationing, with economically-damaging 12-hourblackouts. Frequent outages and high costs of power remain serious obstacles to economic activity. Tax and other concessions are planned to encourage investment in hydroelectricity and ingeothermal energy, which Kenya has been a pioneer in adopting.
Kenya currently imports all crude petroleum requirements, with petroleum accounting for 20% to 25% of the national import bill.Hydrocarbonreserves have been found in Kenya's semi-arid northern region ofTurkanaafter several decades of intermittent exploration. Offshore prospecting also continues.Kenya Petroleum Refineries, a 50:50 joint venture between the government and several oil majors, operates the country's sole oil refinery inMombasa. The refinery's production is transported via Kenya's Mombasa–Nairobi pipeline.However, the refinery is currently non-operational.In 2004, oil consumption was estimated at 55,000 barrels (8,700 m) a day.
Kenya's dependence on tourism has greatly reduced over the years. In 2019, foreign tourist revenues stood at $1.76 billion, accounting for only 1.6% of Kenya's GDP and approximately 12% of all international tourism receipts in Eastern Africa.
The growing middle class in Kenya has also led to a significant growth in domestic tourism over the years. This steady growth in domestic tourism has defied the turmoil of elections or terror attacks. In 2014, for the first time, Kenya National Bureau of Statistics data showed that the number of Kenyans accommodated in hotel rooms was higher than that of foreign tourists, pointing to the increasing significance of domestic tourism and highlighting the need for the government to focus on promoting domestic tourism over international visitors as a way of yielding more sustainable growth in the tourism sector
In 2018, domestic tourists’ bed occupancy accounted for 52.9% of the total bed occupancy in the country.
Kenya offers numerous large national parks in a wide variety of landscapes. Besides the coast, there are large deserts, steppes and mountains. The national parks and nature reserves contain the natural habitats of many animal species.
Kenya is East Africa's hub for financial services. TheNairobi Stock Exchange(NSE) is ranked 4th in Africa in terms of market capitalisation.
The banking sector in Kenya is regulated by The Central Bank Of Kenya. Kenya's banking sector is mainly dominated by local commercial banks, namely Equity Bank, Kenya Commercial Bank, NCBA Bank, Diamond Trust Bank, Cooperative Bank, and National Bank. The Kenya Commercial Bank is the largest bank in Kenya by asset size and branch network as of 2023.
Kenya enjoys the presence of a number of high-profile accounting firms. TheBig Four firms,Mazars,Grant Thornton International, andPKF Internationalactively operate within the financial system, and are often responsible for the audit of Nairobi Stock Exchange firms.
Kenya’s first commercial-sized ship to be built from scratch—not only in Kenya but also in the whole of East Africa—was launched in October 2023.The 1800-ton vessel, the MV Uhuru II, will ferry goods and petroleum across Lake Victoria.
In 2022, Kenya's labour force was estimated to include about 24 million workers. In recent years, much of Kenya's labour force has moved from the countryside to cities such as Nairobi, as Kenya becomes increasingly urbanised.
The labour force participation rate in Kenya has been constant from 1997 to 2010 for both women and men. In 1997, 65% of women were employed in some type of labour and 76% of men were employed. In 2005, 60% of women and 70% of men were in the labour force, increasing slightly to 61% of women and 72% of men in 2010.
In the past 20 years, many Kenyans have moved away from family farming towards wage labour, small business entrepreneurship, and informal work. In 1989, 4.5 million Kenyans out of a total working population of 7.3M worked on family farms. In 2009, only 6.5M Kenyans out of a total working population of 14.3M worked on family farms. Of these, 3.8M were women and 2.7M were men.
According to the World Bank 2012 Kenya Economic Update, modern wage jobs include being an "engineer, telecommunication specialist, cut flower worker, teacher, construction worker, housekeepers, professionals, any industrial and manufacturing job, and port and dock workers." In 1989, there were only 1.9M Kenyans employed in wage work. In 2009, this number increased to 5.1M, with 3.4M men and 1.3M women were employed in wage jobs.
In Kenya, the "Jua Kali" sector is another name for theinformal economy, also described as non-farming self-employment.Jua Kali is Swahili for "hot sun" and refers to the idea that the workers in the informal economy work under the fierce sun.The informal sector consists of legally unrecognised and unregulated self-employment and wage employment. As a result, informal sector employment does not contribute to Kenya's GDP.Non-farm self-employment has risen from 1989 to 2009.
The World Bank characterises non-farm self-employment to include jobs such as "street vendor, shop owner, dressmaker, assistant, fishmonger, caterer, etc." Non-farm self-employment has risen from a total of 0.9 million workers in 1989 to a total of 2.7 million in 2009. Men make up 1.4 million workers, and women workers number 1.3 million.
As of 2009, Kenya's informal economy accounts for about 80% of the total employment for the country. Most informal workers are self-employed, with few entrepreneurs employing others. The informal sector contributes economic activity equal to 35% of the total GDP in Kenya, and has its own informal finance structure in the form ofrotating savings and credit associations. This sector provides an income mainly for those in lower socioeconomic groups.
Drawbacks of the informal economy include the promotion of smuggling and tax evasion and the lack of social and legal protection. Most members of the informal sector have low educational attainment. Rising costs of education and uncertainty about future employment have caused many workers to enter the informal economy, due to lower entry fees as well as shorter and practical training and apprenticeships.
Kenya has one of the best human capital in Africa. According to the World Bank's 2019 Human Capital Index (HCI), which measured human capital of the next generation, Kenya ranked first in sub-Saharan Africa with an HCI score of 0.52. The index combined several key indicators, such as school enrolment, child survival, quality of learning, healthy growth and adult survival into a single index ranging between 0–1.
The economy's heavy dependence on rain for its agriculture leaves it vulnerable to periods of high inflation during droughts.The agricultural sector employs nearly 33% of the total labour force.
Kenya's economic performance had for a long time been hampered by various factors: heavy dependence on a few agricultural exports vulnerable to global price fluctuations; population growth which has outstripped economic growth; prolonged droughts requiring power rationing; deteriorating infrastructure; and extreme income inequality. Some of these issues have been addressed by policies, with GDP growth increasing, population growth slowing, rapid infrastructural improvements being made and increased electrification rates with more stable power supplies.
Poorgovernanceandcorruptionalso have had a negative impact on growth, making it expensive to do business in Kenya.
Despite these challenges, two thirds of Kenyans expect living conditions to improve in the coming decades.
This article incorporatespublic domain materialfromThe World Factbook.CIA.
This article incorporates text from a scholarly publication published under a copyright license that allows anyone to  reuse, revise, remix and redistribute the materials in any form for any purpose: Ellis, Amanda; Cutura, Jozefina; Dione, Nouma; Gillson, Ian; Manuel, Clare; Thongori, Judy. 2007. Gender and Economic Growth in Kenya : Unleashing the Power of Women. Directions in Development; Private Sector Development. Washington, DC Please check the source for the exact licensing terms.