Export Britain

Kenya

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Ease of trading across borders

Importing a standard container of goods into Kenya requires:

Introduction

Kenya is the biggest and most advanced economy in east and central Africa however it is still a developing country. Kenya is East and Central Africa's hub for financial services. Agriculture has over the years been the backbone of Kenya’s economy and the country has therefore been the source of many agricultural products for export. Economic prospects are positive largely because of expansions in tourism, telecommunications, transport, construction and a recovery in agriculture. Kenya has a well-developed social and physical infrastructure. It is considered the main alternative location to South Africa, for businesses seeking entry into the African continent.

Economic snapshot (% annual growth rate)

	2011	2012	2013-16
GDP	4.5	4.5	5.9
Export of goods and services	7.9	-2.4	12
Import of goods and services	-7.5	5.7	-7.9
Inflation	9.4	5.7	5.6
Exchange rate (per £)	133	128	139
Population	2.8	2.7	2.6
Source: Oxford Economics

Economic outlook

Despite the impact of a sluggish EU economy on Kenya’s exports and tourism, rising agricultural output and foreign direct investment inflows kept GDP growth at 4.6% in Q1-Q3 last year. Activity continues to be led by construction, electricity and water, financial services and manufacturing, the latter supported by the strong regional performance in East Africa offsetting weaker global demand. Growth of 5.5% in 2014 is expected, as tourism recovers and agricultural output rises. With investor interest in Africa rising and East African trade opportunities expanding, growth of around 6% in both 2015 and 2016 is expected.

Trade outlook

As a member of the integrated East African Community, Kenya’s external performance will also depend on the growth rate of East African countries, especially Uganda and Tanzania with whom Kenya has significant trade ties. These blocs are a key components of Kenya’s trade volumes. Agricultural productivity is central to Kenya's export industry. More than 75% of the population is engaged in agriculture and allied activities, which contribute almost 25% to the national production. The country has subsistence petroleum production, which is consumed internally and exported to neighbouring countries. Kenya’s imports include machinery, transport equipments and motor vehicles. India and the UAE are the largest import partners for Kenya. Other major import partner countries are China, Saudi Arabia, South Africa, Japan and the US.

SWOT analysis

Strengths Good telecommunications and financial services	Weaknesses Inadequate infrastructure.
Opportunities Strategic position between West Africa and East Africa. Emerging middle class.	Threats Agricultural production highly dependent on weather conditions.

Opportunities for UK businesses

Kenya has a central role in East Africa as the largest economy and a gateway into the region. The economy is diversified and the financial sector strong, with deep and developed domestic debt markets. Opportunities for UK businesses exist largely in the services sector (tourism, banking, telecommunications, wholesale and retail trade, and business process outsourcing). Kenya envisages a massive upgrading and extension of the country's infrastructure. In this regard, the country has highlighted a number of infrastructure projects that present significant opportunities for UK businesses in the coming years.

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