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Kenya Kenya

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EconomicPoliticalStructural

Kenya – Quick View
ECR score38.71 (Mar 2011)
ECR score102 (Mar 2011)
Economic
GDP (Q3 2010)USD 4.54 billion
GNI per capita PPP (2010)USD 1,628
FDI inflow (2008)USD 51.8 million
Inflation (February 2011)6.54%
Central bank assets (June 2010)USD 4072.82 million
Unemployment rate12.7%
Government deficit (June 2010)USD 1980.2 million
Tax revenue November (2010)USD 2.55 million
Political
Government typeRepublic
Recent political crisisNA
Economic freedom score (2011)106th
Freedom of information score (2010)70th
Corruption perception index (2010)154th
Structural
Birth rate39 per '000
Population balanceUnder 14 – 42.8%
Population balanceOver 60 Males – 3.8%
Population balanceFemales – 4.4%
Life expectancy yearsMale – 53.7 years
Life expectancy yearsFemale – 54.5 years
Mortality rate12 per '000
Literacy rate87%
Internet access8.6%

[Top] Economic Overview

Kenya has a market based economy with a liberalised foreign trade policy and relies mainly on agricultural production and tourism.

GDP for the third quarter of 2010 was KES 381.73 billion compared to KES 359.67 billion in the corresponding period in 2009.

The GDP growth rate declined from 5.6% in Q1 2009 to 0.5% in Q3 2009 and rose again to 6.1% in Q3 2010.

Kenya GDP and GDP Growth Rate

(Source: Statistics)

GNI per capita at PPP

The GNI per capita at PPP in 2010 was  USD 1,628 compared to USD 1,449 in 2005.

 

Kenya GNI per capita PPP

(Source: UNDP)

For the fiscal year 2009-10, Kenya had a trade deficit of USD 6,245 million. Exports and imports in 2010 amounted to USD 4,894 million and USD 11,139 million respectively.

(Source: Central Bank)

Income tax

In Kenya, income tax on individual income varies from 10% to 30%.

 

Tax rates

Yearly income (KES)

Tax rate (%)

0 - 121,968

10

121,969 - 236,880

15

236,881 - 351,792

20

351,793 - 466,704

25

Above 466,704

30

(Source: taxrates.cc)

Corporate tax

The general corporate tax rate in Kenya is 30%. However, branches of foreign companies are taxed at 37.5%.

(Source: taxrates.cc)

 

Tax rates

Tax contribution

Total tax rate (% profit)

Corporate income tax

33.1

Social security tax

5.3

Single business permit - manufacturer

4.2

Standards levy

3.5

Training or apprentice tax

1.5

Advance Motor Vehicle tax

1

Single business permit - trader

0.8

Fuel tax - excise duty

0.5

Road maintenance levy

0.4

Tax on interest

0.4

Land Rates

0.3

(Source: doingbusiness.org)

Inflation rate

The inflation rate has declined from 14.69% in February 2009 to 5.18% in February 2010. In October 2010 the inflation rate declined further to 3.18%. However, in February 2011 the inflation rate increased to 6.54%.

Kenya Inflation Rate

(Source: Statistics, Statistics)

FDI inflow

In 2008, the inflow of FDI as a proportion of GDP was 2% and reached a value of USD 51.8 million.

(Source: Central Bank)

Banking sector assets

The table below shows the assets of the Central Bank of Kenya.

Currency Unit: shilling (KES)

Balance Sheet – Assets of Central Bank of Kenya (KES million)

 

June 2010

June 2009

Foreign Assets

283,189

247,648

Discounted Government Securities

31

15,010

Government Accounts

50,980

40,600

Other Assets

9,035

8,457

Total Assets

343,235

311,715

(Source: Central Bank)

Non performing loan ratios

The gross non-performing loans in November 2010 were KES 59.3 billion. The ratio of gross non-performing loans to gross loans has increased from 8.1% in November 2009 to 6.5% in November 2010.

(Source: Central Bank)

[Top] Financial Indicators & Government Financial

Consumer price index

The consumer price index increased from 104.66 in December 2009 to 109.38 in December 2010. In February 2011, the consumer price index reached 112.05, showing that prices of consumer goods in Kenya have increased.

