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Economic Overview

Mombasa Port

The Kenyan economy, East Africa's largest, has experienced considerable growth in the past few years, driven by several key factors. The country enjoys some particular advantages: a reasonably well-educated labour force, a vital port that serves as an entry point for goods destined for countries in the East African and Central Africa interior, abundant wildlife and kilometres of attractive coastline and above all, a government that is committed to implementing business reforms.

Kenya’s economy remained one of the strongest economies in Africa recording a GDP of Kshs. 7749. 4 billion (US$ 77.494 billion) and growing at 4.9 % in 2017. Agriculture is the most important contributor to Kenya’s GDP at 24.9 %. Tea and horticulture are the leading export earners for Kenya. In 2017, tea and horticulture exports were valued at Kshs. 147.3 billion (US$ 1.473 billion) and Kshs. 113.3 billion (US$ 1.133 billion) respectively. Africa is the leading destination of Kenya’s exports followed by Asia and Europe. Kenya’s main exports to Japan are tea, coffee and cut flowers. Pakistan remains the leading importer of Kenyan tea.

Kenya's position as the economic, commercial and logistical hub in Eastern Central Africa, places the country as one of the best investment destinations globally. Foreign Direct Investments (FDI) has been on the rise and is strongest in the East Africa region. Additionally, the re-based Gross Domestic Product (GDP) figures of USD 58.1 Billion in 2014 elevated Kenya to a Lower Middle Income Country, one of the largest economies in Sub-Saharan Africa and amongst the fastest growing in the world. In the region, Kenya is the dominant economy in the East Africa Community, contributing to more than 40% of the region's GDP. This is also uniquely distinguished from many countries by the fact that Kenya's economy has for a long time been one of the most diversified with no oil, nor gas exports. The recent discovery of oil in Turkana (northern part of the country) is likely to strengthen and boost Kenya’s economic growth.

Other Milestone steps evidenced in modernizing railways, seaports, the airports, and development of geothermal power stations, all puts Kenya on an accelerated developmental pedestal. This is further complemented by Kenya being a member of both the EAC and COMESA economic regional blocs, which both gives a combined market population of over 400 million which is about a half of Africa's total population.

For more information on the overall economic outlook, and GDP growth of the Kenyan Economy click http://www.knbs.or.ke/.

Vision 2030

Kenya Vision 2030 is the country's development blueprint covering the period 2008 to 2030. It aims at making Kenya a newly industrializing, "middle income country providing high quality life for all its citizens by the year 2030". The Vision has been developed through an all-inclusive stakeholder consultative process, involving Kenyans from all parts of the country. The vision is based on three "pillars" namely; the economic pillar, the social pillar and the political pillar. This vision's programme plan comes after the successful implementation of the Economic Recovery Strategy for Wealth and Employment Creation (ERS) which has seen the country's economy back on the path to rapid growth since 2002, when GDP grew at 0.6% rising to 6.1% in 2006. The relationships between the pillars can be seen in Exhibit One below.

The economic pillar aims at providing prosperity of all Kenyans through an economic development programme aimed at achieving an average Gross Domestic Product (GDP) growth rate of 10 % per annum the next 25 years. The social pillar seeks to build "a just and cohesive society with social equity in a clean and secure environment". The political pillar aims at realizing a democratic political system founded on issue-based politics that respects the rule of law, and protects the rights and freedoms of every individual in the Kenyan society.

The Kenya Vision 2030 is to be implemented in successive five-year Medium Term plans with the first such plan covering the period 2008 – 2012. (with the current one covering 2013 -2017) and so until 2030.

For more information : VISION 2030

Important multinationals active in Kenya

Barclays Bank, Standard Chartered Bank and mobile service provider Vodafone (all three from the UK) are among the top companies doing business in Kenya. Also present are Bata, the global shoe company headquartered in Canada, and Beiersdorf, the German chemical manufacturer and producer of Nivea skincare products. Other multinationals operating in Kenya include British American Tobacco (BAT), food manufacturer Cadbury and Toyota Tsusho Corporation.

Doing Business in Kenya

Private sector-led economic growth has since the early 2000s, been Kenya's Priority. The Government's business-friendly stance has rolled over into Vision 2030, which sets development benchmarks for a number of priority sectors. This has been complemented by the integration of the EAC and the establishment in 2005 of a customs union and a common market (2010).

Kenya is a member of COMESA with 19 countries, and 14 of which are in a Free Trade Area (FTA). Three regional economic blocks i.e EAC, COMESA and SADC with a combined population of over 600 million people are currently developing a joint framework and roadmap towards a Free Trade Area by 2015.

The initial step in forming a company is to register the proposed company name with the Registrar of Companies at the Attorney General's Chambers in Nairobi. The Memorandum and Articles of Association should be filed with the Registrar of Companies who, upon satisfaction, issues the Certificate of Incorporation.

For more information :Starting A Business in Kenya - Kenya Investment Authority