In addition to smaller productions of other agricultural products, like papaya thousand tons , coconut 92 thousand tons and coffee 41 thousand tons. Agriculture is the second largest contributor to Kenya's gross domestic product GDP , after the service sector. The principal cash crops are tea, horticultural produce, and coffee; horticultural produce and tea are the main growth sectors and the most valuable of all of Kenya's exports.
The production of major food staples such as corn is subject to sharp weather-related fluctuations. Production downturns periodically necessitate food aid—for example, in aid was needed for 1. However, the expansion of credit to the agricultural sector has enabled farmers to better deal with the large risk of agriculture based on rainfall and the dramatic fluctuations of the prices of agricultural products.
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.
Resource degradation has reduced output from forestry. In roundwood removals came to 22,, cubic meters. Fisheries are of local importance around Lake Victoria and have potential on Lake Turkana. Kenya's total catch reported in was , metric tons. 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.
Kenya has no significant mineral endowment. The majority of this is contributed by the soda ash operation at Lake Magadi in south-central Kenya. Thanks largely to rising soda ash output, Kenya's mineral production in reached more than 1 million tons. 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. All unextracted minerals are government property, under the Mining Act.
The Department of Mines and Geology, under the Ministry of Environment and Natural Resources, controls exploration and exploitation of minerals. This represents only a slight increase since independence. The rapid expansion of the sector immediately after independence stagnated in the s, hampered by shortages in hydroelectric power , high energy costs, dilapidated transport infrastructure , and the dumping of cheap imports.
However, due to urbanisation, the industry and manufacturing sectors have become increasingly important to the Kenyan economy, and this 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.
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. Other initiatives to strengthen manufacturing include favourable tax measures, including the removal of duty on capital equipment and other raw materials.
The largest segment 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 balance. Kenya's installed capacity stood at 1, megawatts a year between and Shortfalls of electricity occur periodically, when drought reduces water flow.
In and , for example, drought prompted severe power rationing, with economically damaging hour blackouts. Frequent outages and high cost of power remain serious obstacles to economic activity. Tax and other concessions are planned to encourage investment in hydroelectricity and in geothermal energy , in which Kenya is a pioneer.
The government plans to open two new power stations in , Sondu Miriu hydroelectric and Olkaria IV geothermal , but power demand growth is strong, and demand is still expected to outpace supply during periods of drought. Hydrocarbon reserves were recently found in Kenya's semi-arid northern region of Turkana after several decades of intermittent exploration.
Offshore prospecting also continues. Kenya Petroleum Refineries , a joint venture between the government and several major oil corporations, operates the country's sole oil refinery in Mombasa. The refinery's production is transported via Kenya's Mombasa—Nairobi pipeline. The tourism sector exhibited steady growth after independence and by the late s had become the country's principal source of foreign exchange.
In the late s, a terrorism-related downturn in tourism followed the bombing of the U. S Embassy in Nairobi and subsequent negative travel advisories from Western governments. The government of Kenya and tourism industry organisations have taken steps to address security issues and to reverse negative publicity, including establishing a tourist police and launching marketing campaigns in key tourist origin markets. Tourists are attracted to the coastal beaches and the game reserves , notably the expansive Tsavo East National Park and Tsavo West National Park 20, square kilometres in the southeast.
The majority of tourists are from Germany and the United Kingdom. Kenya has also contributed to boosting tourism in other countries; the Nairobi-headquartered Serena Hotel is the most consistently high-rated hotel in Pakistan. Kenya is East Africa's hub for financial services.
The Kenya banking system is supervised by the Central Bank of Kenya. As of late July , the system consisted of 43 commercial banks down from 48 in , several non-bank financial institutions , including mortgage companies, four savings and loan associations, and many foreign-exchange bureaus.
Two of the four largest banks, the Kenya Commercial Bank and the National Bank of Kenya , are partially government-owned, and the others, Barclays Bank and Standard Chartered , are majority foreign-owned. Most of the smaller banks are family-owned and -operated. Kenya has a number of high profile accounting, tax and audit firms having a presence in the region providing financial services. The number employed outside small-scale agriculture and pastoralism was about 6 million.
