Agriculture forms the backbone of Kenya’s economy. As the largest economic sector, agriculture contributed 35% of Kenya’s GDP in 20171. It employs over 40% of the total population, including more than 70% of Kenya's rural people2.
The agricultural sector also drives the non-agricultural economy that includes building and construction, education, manufacturing, transportation, tourism, and other social services.
Only 20% of the country’s land is arable. These areas have not reached maximum yields3 as most farmers work without modern seeds or technology. This offers your business opportunities in the upstream agribusiness value chain. You can bring in new ideas and technologies to improve the productivity and incomes of farmers and their families.
For example, Singapore-headquartered Asiatic Agricultural Industries, a manufacturer of agricultural chemicals and products, had started trading with Africa since the mid-1990s. It now has an office in Kenya and also export to Ethiopia, Ghana, Rwanda, and Uganda.
You can also explore the many downstream opportunities in Kenya’s food processing industry, given the country’s abundance of raw agricultural supply and low labour cost. A company which has done this is integrated agri-business company Wilmar, which has partnered with Kenyan-based conglomerate Bidco to venture into palm oil processing.
1 CIA World Factbook, 2017
2 Food and Agriculture Organization of the United Nations
3 USAID, 2018
Kenya is evolving to become a knowledge-based nation, which presents new business opportunities in the Information and Communications Technology (ICT) sector. The country’s ICT output increased by 10.9% to Ksh 345.1 billion (S$4.66 billion) in 20174, and the sector is estimated to have contributed 8% to the country’s GDP and created 180,000 direct jobs by 20175.
The country’s mobile phone penetration is one of the highest in the world, with nine out of ten Kenyans having a mobile phone6. This has helped Kenya emerge as a leader in mobile payments, with millions using mobile phones for banking and online transactions. There are 18 million active users of the M-Pesa system created by Safaricom – Kenya’s leading mobile network service provider7.
Singapore company V-Key is an example of a technology company that is bringing their mobile identity solution to Kenya, with local partner Crescent Tech.
The Kenyan government has laid out development strategies of the ICT sector in its Vision 2030 goals. One plan is to develop the US$14.5 billion (S$19.8 billion) Konza Technology City that would build Kenya’s capabilities in business processing outsourcing and other related IT services. It has plans to build and expand the Konza Technology City over 20 years. The first phase of construction started in November 2016 and is expected to be completed by 2019.
You can expand into the country at innovation hubs that promote the use of ICT through co-working, collaboration, and incubation services. For example, the iHub brings together technologists, investors, tech companies, and hackers to form an ecosystem of creators and users of mobile technologies.
If your business is in e-Government services, Kenya may be the ideal launchpad into Sub-Saharan Africa. Bank on your experience in public sector management, to design or implement e-Government systems that are relevant to Kenya’s reform agenda.
4 Economic Survey 2018
5 The Kenya National ICT Masterplan 2014-2017
6 Communications Authority of Kenya, 2018
7 “M-Pesa: Kenya's mobile money success story turns 10”, CNN, 2017
Kenya has the most developed manufacturing sector in East Africa. The sector accounted for 9.2% of the country’s GDP in 2016. The Kenyan government has plans to grow the manufacturing industry to contribute 15% of the GDP by 20228. These plans come under its Vision 2030, Kenya Industrial Transformation Programme, National Trade Policy, Investment Policy, and “Buy Kenya Build Kenya” (BKBK) plan.
Much of the country’s manufacturing is dominated by food-processing industries. This is made up of more than 1,200 businesses that range from small family firms to large multinational companies such as Cadbury, Coca Cola, and Nestle. The processing of coffee and tea, fruit and meat canning, cornmeal and wheat flour milling, and sugar refining are important in Kenya’s manufacturing sector.
Explore breaking into the Kenya manufacturing market by supporting the current players in the industry. This can be in the form of technological solutions, or solutions that improve yield or productivity.
Kenya’s growing middle class population currently accounts for 45% of its population. These consumers with higher spending power are driving demand in its consumer and retail market9. If you are a trader or manufacturer of fast-moving consumer goods, this is your chance to seize the window of opportunity before local manufacturing and local brands take root.
8 “Manufacturing Priority Agenda 2018”, Kenya Association of Manufacturers
9 “Consumer goods producers benefit from Kenya's growing middle class”, Oxford Business Group
Kenya has a well-established tourism industry. It recorded a 20.3% growth in earnings that reached Ksh $1.2 billion (S$16.2 million) in 201710.
The country is a well-known safari destination with some 60 national parks and reserves, and beaches along its 500 km of coastline. Kenya’s top tourist sources are from Europe, continental Africa, and the United States, and increasingly from Asia and Latin America.
The Kenyan government recognises the increasing importance of tourism in the Kenyan economy and is on an investment and marketing drive in this sector. One area of focus is business tourism, which includes the meetings, incentives, conventions and exhibitions (MICE) segment. The government is building new convention centres in Mombasa, Kisumu and central Kenya to increase capacity for MICE events.
Another key government investment is in the new Lamu Port South Sudan Ethiopia Transport (LAPSSET) Corridor—which will link Kenya with Ethiopia, Uganda and South Sudan. Part of the LAPSSET project includes the development of new resort cities Lamu, Isiolo, and Turkana.
You can look for opportunities in the hospitality and tourism sectors to establish your presence in Kenya. These could be in the development of resort cities and new tourist circuits, entertainment and golf facilities, branding of premium parks, development of high-value niche products and MICE tourism facilities, and the construction of new international hotels.
10 “Kenya’s Tourism Sector Recorded 20.3% Growth In 2017”, The Kenyan Wall Street, 2018