Kenya Overview of Economy for Foreign Investors 2025

Macroeconomic Indicators

• GDP (2024): KES 14.5 trillion (approx. USD 102 billion)
• Real GDP Growth Rate (2024): 5.3%
• Inflation Rate (April 2025): 6.7% (year-on-year)
• Unemployment Rate (2024): 5.7%
• Public Debt to GDP (2024): 69.4%
  (Source: Kenya National Bureau of Statistics, Central Bank of Kenya)

Main Economic Sectors

• Agriculture: Contributes approx. 21% of GDP; key exports include tea, coffee, horticulture, and floriculture.
• Manufacturing: Contributes approx. 7.6% of GDP; includes food processing, textiles, and cement.
• Services: Largest contributor at over 50% of GDP; includes telecommunications, banking, tourism, and transport.
• ICT: Kenya is a regional hub for mobile and digital services; mobile money penetration is above 80%.
• Construction and Real Estate: Growing sector with major infrastructure projects under Vision 2030.

Trade and Investment

• Key Export Markets: Uganda, Netherlands, United Kingdom, United States, Pakistan
• Key Imports: Machinery, petroleum products, vehicles, pharmaceuticals

• Memberships:
  • East African Community (EAC)
  • African Continental Free Trade Area (AfCFTA)
  • Common Market for Eastern and Southern Africa (COMESA)
  • FDI Inflows (2023): USD 1.2 billion
    (Source: UNCTAD, Kenya Investment Authority)

Currency and Financial System

• Currency: Kenyan Shilling (KES)
• Exchange Rate (May 2025): Approx. 1 USD = 132 KES
• Central Bank: Central Bank of Kenya (CBK), responsible for monetary policy and banking regulation
• Stock Exchange: Nairobi Securities Exchange (NSE)

Infrastructure and Connectivity

• Transport: Major upgrades to roads, rail (SGR), airports, and ports (Mombasa, Lamu)
• Energy: Over 75% of electricity from renewable sources (mainly geothermal, hydro, wind)
• Internet Penetration (2024): 43.8 million users (approx. 82% of population)

Labour and Demographics

• Population (2024): Approx. 55 million
• Median Age: 19.7 years
• Labour Force Participation: Over 60%
• Education: High literacy rate; English and Kiswahili are official languages

Legal Framework for Investment

• Investment Promotion Act: Administered by the Kenya Investment Authority (KenInvest)
• 100% Foreign Ownership allowed in most sectors, with exceptions in regulated industries (e.g., telecom, banking)
• Business Registration: Conducted via eCitizen platform
• Dispute Resolution: Commercial Court, Arbitration, and access to ICSID under BITs

Tax Environment

• Corporate Income Tax: 30% (resident companies), 37.5% (non-resident)
• VAT: 16% standard rate
• Withholding Tax: Varies by income type and residency
• Double Tax Treaties: In force with over 10 countries

Special Economic Zones (SEZs) and Incentives

• SEZs offer:
  • Reduced corporate tax (10% for first 10 years)
  • Exemption from VAT and customs duties
  • Repatriation of profits
  • Notable SEZs: Dongo Kundu SEZ, Tatu City

International Rankings

• Ease of Doing Business (World Bank 2020): Ranked 56th globally
• Global Competitiveness Index (WEF 2019): Ranked 95th globally