In recent years, Kenya's labour force has shifted from the countryside to the cities, such as Nairobi, as Kenya becomes increasingly urbanised. The labour force participation rate in Kenya has been constant from to for both women and men. In the past 20 years, Kenyans have moved away from family farming towards jobs that pay wages or to start small businesses outside of agriculture. According to the World Bank Kenya Economic Update, "Men are much more likely than women to hold wage jobs, and women are more likely to work on family farms.
Twice as many men as women hold wage jobs, and more men work principally in wage jobs than on family farms. Most Kenyans are now striving to get modern, wage jobs. In this number had increased to 5. In Kenya, the "Jua Kali" sector is another name for the informal economy, also described as non-farming self-employment. As a result, informal sector employment does not contribute to Kenya's GDP.
The World Bank characterizes non-farm self-employment to include jobs such as "street vendor, shop owner, dressmaker, assistant, fishmonger, caterer, etc. The drawbacks of the informal economy are that it promotes smuggling and tax evasion, and lacks social protection. Most members of the informal sector have low educational attainment but are responsible for developing all of their own skilled labour through apprenticeships.
Many choose to enter the informal economy due to the lack of fees, shorter training sessions, and the availability of practical content that is largely absent from formal education. The rising cost of education and lack of guarantees of future employment have caused many workers to transfer to informal apprenticeships.
Customary law has some adverse impacts on women in the informal sector. This restricts the amount of credit that women entrepreneurs might otherwise use to enter either the formal or informal sector. Some examples of discriminatory statutes in the constitution are the Law of Succession Act, the Divorce Laws, and the Children's Act The economy's heavy dependence on rain-fed agriculture and the tourism sector leaves it vulnerable to cycles of boom and bust.
Half of the sector's output remains subsistence production. Kenya's economic performance has been hampered by numerous factors: heavy dependence on a few agricultural exports that are vulnerable to world price fluctuations, population growth that has outstripped economic growth, prolonged drought that has necessitated power rationing, deteriorating infrastructure, and extreme disparities of wealth that have limited the opportunities of most to develop their skills and knowledge.
Poor governance and corruption also have had a negative impact on growth, making it expensive to do business in Kenya. Increased levels of insecurity brought on from terrorism has become one of the largest impediments to sustainable growth. Despite these challenges, two thirds of Kenyans expect living conditions to improve in the coming decades.
This article incorporates text from a scholarly publication published under a copyright license that allows anyone to reuse, revise, remix and redistribute the materials in any form for any purpose: Ellis, Amanda; Cutura, Jozefina; Dione, Nouma; Gillson, Ian; Manuel, Clare; Thongori, Judy. Directions in Development; Private Sector Development. Washington, DC Please check the source for the exact licensing terms. From Wikipedia, the free encyclopedia.
Economy of Kenya Nairobi is the financial centre of Kenya. Agriculture : Inflation CPI. Population below poverty line. Gini coefficient. Human Development Index. Ease-of-doing-business rank. Uganda China FDI stock. Current account. Gross external debt. Public debt. Budget balance. Credit rating. Further information: Kenya Vision Main article: Kenya Economic Stimulus Program. Main article: Agriculture in Kenya.
Further information: Energy in Kenya. Main article: Tourism in Kenya. International Monetary Fund. Retrieved 29 September World Bank. Kenya National Bureau of Statistics. Retrieved 1 April Retrieved 15 June Retrieved 18 April Central Intelligence Agency. Retrieved 11 December Retrieved 17 January Retrieved 24 November Retrieved 26 May The Guardian.
Retrieved 31 May Healy Consultants. Retrieved 2 September Archived from the original on 30 September Retrieved 30 September Capital Business Kenya. Retrieved 14 April Retrieved 18 November See inline comment how to fix. Kenya Government The Brookings Institution. Retrieved 23 May June The economic consequences of the pandemic are likely to have a far greater impact on the long-term health, wellbeing and poverty levels of the population as a whole than the predicted fatalities caused directly by the disease.
Sectors worst hit by the virus include the labour force, housing, transport, health, trade and tourism. The supply and demand for goods and services in these sectors have been significantly hampered. Furthermore, the restriction of movement in and out the country has dwindled the revenues from the tourism and aviation sectors, while delays at borders due to testing of truck drivers have resulted in losses of profits to business owners.
