About
Kenya
Kenya was a British colony and protectorate from the 1890s until independence
in December 1963. The country's first president, Jomo Kenyatta, transformed Kenya
into a de facto single-party state as leader of the Kenya African National Union
(KANU) party, which established and maintained political dominance. After his
death in 1978, Mr. Kenyatta was succeeded by Daniel arap Moi who remained in office
up to year 2002.
The Country is now ruled by the newly elected Emilio Mwai
Kibaki... more
Kenya
at a Glance - 2000
WTO:
member
Status: Developing
Country
ACP: member
Population 30.1
million
Population growth rate 2.4%
GDP growth rate (2000) - 0.2%
Percentage population
in agriculture 50
Agriculture as percentage of
GDP 30
Kenya at a glance
in detail
History
Kenya was
a British colony and protectorate from the 1890s until independence in December
1963. The country's first president, Jomo Kenyatta, transformed Kenya into a de
facto single-party state as leader of the Kenya African National Union (KANU)
party, which established and maintained political dominance. After his death in
1978, Mr. Kenyatta was succeeded by Daniel arap Moi who has remained in office
since.
Kenya became a de jure one-party state from 1982 until 1992, when more
parties were allowed following domestic and foreign pressure on the government.
Nevertheless, Mr. Moi led the KANU party to election victories in 1992 and 1997.
Although KANU has dominated Kenyan post-independence politics, legalized pluralism
in 1992 led to the emergence of several opposition parties mainly based on ethnic
lines. In the 1997 general election, the combined vote for the opposition exceeded
that for KANU, but as separate parties they could not gain control of the parliament
or the presidency. President Moi's tenure is constitutionally limited to two terms
and he is currently serving his last term, which ends in 2002.
In June
2001, a cabinet reshuffle put members of the opposition National Development Party
(NDP), headed by Raila Odinga, into key cabinet slots, forming an unprecedented
coalition government. On March 18, 2002, in an historic merger, KANU officially
absorbed the NDP, revolutionizingKenyan politics, and setting the stage for general
elections expected by the end of the year. The merger is seen as critical to the
ruling party's chances for winning the general election. The merger has led to
a major shake-up in the top positions in the ruling party, with Uhuru Kenyatta,
the 41-year-old son of Kenya's founding father becoming one of four party vice-chairmen,
confirming him as a front-runner in the race to succeed President Moi. The NDP
leader, Raila Odinga, is the new party's general-secretary.
Kenya
has been and remains a relatively stable country. It has not experienced the major
ethnic and civil conflicts that have wracked most of her neighbors, although in
the early 1990s politically-instigated ethnic clashes resulted in hundreds dead
and thousands displaced. Similar clashes on the coast in 1997 seriously affected
tourism. Kenya is multi-ethnic and administrative arrangements closely parallel
ethnic boundaries. The largest ethnic groups are the Kikuyu, Luhya, Luo, Kamba
and Kalenjin.
Economy
Kenya's economy is reasonably diversified,
though most employment is dependent on agriculture, which contributes 24 percent
of GDP. Kenya is the world's third largest exporter of tea, which, together with
coffee and horticultural products, contributes about 47 percent of total merchandise
exports. Tourism accounts for another 19 percent of Kenya's GDP, and is the second
most important source of foreign exchange. The industrial sector currently contributes
only 18 percent of GDP, and is a growing source of exports in the East African
region.
Kenya enjoyed strong economic growth from independence until
the 1970s. The average GDP growth rate declined from 6.5 percent between the 1960s
and the 1970s to about 2 percent in 1990-1999, below the average population growth
rate of 2.5 percent. Private investments fell by 7 percent in real terms between
the late 1980's and the first half of the 1990s, and domestic savings rates fell
correspondingly from over 20 percent to 16 percent during the same period.
Kenya's
total foreign debt is high, but debt service is fairly reasonable, at 27 percent
of foreign exchange receipts in 2000, because of the large proportion of concessional
debt. Interest payments on domestic debt have remained a serious burden, accounting
for 10 percent of government revenues.
Development Picture/Donor
Coordination
In the 1980s, Kenya was among the major aid recipients in
Africa. The 1990s have witnessed a steady decline in development assistance to
Kenya occasioned by a perception of poor governance and mismanagement of public
resources and development assistance. In 1997, major donors to Kenya formed an
Economic Governance Group, chaired by the World Bank, to address issues related
to governance and assistance programs. This has now been superseded by the Kenya
Coordination Group, which was recently reactivated by the Government to foster
improved donor coordination and cooperation. It will be chaired by the Ministry
of Finance, with meetings facilitated by the UN, World Bank, and IMF. Local Non-Governmental
Organizations also have a strong presence in Kenya.
