Kenya Business Commercial Information Tourism Investment

The Kenyan economy is largely agricultural � 80 per cent of the population are dependent on the land, contributing around 30 per cent of national output. The main cash crops are tea and coffee, although pyrethrum, sisal, sugar and cotton are also important. Kenya is one of the few African countries with a significant dairy industry. Hydroelectric plants meet 80 per cent of the country�s energy requirements. The remainder comes from imported oil, which is also used for one of the country�s principal industries, the manufacture of petroleum-based products such as plastic and chemicals. Kenya, which has one of Africa�s largest manufacturing sectors, also produces cement, paper, drinks, tobacco, textiles, rubber and metal products, ceramics, and electrical and transport equipment. The mining industry, however, is very small. In the service sector, tourism is the largest industry and the country�s principal source of foreign exchange; this increased significantly in 2004 with a 51.9 per cent increase in earnings over 2003.
Like many African countries, Kenya signed up to an IMF-imposed Structural Adjustment Programme in the mid-1990s but it lapsed following policy disagreements between the Fund and the Kenyan government. Further concerns, mainly concerning political reform and widespread corruption, disrupted Kenyan relations with its other major Western aid donors. The IMF and World Bank withdrew support entirely in January 2000. However, following introduction of anti-corruption measures and the privatisation of several major state-owned enterprises, the IMF is now expected to resumed its support by the end of 2003. The IMF approved the new Poverty Reduction and Growth Facility. The 2005/6 budget gave new emphasis to economic recovery strategies, with particular emphasis on increasing expenditure on health, education and infrastructure. In addition, for the first time, foreign investors have been allowed to take controlling stakes in Kenyan companies.
Overall economic performance has been disappointing due to the persistent Government failures and slow pace of reform. Since the election of the Narc Government, pace has begun to pick up. Economic growth reached 4.3 per cent in 2004. An estimated two million Kenyans are unemployed and the new Government, elected in 2003, plans to create 500,000 new jobs. Along with Tanzania, Kenya and Uganda have explored plans to establish a customs union as the first step towards an east African regional trading bloc (a previous effort collapsed in 1977).

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