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Economy of Kenya

Kenya's economy is market-based with a few state-owned infrastructure enterprises and maintains a liberalised external trade system. The country is generally perceived as Eastern and central Africa's hub for Financial, Communication and Transportation services. Major industries include: agriculture, forestry and fishing, mining and minerals, industrial manufacturing, energy, tourism and financial services. As of 2015 estimates, Kenya had a GDP of $69.977 billion making it the 72nd largest economy in the world. Per capita GDP was estimated at $1,587.

The government of Kenya is generally investment friendly and has enacted several regulatory reforms to simplify both foreign and local investment, including the creation of an export processing zone. The export processing zone is expected to grow rapidly through input of foreign direct investment. An increasingly significant portion of Kenya's foreign inflows are remittances by non-resident Kenyans who work in the US, Middle East, Europe and Asia. Compared to its neighbours, Kenya has well-developed social and physical infrastructure.

As of March 2014, economic prospects were positive with above 5% GDP growth expected, largely because of expansions in telecommunications, transport, construction and a recovery in agriculture. These improvements are supported by a large pool of English-speaking professional workers. There is a high level of computer literacy, especially among the youth.

Sectors

Agriculture

The agricultural sector continues to dominate Kenya's economy, although only 15 percent of Kenya's total land area has sufficient fertility and rainfall to be farmed, and only 7 or 8 percent can be classified as first-class land.

Tea, coffee, sisal, pyrethrum, corn, and wheat are grown in the fertile highlands, one of the most successful agricultural production regions in Africa. Livestock predominates in the semi-arid savanna to the north and east. Coconuts, pineapples, cashew nuts, cotton, sugarcane, sisal, and corn are grown in the lower-lying areas.

Forestry and fishing

Resource degradation has reduced output from forestry. In 2004 roundwood removals came to 22,162,000 cubic meters. Fisheries are of local importance around Lake Victoriaand have potential on Lake Turkana. However, output from fishing has been declining because of ecological disruption. Pollution, overfishing, and the use of unauthorised fishing equipment have led to falling catches and have endangered local fish species.

Mining and minerals

Kenya has no significant mineral endowment. The mining and quarrying sector makes a negligible contribution to the economy, accounting for less than 1 percent of gross domestic product, the majority contributed by the soda ash operation at Lake Magadi in south-central Kenya. One of Kenya's largest foreign-investment projects in recent years is the planned expansion of Magadi Soda. Apart from soda ash, the chief minerals produced are limestone, gold, salt, large quantities of niobium,fluorspar,and fossil fuel.

Industry and manufacturing

Although Kenya is the most industrially developed country in East Africa, manufacturing still accounts for only 14 percent of gross domestic product (GDP). The industry and manufacturing sectors have become increasingly important to the Kenyan economy, and has been reflected by an increasing GDP per capita. Industrial activity, concentrated around the three largest urban centres, Nairobi, Mombasa, and Kisumu, is dominated by food-processing industries such as grain milling, beer production, and sugarcane crushing, and the fabrication of consumer goods, e.g., vehicles from kits. Kenya also has an oil refinery that processes imported crude petroleum into petroleum products, mainly for the domestic market. In addition, a substantial and expanding informal sector engages in small-scale manufacturing of household goods, motor-vehicle parts, and farm implements.

Energy

The largest share of Kenya's electricity supply comes from hydroelectric stations at dams along the upper Tana River, as well as the Turkwel Gorge Dam in the west. A petroleum-fired plant on the coast, geothermal facilities at Olkaria (near Nairobi), and electricity imported from Uganda make up the rest of the supply.

Tourism

Kenya's services sector, which contributes about 63 percent of GDP, is dominated by tourism. Tourists, the largest number from Germany and the United Kingdom, are attracted to the coastal beaches and the game reserves, notably, the expansive Tsavo East National Park and Tsavo West National Park (20,808 square kilometres) in the southeast. The government and tourist industry organisations have taken steps to address security issues and to reverse negative publicity.

Financial services

Kenya is East and Central Africa's hub for financial services. The Nairobi Stock Exchange (NSE) is ranked 4th in Africa in terms of market capitalisation.

The Kenya banking system is supervised by the Central Bank of Kenya (CBK). As of late July 2004, the system consisted of 43 commercial banks (down from 48 in 2001), severalnon-bank financial institutions, including mortgage companies, four savings and loan associations, and several score foreign-exchange bureaus.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy Of Kenya"

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