GENERAL OVERVIEW
 

AGRICULTURE

Agriculture accounts for about 24 per cent of the Gross Domestic Product and continues to dominate the Kenyan economy. The country has varied ecological zones, a wide range of crops are cultivated and livestock reared. Traditionally, the biggest foreign exchange earners have been tea and coffee, but tourism and horticulture are becoming increasingly important. Consignments of fresh vegetables, fruits and cut flowers are air freighted daily to various destinations around the world.

MANUFACTURING

Kenya’s industrial sector has grown substantially over the years and contributed about 13.0 per cent of the Gross Domestic Product as at the year 2002. The manufacturing sector is composed of medium and large scale enterprises with major foreign multinational companies from the European Union, United States of America, and Asia.

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INFRASTRUCTURE

The Government is making all efforts to improve the infrastructure by implementing reforms aimed at increasing the efficiency of existing facilities through improved maintenance, rehabilitation, upgrading and expansion.

TRANSPORT

Airports
Kenya has a well-developed international and domestic air transport facilities. There are international airports in Nairobi, Mombasa and Eldoret, and more than 150 airstrips around the country. Nairobi’s Jomo Kenyatta International Airport serves more than 30 airlines providing direct scheduled services to major capitals in Africa, Europe, the Middle East and Asia. Wilson Airport, which is also in Nairobi, handles light aircraft and is one of the busiest in Africa.

Passenger traffic through Nairobi, Mombasa and Eldoret airports rose significantly by 12.2% from 3,851,000 travellers in 2001 to 3,976,000 travellers in 2002. This was due to a rejuvenated tourism sector. The volume of cargo exported increased from 130,600 tonnes in 1999 to 400,145 tonnes in 2000 because of increased exports of fresh produce and cut flowers to foreign markets.

Seaports
Mombasa is the principal seaport of Kenya and one of the most modern ports in Africa, providing connection to landlocked neighbouring countries. The deepwater port with 21 berths, 2 bulk oil jetties and dry bulk wharves, handles all sizes of ships and all types of cargo. In addition, the port also has specialised facilities including cold storage and warehousing and its container terminal is one of the best equipped in the region.

The port of Mombasa is linked to the World’s major ports with more than 200 sailings a week to Europe, North and South America, Asia, the Middle East, Australia, and the rest of Africa. Freight haulage through Mombasa increased from 12,717,000 tonnes in the year 2001 from 12,783,000 tonnes in 2002.

The Kenya Ports Authority which manages port operations is one of the strategic parastatals currently undergoing comprehensive restructuring aimed at enhancing efficiency and delivery of service.

Roads
Kenya has an extensive road network connecting most parts of the country. All weather roads connect major commercial centres. This transportation mode handles about 70 per cent of the freight traffic in Kenya. Freight rates are reasonable and negotiable.

Kenya and neighbouring countries – Uganda, Burundi, Rwanda, Sudan, and the Democratic Republic of Congo (DRC) – have established the Northern Corridor Transport Agreement, which facilitates transportation of goods to and from the port of Mombasa.

Railways
Kenya is served by a single-track railway system running from Mombasa through Nairobi to Uganda with branches to Nanyuki, Kitale and Kisumu. Another branch connects Kenya to Tanzania through Taita Taveta. The amount of traffic handled by the railway in the year 2001 was 2,400,000 tonnes compared to 2,200,000 tonnes in 1999, representing a 9.1% increase. Reforms within Kenya Railways continue in line with the Parastatal Reform Programme.

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UTILITIES

Telecommunications
The country has a well-established communication system. The Kenya Posts and Telecommunications Corporation was restructured under the Parastatal Reform Programme. As a result, services of postal, telecommunication and regulatory functions were separated, creating the Postal Corporation of Kenya, Telkom Kenya Limited, and Communications Commission of Kenya (CCK), respectively. The Government has so far licensed two mobile phone providers and is considering licensing others.

Thirty Internet Service Providers are currently licensed to operate in Kenya, while other applications are being considered. The Parastatal Reform Programme has created enormous investment opportunities for private sector participation and there still exist opportunities to be exploited.

Electricity
Electricity is supplied at 240 volts, 50 cycles single phase, and at 415 volts, 50 cycles three phase. The Government is encouraging private sector participation in the generation of electricity. Under the Parastatal Reform Programme, the functions of generation and transmission and distribution were separated creating the Kenya Electricity Generating Company (KENGEN) and the Kenya Power and Lighting Company(KPLC), respectively.

The Electrical Power Act also established the Electricity Regulatory Board (ERB) whose functions, inter-alia, are setting tariff rates and licensing of private sector applicants.

Water and Sanitation
For industrial and domestic purposes, water is supplied by local authorities and other licensed suppliers. Major towns in Kenya provide sewerage and drainage systems for residential and business use. In view of increasing demand, the various local authorities are undertaking major investments for the supply of water. The overall goal of the Government is to ensure that all Kenyans have access to safe drinking water. Currently, water policy focuses on providing an enabling environment and regulatory framework for all stakeholders in the water sector.

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MEDIA
Kenya has more than 30 monthly, bi-monthly and quarterly magazines and journals published locally. There are four English dailies, as well as a large selection of foreign newspapers and magazines. Radio and television broadcasts are in English, Kiswahili and other languages. The local television network is linked international networks such as the British Broadcasting Corporation (BBC), Cable News Network (CNN), and Reuters.

Kenya hosts an International Press Centre serving more than 150 international journalists.

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EDUCATION
Kenya’s education system provides for eight years of primary, four years of secondary and four years of university education. The country has six public and five private universities, several polytechnics, technical and technology institutes. Technical training is subsidised by an Industrial Training Levy paid by all companies operating in Kenya. There are a number of international schools offering various educational systems that conform to the American, British, French, German, Japanese and Swedish.

The Government policy is geared towards provision of universal primary education. Priority is given to access to basic education including special education, retention, quality, management, and provision of assistance in educating the girl child, the poor and the vulnerable.

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INVESTMENT POLICY
The Government has outlined the nation’s broad economic development strategy in various Sessional Papers and National Development Plans, which have placed emphasis on increased private sector participation in the economy.

ECONOMIC REFORMS
Kenya has followed a mixed economic development strategy since independence. While the receptive roles of the public and private sectors have evolved over time, the country has experienced remarkable continuity in its underlying economic development strategy. However, there has been a shift in emphasis from public investment to private sector-led economic growth. Market-based reforms have been introduced and more incentives for both local and foreign private investment provided.

The key economic reforms the Government has carried out include:

• Abolishing export and import licensing, except for a few items listed in the Imports, Exports and Essential Supplies Act (Cap 502);
• Rationalising and reducing import tariffs;
• Freeing the shilling exchange rate to be determined by the market;
• Removing all current account restrictions;
• Allowing residents and non-residents to open foreign currency accounts with domestic banks;
• Removing restrictions on domestic borrowing by foreign-owned companies;
• Allowing residents to borrow without limitation from abroad;
• Revoking of blocked funds provision;
• Liberalising unconditionally the Capital Market – foreign companies can buy stocks to a maximum of 40 % of company’s total quoted stocks and individuals up to 5%; and,
  
• Removing price controls, and
  
• Repealing the exchange Control Act.
  

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