Economic overview
Kenya is East Africa’s largest economy, a position strengthened by last year’s discovery of oil. If exploration shows the deposits are commercially viable, oil exports could begin as early as 2016. But the discovery also highlights weaknesses in Kenya’s infrastructure. The country currently lacks the railways and pipelines needed to move workers and crude efficiently to and from the remote region where oil was discovered. Kenya’s main port at Mombasa needs upgrades, too; it has lost shipping market share to neighboring countries with more modern ports. China is among countries offering economic support and seizing the potential opportunity in Kenya. In August, China promised US$5 billion to support rail, energy and wildlife-protection projects.
Wildlife protection is key because Kenya’s world-famous reserves boost tourism, one of the country’s strongest economic drivers. Nearly 2 million tourists visit each year. Kenya also is one of the world’s biggest shippers of black tea, and it ships about a third of the flowers imported into the European Union. Gross domestic product growth was an estimated 4.7% in 2012 and is projected to tick up to 5.7% this year.
Business travel industry insight
Agriculture and, increasingly, oil drive much of the business travel to and from Kenya. The Jomo Kenyatta International Airport in Nairobi is the busiest airport in east and central Africa, and the seventh-busiest in Africa. It’s a gateway to destinations on five continents and serves 6 million passengers a year. But the airport isn’t operating at full capacity because a large fire in August shut down a portion of the international terminal. Officials are investigating the cause of the blaze. Before the airport fire disrupted travel, the government had said it aims to attract 3 million business and leisure travelers to Kenya by 2015.
Opportunities
- The discovery of oil in March 2012 promises to boost Kenya’s exports and help balance its trade deficit.
- This year’s national elections were peaceful, which bolstered political and economic stability.
- Education and basic services are improving for Kenyans, but much of the population still lives with inadequate sanitation, energy and clean water.
Challenges
- Sub-par infrastructure investment threatens Kenya’s long-term position as a regional economic leader.
- The country is hampered by corruption, which international lenders have cited as a potential obstacle to continued investment.
- Unemployment is a staggering 40%, and wages are low.
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