Kenya is facing a triple crisis — the coronavirus pandemic, locust infestation and floods. Since the end of December , the country has been facing its worst locust infestation in 70 years,  and by mid-May , floods claimed the lives of people in central and northern Kenya. Kenya is a country with very high rates of food poverty, which also increasingly imports food from neighbouring countries.
In most areas of the country — particularly Nairobi and Mombasa, which have been hit the hardest by Covid — people are concerned about having enough money to buy the food they need due to reduced earnings. Changes in food-purchasing habits present an imminent threat to food security in Kenya. This is particularly the case for households living below the poverty line, who have resorted to purchasing only essential foodstuffs during the pandemic.
Measures imposed by the government of Kenya to mitigate the spread of Covid are resulting in job losses, both for casual workers in informal sector and daily-wage earners in the formal sector, both of which employ a high proportion of women. Due to curfews and limited movement of people, many roles have become redundant, resulting in job losses or unpaid leave.
Workers who already live in poverty and cannot afford to have precautionary savings consequently face a high risk of falling into poverty and might experience even greater challenges in regaining their livelihoods after the pandemic. A survey conducted by the Kenya National Bureau of Statistics KNBS in May indicates that the labour participation rate in the country has fallen significantly as a result of the pandemic. The reduction has been caused by job losses in both the informal and formal sectors.
The virus has disrupted the flow of revenues and limited the supply and demand for goods and services, pushing employers to use different coping mechanisms to stay afloat. Employers have been forced to downsize the workforce, give unpaid leave or make temporary layoffs.
According to the KNBS survey, the virus has also disrupted the workflow as a result of curfews and requirements for people to stay at home. The average number of hours of work available per week for employees has significantly fallen in almost all sectors of the economy. The impact of this can especially be seen in the education sector and the hotel industry and has in turn contributed to reduced revenues and job losses. Moreover, there is uncertainty about when most workers will be able to return to their jobs.
About Measures taken by the government to slow the spread of infection have resulted in increased costs for both transport operators and passengers. The government through the Ministry of Transport has instituted a range of measures for public transportation. These include reduction of passenger numbers by half; the requirement for passengers and vehicle operators to wear a mask at all times while on public transport; and provision of hand washing and sanitising facilities at the point of boarding.
These measures have not only increased the cost incurred by vehicle operators but also reduced the number of passengers using public transport due to the rise in fares charged by operators to offset higher costs. The increase varies with proximity to the places that have reported a high number of Covid cases and urban centres where there is frequent use of public transport.
Due to the high cost of transport, Kenyans — particularly people living in poverty and the vulnerable — who have previously depended on public transport have resorted to other modes of travel such as walking and use of bicycles or motorbikes. According to the KNBS survey, The survey also indicated that during April , middle- and upper-class Kenyans opted for taxis and private vehicles, while some employers provided transport for their staff. Public transport providers also suffered losses as many workers a high proportion of whom use public transport to commute elected to work from home due to the virus.
Notwithstanding certain relaxations, measures such as working from home, social distancing while on public transport, hand sanitising and washing will most likely remain in place in the medium term. This makes it likely that higher fares for public transport will also remain in place. The negative impact of this on the economy can only be mitigated if low-income earners resort to less expensive means of transport, including bicycles or motorbikes.
People living in poverty are finding it difficult to meet their daily expenses and pay bills, including rent, as a result of job losses, pay cuts or unpaid leave. Kenyans, particularly those relying on casual work, find it difficult to pay rent. Conversely only Reduced earnings and job cuts were mentioned by the respondents as the main cause of missed payments in rent. Other issues mentioned include unemployment and delays in employee earnings occasioned by the virus see Figure 4.
By April , only 8. This scenario is expected to continue for some time as a result of ongoing uncertainty about incomes caused by the virus. Some landlords have resorted to ending contracts of tenants while others have locked those who default on rent out of their homes or severed basic services such as water supply. The government began employing containment measures following the presidential speech on 25 March These measures were deployed on an incremental basis as the virus intensified.
