Population (2020): 53.7 million
GDP (2020): US$98.8 billion (S$134.4 billion)
World Bank “Ease of Doing Business” Rank (2020): 56
Bilateral Trade with Singapore (2021): S$219.7 million
Kenya is one of the fastest growing economies in East Africa, with GDP growth averaging at 5-6 % per year between 2010 and 2019.The sustained economic growth is due to the country’s significant political, structural and economic reforms. Kenya is also part of the East African Community (EAC) and Common Market for Eastern and Southern Africa (COMESA) which provides market access to more than 20 countries on the continent.
Kenya has a liberalised economy with relatively open policies such as 100% foreign ownership for most sectors, no controls on foreign exchange, repatriation of profits and capital. This resulted in Kenya jumping 24 places on the World Bank’s Ease of Doing Business rankings from 80th in 2018 to 56th in 2020. In addition, Kenya is an English-speaking country with an educated workforce.
As part of Kenya’s Vision 2030, which is a national long-term development policy aimed at transforming Kenya into an industrialising and middle-income country by 2030, the government is focused on sectors such as agriculture, financial services and infrastructure. Under President Uhuru Kenyatta’s leadership, the government has also identified the ‘Big Four’ agenda, which focuses on universal healthcare, manufacturing, affordable housing, food security as a pillar for economic growth.
Since 2013, Kenya has been operating on a system of devolved government with 47 counties which are run by elected county governors, deputy governors and representatives. The county governments are in charge of overseeing functions such as provision of education, healthcare and maintenance of roads which were previously the responsibility of Kenya’s national government. The devolution has opened investment opportunities in various counties for sectors such as agriculture, health, real estate and tourism.
The private sectors are represented by business chambers such as the Kenya Private Sector Alliance (KEPSA), Federation of Kenya Employers (FKE) and The Kenya Association of Manufacturers (KAM). Regular exchanges between government and private sectors and investment promotion agencies such as Kenya Investment Authority are also conducted to solicit feedback from private sectors.
Kenya is East Africa’s regional trade and finance hub, and the undisputed gateway to the region. Mombasa has one of the most important ports in the Indian Ocean seaboard, while the capital Nairobi serves as East Africa’s diplomatic and business centre.
The country’s strategic location and well-developed business infrastructure has seen many organisations make it their regional hub. Multinational and multilateral organisations such as World Bank, Citi, Standard Chartered, Toyota, Microsoft, IBM, Airtel, Huawei, Coca Cola, Nestle have set up offices in Nairobi. Its time zones also make it easy to work with global markets.
Nairobi is also the African headquarters of international organisations such as World Bank, and the United Nations. In 2018, Enterprise Singapore opened our overseas centre in Nairobi to spearhead Singapore companies’ entry into the fast-growing East Africa region.
The Kenyan government is building on the country’s connectivity. Kenya is the region’s air hub, with over 100 international connections from Nairobi. The Port of Mombasa is one of the busiest ports in Africa, and the main gateway to Eastern and Central Africa.
The Lamu Port and South Sudan, Ethiopia Transport (LAPPSET) corridor development creates Kenya’s second logistic corridor. This will help to improve infrastructure development and scale down the cost of transportation and logistics. One of the flagship projects under LAPPSET is the construction of another port at Lamu. The US$5 billion Lamu port will comprise 32 deep-sea berths and increase Kenya’s port handling capacity by 23 million tons per year by 2030. In May 2021, the first berth was commissioned, and the second and third berths are scheduled to be completed by fourth quarter of 2021. The Lamu port will also strengthen Kenya’s position as a major transhipment hub for the region.
Within the capital city, the Nairobi Expressway will be launched in May 2022. The 27km toll road is expected to significantly reduce the commute time from airport to city centre from two hours to 10-15 minutes.
You can capitalise on these opportunities in infrastructure building and improved connectivity in Kenya to reach the rest of the country and the region.
Kenya is the regional leader in ICT and considered as one of three top innovation hubs in sub-Saharan Africa. It is also known as Africa’s Silicon Valley or “Silicon Savannah”. This is due to the Kenyan government’s major Information and Communications Technology (ICT) push and the installation of undersea fibre-optic cables as well as the National Fibre Optic Backbone Infrastructure (NOFBI) across all the 47 counties which have significantly improved Kenya’s connectivity. The launch of various innovation hubs, co-working spaces and accelerations such as Antler, iHub, Kofisi, Nailab and Nairobi Garage have also provided a conducive environment for startups and entrepreneurs to innovate and grow. These measures have seen Kenya-based startups raising more than US$305 million over 52 deals in 20201.
Kenya is also a pioneer in mobile money. Safaricom, the largest mobile money operator launched M-PESA in 2007 which has become one of the most successful mobile money solutions globally. Today, East Africa has the highest rate of mobile money penetration globally with 1,106 registered mobile money accounts for every 1,000 adults2. This has fuelled the growth of digital services across other sectors such as agritech, edutech, healthtech, pay-as-you-go solar systems and government digital services, among many others.
Your company can benefit from these developments, which have made it easier to do business in Kenya. For example, customs paperwork has been replaced with an electronic interface system known as Simba. It is also more efficient to conduct trade in Kenya, as customs checks are now conducted mainly via computerised scanning, with fewer physical checks.
As of August 2020, all newly licensed companies in the ICT sector will need to meet a minimum of 30% local shareholding while existing licensees will have three years to comply with the new local ownership requirement.
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1 Partech Annual Africa Report 2020
2 Financial Access Survey (IMF, 2020)