 

 

Kenya Consumer Price Index

Base year February 1999=100

(Source: Statistics)

Interest rates on saving deposits / time deposits

Interest rates on saving deposits and time deposits (%)

Period

Saving deposits

Time deposits (0 to 3 months)

November 2010

1.4

3.61

October 2010

1.46

3.65

September 2010

1.47

3.59

August 2010

1.5

3.89

July 2010

1.55

4.21

June 2010

1.75

5.11

May 2010

1.76

5.26

December 2009

1.73

5.90

November 2009

1.71

5.98

October 2009

1.85

5.83

(Source: Central Bank)

 

Money supply (Currency in Circulation)

 

Money Supply (KES million)

 

January 2011

January 2010

Money supply (M1)

579,370

463,449

Money supply (M2)

1,117,478

917,034

Broad Money (M3)

1,288,918

1,067,271

(Source: Statistics)

Public sector borrowing requirement

 

Government Borrowing Requirements (KES billion)

 

November 2010

November 2009

Budget deficit

59.1

50.9

External debt reduction

-

1.1

Total

59.1

51.9

(Source: Central Bank)

Government expenditure

Government expenditure for the fiscal year 2009-10 was KES 727,665 million compared to KES 604,754 million for the fiscal year 2008-09. In October 2010, government expenditure reached KES 243,140 million. The total expenditure and net lending is estimated to be KES 918,000 million for the fiscal year 2010-11 which is 33.2% of GDP.

(Source: Central Bank)

 

Kenya Government Expenditure & Net Lending

(Source: Central Bank)

Public debt levels

 

Public debt (KES billion)

 

November 2010

June 2010 p

June 2009

External

597.6

565.5

537.4

Domestic

711.4

660.3

518.5

Total debt

1309

1225.7

1055.9

As % of GDP

51.8

48.1

44.1

p= external debt provisional

(Source: Central Bank)

Official exchange rate

In January 2011 the Kenyan exchange rate was KES 81.272 to the USD. (Source: Statistics)

 

Government finances

Fiscal balance

The country has had a fiscal deficit for the past three years. The fiscal deficit has increased to KES 166,880 million in June 2010  compared to KES 93,399 million in June 2009. The fiscal deficit in October 2010 was KES 50,050 million.

(Source: Central Bank, Central Bank)

Kenya Fiscal Balance

(Source: Central Bank)

Total revenue

The total revenue in June 2010 was KES 543,753 million compared to KES 511,355 million in June 2009. The total revenue in October 2010 was KES 193,090 million. The total revenue for the fiscal year 2010-11 is estimated to be KES 730,000 million making up 26.4% of GDP.

(Source: Central Bank)

 Kenya Total Revenue

Tax revenue

The revenue from tax increased from KES 184.8 million in November 2009 to KES 212.9 million in November 2010.

 

Tax revenue (KES million)

 

November 2010

November 2009

Income Tax

84.6

73.1

Value Added Tax

67.5

57.1

Import Duty

18.6

16.5

Excise Duty

32.3

29.8

Others

9.9

8.3

Total tax revenue

212.9

184.8

(Source: Central Bank)

Total grants

The total level of grants has declined from KES 25,448 million in June 2008 to KES 17,032 million in June 2010.

Kenya Total Grants

(Source: Central Bank)

Current account balance

The current account balance has been in deficit in recent years. However, the deficit decreased from USD 1,983 million in 2008 to USD 1,609 million in 2009.

 

Current account balance 2009-10 (USD million)

Period

Q4

 (April-June)

Q3

(January-March)

Q2

(October-December)

Q1

(July-September)

Amount

-20

164

-287

-485

(Source: Central Bank)


p = provisional

(Source: Central Bank)

Balance of payments

 

Balance of Payments (USD million)

 

June 2010

June 2009

Current account

-627

-2,296

Capital & financial account

903

1,874

Overall Balance

276

-422

Gross Reserves

5,009

4,822

(Source: Central Bank)

[Top] Labour Force and Employment Overview

The total labour force in Kenya was was 18,173,411.9 in 2008. The total labour force participation rate was 82% for 2008. The labour participation rate for men was 87.2% and 74.1% for women.

(Source: UN, World Bank)

Unemployment Rate

In 2006 Kenya had an unemployment rate of 12.7%. Of the total unemployed population 11.2% were male and 14.3% were female.

