The Kenya Economy
The Kenya economy can only really be described after 1963 when Kenya became an independent nation after years of British colonial rule. In the more than forty years since independence, the Kenya economy has had many ups and downs.
The First Ten Years
The first decade of Kenyan independence showed great economic growth and a steadily increasing gross domestic product. Overall, the entire country saw high levels of development, investment and production. Next to a relatively stable political and governmental system, this also had to do with the generous support that Western countries were giving to pro-capitalist Kenya. But after 1974, the economy of Kenya entered a period of stagnation.
The Next 20 Years
Due to an unfortunate string of poor government decisions, the Kenya economy began to slow during this period as their agricultural and manufacturing sectors became uncompetitive on the world market. Too many controls on foreign exchange and imports made the country less appealing to international investment.
Changes in the 1990s
There were many major changes in the 1990s, including the removal of price controls, foreign exchange controls and import licensing. Large publicly-owned companies were privatized and several new monetary policies were introduces, thanks to assistance from the World Bank and the International Monetary Fund.
The GDP finally began to improve again. Many reforms were not successful, leading to the suspension of monetary assistance from both the World Bank and the IMF. Progress has see-sawed back and forth between improvement and failure in the past decade, leading up to the 2002 election of President Kibaki.
The Kenyan Economy Today
President Kibaki started a sizable program of reforms and changes in the government structure and the economics of the country. The IMF is once again working with Kenya, providing funds for many ambitious anti-corruption and poverty reduction programs. Trade agreements have been reached between Kenya and neighbours Tanzania and Uganda, to improve the movement of goods and people between these countries.
The Kenya economy has been growing each year since 1990, with the exception of 2000. in 2005 and 2006 economic growth figures reached a top of 5.7% and 6.1%, respectively.
The unrest following the contested 2007 presidential elections has again threatened to derail the progress in Kenya. It's hoped that the proposed power-sharing agreements between the two leading political parties will put an end to the problems and the country will not suffer economically any further.
Important Parts of the Economy
Though the country was built on agriculture, today one of the largest parts of the Kenya economy is the tourism market. Between 1 and 2 million foreign tourists visit the country each year, bringing in between US$ 800 million and 1 billion annually. Adventure travel has become a booming business, and tourism trips to the various safari parks has greatly improved the financial position of Kenya.
Kenya is the biggest exporter of tea in the world. With roughly US$ 1 billion in revenues (in 2007), tea exports account for two-thirds of agricultural exports. Flowers have been a major growth area during the last years. In 2007, Kenya’s exported 90,000 tons of flowers for a total of US$ 700 million. Kenya also ranks number 17 on the list of biggest coffee exporters. Kenyan coffee is a delicacy around the world. In 2005, Kenya earned US$ 131 million with coffee exports.
Though it is far from being considered a financial powerhouse on a global scale, the Kenya economy is doing considerably better than many other African nations.
Nairobi Business: Centre of the East African Economy
The Kenya Real Estate Market
Banks in Kenya: Overview
Kenyan Coffee - A Top Kenyan Export Product
The Kenyan Tea Industry
Causes of Poverty in Kenya
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