At the outset, the Ministry of Health began a nationwide campaign promoting basic hygiene which included washing hands, using hand sanitisers and ensuring social distancing at all times. As the virus continued to spread, measures became stricter and public gatherings including religious services were suspended, wearing of masks was introduced, learning institutions were closed and employees with the exception of essential caregivers were encouraged to work from home.
Furthermore, travel restrictions were imposed on both citizens and non-citizens, limiting movements to and from the country. In April , the government suspended prison visits and the number of passengers allowed on public transport was reduced by half.
Masks were required to be worn at all times outside of the house and in both public and private vehicles. Business operators were required to maintain basic hygiene and ensure social distancing in business premises. They were required to provide hand-washing facilities at their premises and regular disinfection was conducted in high-risk areas such as Nairobi and Mombasa.
As the number of cases increased to hundreds, dusk-to-dawn curfews were imposed from to , reducing movement at night except for caregivers. The curfew has had various socioeconomic impacts especially on persons who live hand to mouth. Moreover, police brutality and arrests during curfews hours have worsened the situation for many.
When the government realised that persons travelling into the country were not adhering to self-quarantine measures, a mandatory self-quarantine was imposed at designated government facilities at a cost to the individual. This was, however, rescinded, and now individuals who test positively receive treatment at costs borne by the government.
Learning institutions, especially universities, have adopted online teaching and the government has closed border points with Uganda, Tanzania and Somalia. At the time of writing this paper, the virus is spreading through intra-county movement which has increased infections in counties neighbouring the hotspots.
The government has mitigated this by imposing lockdowns in places that have had rapid increases in positive cases. The government is now looking at different ways to ease the measures imposed in the past. It has opened restaurants and is preparing to lift the curfew that has been in place since March The president has provided a fiscal stimulus package for Kenyans, particularly those living below the poverty line. The government has created a Covid emergency fund to support people living in poverty and the vulnerable in Kenya against the impacts of the virus.
The funds will be supported by proceeds from corruption assets seized by the government over time. Furthermore, the national treasury has reallocated funds meant for travel and accommodation of state agencies to the fight against Covid It will additionally ensure motivation of frontline staff through provision of an additional welfare package for health workers. The money will go into refurbishing hospitals, improving equipment, and strengthening health systems at county level.
Weekly stipends to poor and vulnerable households have also been launched to cushion households — particularly within Nairobi. Further to this the CBK has, in collaboration with telecommunications provider Safaricom, waivered mobile money transaction charges for transactions of up to KES1, to reduce cash handling which increases the spread of virus. Daily limits for mobile money transactions have also been increased to allow sending and receiving of money during the pandemic.
Lastly, the threshold for submitting negative credit information has been revised to provide additional liquidity in the economy. Moreover, the CBK has revised its rates from 8. Throughout Africa, the pandemic is continuing to have an impact and Kenya, like most African countries, faces serious resource constraints, fragile health systems and lack of a clear strategy to fight the virus.
To ensure socioeconomic recovery within a reasonable period, the government should put in place plans and resources that do not continue to weigh disproportionally on people living in poverty. The pandemic has highlighted, more than ever, that neglecting certain sectors make people living in poverty more vulnerable. These are health, social protection, housing and sanitation and hygiene.
There needs to be more scrutiny of budget plans, their execution, and performance of these sectors, all of which should support those living in poverty. Re-opening the economy whilst also taking care of health concerns has been a balancing act for governments across the world, including Kenya. The country has a large population living below or just above the poverty line. It is this category of the population that are most affected by the impact of the pandemic.
Reduced earnings from sluggish economic activities and job losses as a result of confinement measures by the government have to be balanced against consideration of the daily needs of those living in poverty, as well as now-looming food insecurity across the country.
Sustaining local industries micro, small and medium businesses that provide jobs to people living in poverty should be prioritised in the short and medium term. This could be through access to loans, waiver of license fees and taxes.
The government should prioritise tender awards to industries that are able to produce or provide input for the production of protective equipment such as masks and hand sanitisers, and a bailout fund should be launched to keep these industries afloat.
Poverty as mentioned in the paper is in reference to proportion of the population that cannot afford the basic basket of goods as measured by the food and overall poverty lines. Government of Kenya is encouraging social distancing at all times, hand sanitising and washing and wearing of masks while on transit or visiting places with high human traffic. Ministry of Health Kenya.
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