World Bank Role
The World Bank granted its first loan to Kenya in 1960. The World Bank currently
supports 13 projects (including GEF) in Kenya with a total commitment of $711
million. Infrastructure accounts for 41 percent of the commitment, economic management
29%, social sectors 18 percent, and agriculture/environment 12 percent. In August
2000, the World Bank approved an Economic and Public Sector Reform Credit of US$150
million to support Kenya's economic recovery efforts. This was the first new credit
to Kenya from the World Bank for three years - with the exception of the El Nino
Emergency Infrastructure Credit that was approved in 1998 to assist in the reconstruction
of vital infrastructure destroyed by floods. The Bank is also helping the Government
to address HIV/AIDS through two credits of US$50 million each: a multi-sector
HIV/AIDS credit, and a Decentralized HIV/AIDS and Reproductive Health credit.
In addition, an Emergency Power Supply credit for US$72 million was approved in
October 2000 to assist the government in implementing emergency measures to address
the power supply crisis brought on by a devastating drought. A Regional Trade
Facilitation Project and a Public Sector Management Technical Assistance Project
have also been approved. The International Finance Corporation, the World Bank
Group's private-sector lending arm, is also active in Kenya with an investment
of $112 million in 34 projects, plus an additional $24 million in participations.
MIGA's portfolio in Kenya consists of two contracts of guarantee in the services
and infrastructure sectors with a US$42.2 million gross exposure and a US$23.5
million net exposure. The total amount of Foreign Direct Investment facilitated
to date is US$56.5 million.
Contacts
Mr. Makhtar Diop
Country Director
Hill Park Building, Upper
Hill, Nairobi, Kenya
Tel (254-2) 260-3300
Fax (254-2) 260-3300
E-mail: Mdiop2@worldbank.org
Ms. Melanie Marlett
Country Program
Coordinator
1818 H Street NW, Washington DC 20433
Tel. (202) 458-1858
Fax (202) 473-5453
E-mail: Mmarlett@worldbank.org
c.c, www.worldbank.org
Main
Cash crops Coffee,
Tea, Hides and skins
Main
Food crops Maize,
Sorghum, Cassava, Beans, Fruit
Added
value agricultural products cigarettes
Agriculture
and Economy
Kenya
is the richest country in the region and has enjoyed several decades of relative
stability. The country also has a relatively diversified economy although manufacturing
still represents only about 15% of GDP. The Kenyan economy grew steadily from
independence as the government encouraged inward investment and competition. Import
and export licensing was abolished and the exchange rate was allowed to float
freely. Many state enterprises have been privatised and the public sector now
plays only a minor role in production and distribution. In the 1990s the economy
began to falter. Investments and savings fell. In recent years, international
backing has frozen due to the failure of the government to implement anti-corruption
strategies. The government was also considered to have mismanaged public resources
and development assistance.
Although
subsistence farming still represents half of agricultural output, the agricultural
sector includes many large-scale commercial farms, plantations and specialist
horticultural units. Agricultural growth has been restricted, however, due to
shortages in arable land, lack of irrigation, poor supply of seed, recurrent drought
and inadequate storage facilities. Land shortages have provoked some farm occupations
but nothing near the scale of occupations in Zimbabwe. Domestic food production
now fails to meet local demand and in 2000 food imports amounted to 4.5 billion
Kenyan shillings.
Horticulture
and flower production have been growth industries and now represent Kenya’s
second largest export commodities. Smaller producers of these products situated
further away from the main markets have difficulties selling their output in times
of plentiful supply. Sugar production has been hit by the massive dumping of imports
and local production now fails to meet local demand. There is now reduced state
control of grain markets. Co-operatives and private sector producers represent
20% of the market which has stimulated grain production. Maize imports are restricted
by a 25% import tariff. The low price of beans has encouraged imports from lower
cost producers in Uganda, Ethiopia and Tanzania.
Coffee
production has been disrupted by clashes between rival farmers over management
of co-operative societies. The Coffee Board of Kenya has been accused of imposing
high costs on producers and it now separates its research and disease control
activities from marketing. 30% of coffee production costs go into disease control
which may be alleviated by the introduction of the new RUIRU 11 resistant variety.
Kenya produces
200,000 tons of tea per year but production is subject to frost damage. The UK
and Pakistan are the largest customers but there has been a dispute with Egypt
recently over import duties. Smaller tea producers are adversely affected by poor
processing equipment and inadequate roads, which has led to high levels of wastage.
Foodnet
Projects and Other Market Studies
Kenya
Reports
Industrial
Potential for Cassava in Kenya
Investigation
of the viability of a farmer based network for on-line market information centres
in Kiambu District, Kenya
Market
study demand for Value added Cassava Products, Starch, Flour and Snack foods
A
market survey for Potatoes in Njabini, Kenya
Feasibility
study on commercial Establishment & Operation of Irish Potato storage facilities
in Kenya
Analysis
of Potential Market for Vit.A rich S. Potatoes for Improved Nutrition & Food
security in Rural House holds of Siaya District, Kenya
Establishment
of a Small Scale Fruit & Vegetable processing Plant in Machakos District of
Kenya
Also read about the The
Kenya Agricultural Commodity Exchange, Ltd. (KACE), a private sector firm,
which was launched on July 16, 1997, serving as an exchange for agricultural commodities.
Visit
the official website at:
http://www.kacekenya.com/ 
