Country Info: Kenya

Kenya

Bilateral Trade by Sector: United States - Kenya

Value ('1000 dollars), US 'domestic exports' *, US 'imports for consumption' / Includes year-to-date data

Economic Background

Kenya is the economic, financial, and transport hub of East Africa. Kenya’s real GDP growth has averaged over 5% for the last decade. Since 2014, Kenya has been ranked as a lower middle income country because its per capita GDP crossed a World Bank threshold. While Kenya has a growing entrepreneurial middle class and steady growth, its economic development has been impaired by weak governance and corruption.

Although reliable numbers are hard to find, unemployment and under-employment are extremely high, and could be near 40% of the population. In 2013, the country adopted a devolved system of government with the creation of 47 counties, and is in the process of devolving state revenues and responsibilities to the counties.

Agriculture remains the backbone of the Kenyan economy, contributing one-third of GDP. About 75% of Kenya’s population of roughly 48.5 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production.

Tourism also holds a significant place in Kenya’s economy. In spite of political turmoil throughout the second half of 2017, tourism was up 20%, showcasing the strength of this sector. Kenya has long been a target of terrorist activity and has struggled with instability along its northeastern borders. Some high visibility terrorist attacks during 2013-2015 (e.g., at Nairobi’s Westgate Mall and Garissa University) affected the tourism industry severely, but the sector rebounded strongly in 2016-2017 and appears poised to continue growing.

Inadequate infrastructure continues to hamper Kenya’s efforts to improve its annual growth so that it can meaningfully address poverty and unemployment. The KENYATTA administration has been successful in courting external investment for infrastructure development. International financial institutions and donors remain important to Kenya's growth and development, but Kenya has also successfully raised capital in the global bond market issuing its first sovereign bond offering in mid-2014, with a second occurring in February 2018.

The first phase of a Chinese-financed and constructed standard gauge railway connecting Mombasa and Nairobi opened in May 2017.

In 2016 the government was forced to take over three small and undercapitalized banks when underlying weaknesses were exposed. The government also enacted legislation that limits interest rates banks can charge on loans and set a rate that banks must pay their depositors. This measure led to a sharp shrinkage of credit in the economy. A prolonged election cycle in 2017 hurt the economy, drained government resources, and slowed GDP growth. Drought-like conditions in parts of the country pushed 2017 inflation above 8%, but the rate had fallen to 4.5% in February 2018.

The economy, however, is well placed to resume its decade-long 5%-6% growth rate. While fiscal deficits continue to pose risks in the medium term, other economic indicators, including foreign exchange reserves, interest rates, current account deficits, remittances and FDI are positive. The credit and drought-related impediments were temporary. Now In his second term, President KENYATTA has pledged to make economic growth and development a centerpiece of his second administration, focusing on his "Big Four" initiatives of universal healthcare, food security, affordable housing, and expansion of manufacturing.

Agricultural products

sugar cane, milk, maize, potatoes, bananas, camel milk, cassava, sweet potatoes, mangoes/guavas, cabbages

Industries

small-scale consumer goods (plastic, furniture, batteries, textiles, clothing, soap, cigarettes, flour), agricultural products, horticulture, oil refining; aluminum, steel, lead; cement, commercial ship repair, tourism, information technology

Industrial production growth rate

3.6% (2017 est.)

(Source: World Factbook, 2021)

View related news articles

Kenyan textile company eyes export market through new Zanzibar facility

A Kenyan company is setting up a $51.3 million (about Sh115 billion) factory in Zanzibar as it targets to get a pie of the world’s $920 billion textile market. The global textile industry was estimated at around $920 billion in 2018, and it was projected to reach approximately $1,230 billion by 2024, available global data show. With its $51.3 million factory at Chunguni area in Zanzibar, Basra Textiles Limited is specifically targeting...

12 January 2022

America-based corn lobby urges Biden to prioritise Kenya trade pact

The US’ main corn lobby group has urged President Joe Biden’s administration and Congress to prioritise trade deals between the US and Kenya to avoid losing their industry’s advantage over China. The American Corn Refiners Association (CRA), said delays in agreeing on trade deals will see potential partners like Kenya moving on and rivals like China shaping trade practices across the globe. There has also been growing unease in...