 

Unemployment rates (%)

Age (years)

2005-06

1998-99

15-19

19

24.3

20-24

32.6

27.1

25-29

20.9

15.5

30-34

8.3

10.8

(Source: UNDP)

Minimum wage

The minimum wage set by the government is less than KES 6000.

(Source: cotu-kenya.org)

Level of Unionisation

The Central Organization of Trade Unions (COTU) is the national trade union organisation in Kenya. It is affiliated with the International Confederation of Free Trade Unions (ICFTU).

The three unions registered in Kenya by the Registrar of Trade Unions include:

  • East African Standard Union
  • Ease African Standard Staff Union
  • Labour Trade Union of East Africa

(Source: cotu-kenya.org)

[Top] Political Stability

Kenya is a sovereign republic. The president is the head of state and the prime minister is the head of the government. The parliament, known as the National Assembly is unicameral. The parliament is made up of 224 statutory members, of which 210 are directly elected. The term of the parliament is five years.

(Source: ipu.org, electionguide)

Mwai Kibaki is the current President and Raila Odinga is the Prime Minister of Kenya. (Source: BBC)

The major political parties in Kenya are:

  • Party of National Unity (PNU)
  • Orange Democratic Movement (ODM)
  • Orange Democratic Movement-Kenya (ODM-K)

(Source: fco.gov.uk)

Regulatory environment

Kenya’s economic freedom score is 57.4, making it the 106th freest economy in the 2011 Index of Economic Freedom. Kenya ranks 14th out of 46 countries in the Sub-Saharan Africa region.

 

Kenya Economic Freedom Indices

(Source: heritage.org)

Corruption perception

The Corruption Perceptions Index (CPI) is a survey to measure the perceived level of corruption across countries worldwide. Kenya is ranked 154th on this list which indicates that the corruption levels in the public departments is fairly high.

Kenya has slipped in the CPI rankings since 2009 when it was ranked 146th with a score of 2.2. It indicates that the perceived level of corruption in Kenya has increased. (Source: transparency.org)

Freedom of information

Media in Kenya is diverse and more liberalised in comparison to other African countries. However, it ranks 70th in the World Press Freedom Index 2010 with a score of 19. This indicates that freedom of the media is limited to an extent.

(Source: rsf.org)

The various newspapers circulating in the country are:

  • Daily Nation
  • The Standard
  • East African
  • Taifa Leo

(Source: BBC)

Judicial system

The country’s judicial system is made up of various courts such as:

  • The Supreme Court
  • Court of Appeal
  • High Court
  • Magistrate Court
  • Specialised Courts
  • Tribunals
  • Kadhi Courts

The Supreme Court is the highest court in the country. It consists of a Chief Justice who is the President of the court, a Deputy Chief Justice and five other Judges. It reviews and determines appeals from the Court of Appeal or any other court or tribunal.

The Court of Appeal is the second highest court in the country and is made up of a minimum of 12 judges. The president of the court is chosen from the judges of the court of appeal. The court is legally empowered to hear appeals from the High Court and any other court or tribunal.

The High Court hears both civil and criminal matters. It has specialised divisions for civil, criminal, family, commercial, constitutional and judicial review.

(Source: judiciary.go.ke)

[Top] Demographic Overview

Population

According to the 2009 census, the total population of Kenya was 38,610,097 of which 19,192,458 were male and 19,417,639 were female. The previous census conducted in 1999, estimated the country had a population of 28.7 million which increased to 38.6 million by 2009 registering a growth rate of 34.49%.

(Source: Statistics)

 

Kenya Population by Gender

 

Gender Ratio

In 2009, there were about 99.9 males per 100 females indicating a balanced gender ratio in the country.

(Source: UN)

In 2009, about 42.8% of the population were below the age of 14. There were 3.8% males and 4.4% females in the age group above 60 years.

(Source: UN)

Mortality Rate

The crude death rate in 2008 was 12 deaths per thousand people. The infant mortality in the period 2005-2010 was 63.9 per 1,000 live births.

Birth Rate

In 2008, the crude birth rate was 39 births per thousand people.

Average Life Expectancy Rate

The life expectancy at birth from 2005-2010 was 53.7 years for males and 54.5 years for females.

