Agriculture forms the backbone of Kenya’s economy. As the largest economic sector, agriculture contributes to approximately one third of Kenya’s GDP1. About 75% of Kenya’s population work within the agricultural sector, including livestock and pastoral activities.
The agricultural sector also drives the non-agricultural economy that includes building and construction, education, manufacturing, transportation, tourism, and other social services.
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 exports 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.
1CIA Fact Book Kenya
Kenya is evolving to become a knowledge-based nation, which presents new business opportunities in the Information and Communications Technology (ICT) sector. ICT contributes approximately 8% to Kenya’s GDP in 20212. It is a regional leader in broadband connectivity, ICT infrastructure, mobile money and mobile banking services. Due to the advanced mobile money penetration and ICT developments, there has been a growth of digital services across other sectors such as agri-tech, edutech, healthtech, pay-as-you-go solar systems, government digital services amongst many others.
Singapore-based fintech company, Thunes, has its regional headquarters for Africa in Kenya. The company operates a global payment network which offers fast, transparent and affordable payments to more than 110 countries. In Kenya, Thunes collaborated with PayPal and Safaricom to enable fund transfer between PayPal and M-Pesa. This enabled Kenyan sellers to access international marketplaces through PayPal’s global reach.
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. Construction would be carried out in several phases and expected to be completed by 2050. Safaricom, Kenya’s leading telco has also launched 5G network in 2021, with support from technology partners Huawei and Nokia.
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.
3 Partech Annual Africa Report 2020
Kenya has one of the most developed manufacturing sectors in East Africa. The sector accounted for 7.6% of the country’s GDP in 20204. Under Vision 2030, the government plans for Kenya to become a middle-income country with the manufacturing sector contributing to 15% of its GDP.
Much of the country’s manufacturing is dominated by the food-processing and textile & apparel industries. This is made up of more than 1,200 businesses that range from small family firms to large multinational companies such as Indomee, Mars Wrigley, Nestle, Unilever and Sunda. 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 market5. 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.
4 Kenya Association of Manufacturers (KAM) Manufacturing Manifesto 2022-2027
5 “Consumer goods producers benefit from Kenya's growing middle class”, Oxford Business Group
Kenya has a well-established tourism industry, accounting for approximately 9% of the country’s GDP. The industry further contributes about 8% of total employment. While the sector has been heavily impacted by COVID-19, Kenya is still the third largest tourism economy in Sub-Saharan Africa, after Nigeria and South Africa.
Kenya’s hospitality sector is one of the biggest and most diverse in East Africa, with offerings in a range of niches including the meetings, incentives, conferences, and events (MICE) segment and safari ecotourism. International brands such as Best Western, Hilton, Marriott, Movenpick, Radisson Blu and Ramada have opened hotels in Kenya in the past five years. 27 global hotel brands have announced plans to open new or additional hospitality facilities in Kenya over the next four years with the addition of more than 4000 new hotel rooms by 20236. The country is also 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 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.
Singapore companies such as Ascott and Banyan Tree will be launching their brands in Kenya in the coming years. 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, eco-lodges, 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.
6 Hotel Chain Development Pipelines in Africa, 2019
The real estate sector in Kenya experienced a boom since the mid-2000s. With one of the largest expatriate communities in the continent and significant presence of multinationals, there has been a surge in demand for international quality residences such as fully furnished and or serviced homes and office buildings in Nairobi. However, the uptake of office and retail spaces has been slower due to the pandemic, with more companies observing remote working arrangements and dampened consumers’ purchasing power.
With the government’s focus on growing the manufacturing sector in Kenya, an increase in the demand for industrial parks and specialised distribution & logistics facilities is expected. Kenya is also experiencing a growing population and rapid urbanisation as more Kenyans in rural regions are relocating to urban areas for better employment opportunities. This has drove demand for additional housing in major cities such as Nairobi, Mombasa and Kisumu. The Kenyan government has identified affordable housing as one of its top priorities with a goal of developing 500,000 housing units by 2022, although mortgage financing remains a key challenge.
There is also increased demand for green and sustainable buildings, which presents opportunities for Singapore companies that are specialising in the design of green buildings, client management systems, construction management systems, IT, and security. You can also capture opportunities across the value chain, including architecture design, interior fit-outs, landscape, lighting, signage and innovative construction methods that can help African developers differentiate their developments or lower construction costs.