21 December 2021

Proceedings from the US-Kenya bilateral strategic dialogue

Joint Statement on the Second Kenya-U.S. Bilateral Strategic Dialogue The Governments of the Republic of Kenya and the United States of America held the second session of the Kenya – United States Bilateral Strategic Dialogue in Nairobi on November 17, 2021.  Kenyan Cabinet Secretary for Foreign Affairs Ambassador Raychelle Omamo and U.S. Secretary of State Antony J. Blinken discussed strengthening the strategic partnership across all...

17 November 2021

CCA and KEPSA sign US-Kenya private sector SME trade initiative

On Monday, October 11, 2021, H.E. Uhuru Kenyatta, President of the Republic of Kenya witnessed the signing of the Corporate Council on Africa (CCA) and Kenya Private Sector Alliance (KEPSA) U.S.-Kenya SME Trade Initiative. The initiative recognizes the critical role that SMEs play in U.S. and Kenyan trade, and seeks to expand trade and investment between American and Kenyan Small and Medium Enterprises (SMEs) through partnership,...

20 October 2021

Biden, Kenya President Kenyatta to hold White House meeting

President Joe Biden will host Kenyan President Uhuru Kenyatta for a meeting in Washington on Thursday as the White House weighs sanctions against parties to the conflict in a northern region of the neighboring East African country of Ethiopia. The meeting at the White House will mark Biden's first as president with an African leader. White House spokesperson Jen Psaki said in a statement that the two would discuss "efforts to defend...

13 October 2021

AAFA formalizes relationship with Kenya Association of Manufacturers to promote economic growth

Today, the American Apparel & Footwear Association signed a memorandum of understanding in cooperation with the Kenya Association of Manufacturers (KAM). As the representatives of the apparel and footwear industry in both the United States and Kenya, the groups have agreed to collaborate on policy areas that are of mutual interest to its membership through joint advocacy and information sharing on industry best practices. The MOU was...

20 September 2021

Kenya seeks US market access for fresh oregano, parsley

Kenya has asked the United States Department of Agriculture’s Animal and Plant Health Inspection Service (Aphis) to authorise the importation of fresh oregano and parsley to the US from Kenya. Aphis has drafted a pest risk assessment that describes potential pests associated with the commodities ahead of the possible approval process.  Download and view the documents at the links alongside The agency is making the assessment...

07 September 2021

'We examined 20 years of US-Kenya trade: Some lessons for Africa'

Kenya is one of the top five beneficiaries of the US-Africa trade initiative, the African Growth and Opportunity Act (AGOA). It also had the second-highest utilisation rate in 2018 with over 70% of its US exports covered by the programme. Launched in 2000, the trade pact gives sub-Saharan Africa the most liberal access to the huge US market available to any country or region with which Washington does not have a free...

16 August 2021

'The opportunities are vast in a potential US-Kenya FTA'

Last year, the U.S. and Kenya announced the launch of free trade negotiations, the first of its kind between the U.S. and a sub-Saharan Africa country. If successful, it would be the most significant trade development in the region since the enactment of the African Growth and Opportunity Act (AGOA) trade preference program in 2000. To better understand the key issues surrounding FTA negotiations, the U.S. Chamber’s U.S.-Africa Business...

06 May 2021

Report: A look at the potential benefits and challenges of a US – Kenya trade agreement

The American Chamber of Commerce (AmCham) Kenya has partnered with the U.S. Africa Business Centre (USAfBC) and Covington to publish a business trade report. The report, titled US-Kenya Trade Negotiations: Implications for the Future of the U.S.-Africa Trade Relationship, examines the challenges and benefits of a potential free trade agreement (FTA) between the U.S. and Kenya. Speaking during the report launch, AmCham Kenya CEO,...

30 April 2021

Kenya: 'Uhuru–Blinken talks a breath of life to US trade deal'

Trade talks between Kenya and the US could resume soon following Tuesday's virtual meeting between President Uhuru Kenyatta and US Secretary of State Antony Blinken. This is after a five-month break occasioned by change of g-uard in the US as President Joe Biden took over from Donald Trump after last November’s elections. The settling down of the Biden administration put foreign trade negotiations and policies on hold, which included...

29 April 2021