Kenya is East Africa’s most industrialized country. Good transport opportunities and a fairly large private sector provide good conditions. But the industry is inefficient and often does not work at full capacity. The sector is dominated by companies that process raw materials from agriculture.
The industry is concentrated around the big cities. After independence, there was a strong expansion. Initially, industrial production focused on replacing imported goods, but during the 1990s the export industry began to prioritize. Still, the manufacturing industry’s share of GDP is quite modest; it has remained fairly constant around 10 percent since the turn of the millennium.
Large parts of the industry are devoted to the production of meat and milk products and the preservation of various foods, as well as the production of beverages such as beer and soft drinks.
The extensive tea industry was privatized in the 1990s. The semi-state Tea Board of Kenya coordinates and oversees operations in over 50 companies with over 60 factories processing tea from over half a million growers.
- COUNTRYAAH: List of top trading partners of Kenya. Includes countries that imported most shipments from and exported most goods to the country.
About half of the industry is owned by foreign companies, many in the form of joint ventures, so-called joint ventures. Most of the owners are British or American companies.
The soft drink giant Coca-Cola opened a new giant facility near Nairobi in 2005 and a few years later moved its headquarters for East and Central Africa from London to Nairobi.
Since the 1970s there has been industry for the composition of vehicles, both cars and buses and trucks. Almost one third of the components are manufactured locally while the rest are imported.
A small part of the vehicles are exported, mainly to neighboring countries.
There is an oil refinery in Mombasa. The oil is imported while refined oil products are exported and is an important source of foreign currency.
Other important industrial products are paper, shoes, chemical products, electrical equipment, tires, ammunition and other steel products. There is also a significant and rapidly growing informal industrial sector, jua kali, which manufactures on a small scale, among other things, household goods, car spare parts and agricultural implements.
Kenya’s leading export goods are tea and cut flowers. However, imports, where oil and petroleum products dominate, are significantly larger than exports, resulting in a constant trade deficit.
Thanks to tourism, however, there is a surplus in trade in services. The tourism sector also provides important foreign currency, more so than agricultural exports. Most important in that regard, however, is money that Kenyans abroad send home, so-called remittances. According to estimates, this amounts to over one billion US dollars a year.
Coffee, fruits and vegetables are also important export goods. The dependence on agricultural exports makes the economy sensitive to both the weather and the rapid fluctuations in world market prices. Not least, the export of cut flowers fell sharply in the context of the global financial crisis 2008-2009.
Half of the exports go to other countries in Africa. Most important are Uganda and Tanzania, with which Kenya has free trade agreements (see Foreign Policy and Defense). The neighboring countries mainly sell goods from the manufacturing industry, while exports to the EU mainly consist of raw materials.
FACTS – FOREIGN TRADE
US $ 5,792 million (2017)
US $ 15,994 million (2017)
– US $ 5,018 million (2017)
Commodity trade’s share of GDP
27 percent (2018)
Main export goods
tea, cut flowers, coffee, oil products, cement, fruits, vegetables
Largest trading partner
Uganda, China, India, Saudi Arabia, United Arab Emirates, Netherlands
Kenya has long been one of Africa’s most visited tourist destinations. Many are attracted by safari in the hope of seeing big game in one of the over 50 national parks and nature reserves. Others search for the vast beaches along the coast. But the deteriorating safety situation is hitting the industry hard.
The tourism sector has been hit several times by sharp declines due to political unrest. The terrorist attacks in Nairobi and Mombasa in 1998 and 2002 caused major lapses, and the outbreak of violence in early 2008 meant that almost no tourists came during the first quarter. In all cases, the industry recovered fairly soon, despite increased competition from other African countries and concerns about the high crime rate in Kenya.
A new downturn came in 2013, first because of concerns about new violence in connection with the election and then as a result of terrorist attacks against a mall in Nairobi. Continued attacks have led to several Western countries, including Sweden, issuing travel warnings for parts of the country and President Kenyatta admitted in 2014 that the tourism industry was in crisis. The following year, the Somali Islamist guerrilla al-Shabaab carried out the bloodiest terrorist act since 1998, when nearly 150 people were killed at a university in Garissa (see Current Politics). The recurring acts of violence risk making the decline in tourist influx more permanent.
Around half a million Kenyans are normally employed in the tourism sector, which is one of the country’s most important sources of foreign exchange. If you count those who receive their earnings in the informal sector, the figure is at least twice as high.
The government is also investing in so-called ecotourism. The National Parks on the Turkana Lake and Mount Kenya are a couple of several Kenyan attractions that are on the UN agency UNESCO World Heritage List. The country is also a very interesting destination for bird watchers.
FACTS – TOURISM
Number of foreign visitors per year
1 268 000 (2016)
1620,000,000 US dollars (2016)
The share of tourist income from exports
15.8 percent (2016)
The government wants to postpone the election
The government wants to postpone the election, which according to the constitution is to be held in December 2012, to make the logistics work. The Election Commission appeals to the court to decide the matter.
Kenya joins the AU force
Decides that Kenyan soldiers should be included in the AU force fighting the violence in Somalia;
Somali group attacks
The Somali Islamist group al-Shabaab is suspected of several attacks inside Kenya, when the border with Somalia. Several people are killed and even more injured.
Action in Somalia
Kenyan troops enter Somalia (see Foreign Policy and Defense)
Spaniards are kidnapped
Two Spanish relief workers from the organization Doctors Without Borders are kidnapped in the Dabaab refugee camp.
Attacks in Nairobi
Somali al-Shabaab is suspected of an attack in Nairobi where one person was killed, and one near the border with Somalia where four were killed.
French tourist kidnapped
A French woman is kidnapped from the city of Lamu and taken to the Somali port city of Kismayo, controlled by Islamist militia al-Shabaab.
A British man is killed on the tourist island of Lamu. His wife is kidnapped and taken to Somalia.
Crime suspect candidate
William Ruto is dismissed from his ministerial post, despite a Kenyan court ruling against him. Ruto, who is still at risk of prosecution in the ICC , is the deputy leader of the ODM but has broken with Odinga and announced his intention to stand in the 2012 presidential election himself.
Refugee camps are growing
The number of refugees in the camps at Dadaab in eastern Kenya is reported to exceed 450,000 as the drought disaster in the region drives tens of thousands to flee Somalia.
Terror leader dead
al-Qaeda’s leader in East Africa, Fazul Abdullah Muhammad, is killed at a roadblock outside Somalia’s capital Mogadishu. He is suspected to have been the one who planned the attacks on US embassies in Kenya and Tanzania in 1998, as well as the attack on the hotel in Mombasa in 2002.
Suspected to the ICC
The six suspected of crimes against humanity voluntarily apply to the International Criminal Court (ICC) (see December 2010). No decision has yet been made on whether to bring charges against them.
Court is investigating massacres
The TJRC (see October 2010) begins an investigation into a massacre in Wagalla in 1984, when ethnic Somalis were killed by security forces in the wake of a rebellion. According to some sources, the death toll amounts to several thousand.