Contributing an estimated 47.5% of GDP in 2017, the services sector plays a significant role in the growth and development of the Kenyan economy, followed by agriculture and industry, contributing about 35% and 17.6% of GDP respectively. Trade in goods and services also plays an important role in Kenya’s economic growth – contributing 39.40% to GDP in 2017.
Much of Kenya’s export earnings are from commodities such as tea, coffee, horticultural products, fish, petroleum products and cement and its major imports include machinery and transport equipment, petroleum products, motor vehicles, steel, plastics and resins.
The country’s economy is projected to rebound after experiencing a decline in real GDP to an estimated 5% in 2017 from 5.8% in 2016, which was a result of subdued credit growth, drought and prolonged political impasse over the presidential elections of 2016. Growth is expected to increase from 5% in 2017 to 6% in 2019. On the other hand, inflation is likely to decline from about 8% in 2017 to approximately 5.8% in 2019.
Due to its diversified economy, Kenya is expected to get stronger from 2018 onwards. Despite Kenya facing the challenges of weak governance, corruption and inadequate infrastructure that hamper economic growth, the country has a reasonably sized domestic market with a population of 46.729 million in 2017 that is expected to grow to 49.364 million in 2019, a GDP of US$79.511 billion in 2017, which is expected to increase to about US$95.803billion in 2019 and a GDP per capita income of US$1,701.55 in 2017, projected to rise to US$1,940.759 in 2019. The country also holds opportunities for export diversification to neighbouring East African Community (EAC) countries, COMESA, Africa, the UK and the US market under the Africa Growth Opportunity Act (AGOA).
The country’s volume of imports of goods and services is expected to decline from about 8.801 in 2017 to approximately 8.215% in 2019, and the amount of exports of goods and services is expected to grow from about 9.483% in 2017 up to around 9.524% in 2019, indicating expansion in exports
There is potential for investment in construction, tourism, hotel and catering, and infrastructure development. The country remains the leading regional hub for information and communication technology, financial and transportation services, providing opportunities for trade and investment in these sectors.
Kenya’s business-enabling environment has also improved with Kenya moving up 12 places to a ranking of 80 in the World Bank’s Doing Business report.