(Source: World Bank, World Bank, UN)

Migration and Urbanisation

The number of international migrants in mid-2010 was 817,800 or 2% of the total population. (Source: UN)

The average urban population growth rate in 2005-2010 was 4%. According to the 2009 census, the urban population was recorded at 12,487,375 constituting 32.3% of the total population. (Source: Statistics, UN)

Racial/Ethnic environment

The major ethnic groups in the country include Kikuyu, Luhya, Kalenjin, Luo, Kamba, Kenyan Somali, Kisii, Mijikenda, Meru, Turkana and Maasai. Some of the other minority ethnic groups include Teso, Embu, Taita, Kuria etc.

(Source: Statistics)

The various religous groups represented among the population include Catholics, Protestants, Other Christians, Muslims, Hindus, Traditionalists and other religious beliefs. (Source: Statistics)

Human Development Index

Kenya is ranked 128th out of 169 countries in Human Development Index 2010. It indicates that the level of human development in the country is low. The Human Poverty Index focuses on the proportion of people below certain threshold levels in each of the dimensions of the human development index - living a long and healthy life, having access to education, and a decent standard of living.

(Source: UNDP)

[Top] Soft Infrastructure

Literacy rate

The total adult literacy rate in Kenya in the period 2005-2008 was 87%. In 2006, Kenya had an adult literacy rate of 61.5%, of which males attained a 64.2% and females a 58.9% literacy rate.

(Source: Statistics, UNICEF)

Education resources

The country has about 70,790 educational institutions and the primary school enrolment was recorded at 8.56 million in 2008. The secondary school enrolment has increased by 49% in 2008 compared to 2004. The enrolment in universities was recorded at 122,847 students in the fiscal year 2008-09.

The total expenditure on education for the fiscal year 2008-09 was KES 122 billion compared to KES 85 billion for the fiscal year 2004-05.  In 2008, about 26% of central government expenditure was allocated to education.

(Source: africaneconomicoutlook, UNICEF)

Healthcare

Government spending for the fiscal year 2008-09 amounted to KES 27.7 billion.

The number of health institutions in 2008 reached 5,712 resulting in an increase of 19.8% compared to 2004.

The major diseases affecting the country’s population are malaria, diarrhoea and respiratory diseases. About 9.31 million cases of malaria were registered making up 32.8% of all diseases reported. There were about 1.98 million cases of diarrhoea and 6.8 million cases of respiratory-system diseases reported in 2008. In 2009, almost 4,700 cases of cholera were reported leading to 120 deaths in the country.

(Source: africaneconomicoutlook, UNICEF)

[Top] Hard Infrastructure

Mass Public Transit

Roads are  the main mode of transport in Kenya. Buses are the main form of public transportation used. The railways in the country are operated by the Kenya Railway Corporation.

Ports

The major ports in Kenya include Port of Lamu, Port of Malindi and Port of Mombasa.

(Source:worldportsource)

Airports

Some of the major airports in Kenya are listed below:

Town

Airport name

Runway length (ft.)

George Smith Farm

George Smith Farm

11,800

Ileret

Ileret

5,200

Impala Farm

Impala Farm

6,500

Isiolo

Isiolo

5,000

Kabarnet

Kabarnet

5,200

Kilaguni

Kilaguni

5,200

Kisumu

Kisumu

6,600

Kulalu Ranch

Kulalu Ranch

6,500

Magadi

Magadi

5,700

Marsabit

Segel

5,100

Nairobi

Eastleigh

7,900

Nairobi

Jomo Kenyatta

13,500

Nairobi

Wilson

5,100

Nakuru

Nakuru

5,600

Narok

Narok

6,000

Takabba

Takabba

7,500

(Source: aircraft-charter-world)

Telecommunications networks

The number of internet users in 2009 was registered at 3.36 million compared to 3 million in 2008. The internet penetration rate has increased from 7.9% in 2008 to 8.6% in 2009.

Kenya Internet Users

(Source:internetworldstats)

The number of fixed telephone lines in Kenya has increased from 299,300 in 2004 to 664,100 in 2009 registering a CAGR of 17.3%. The usage of fixed telephone lines has increased from 0.86 per 100 inhabitants in 2004 to 1.67 per 100 inhabitants in 2009.

(Source: ITU)

The number of mobile cellular subscriptions also increased from 2,546,200 in 2004 to 19,364,600 in 2009 registering a CAGR of 50%.

The ratio of mobile cellular subscriptions to fixed telephone lines was 29.2:1, showing that the use of mobile phones is more than the use of fixed telephone lines.

(Source: ITU)

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