Kenya

Politics:

• Analysis

  Kenya politics: Uhuru Kenyatta wins presidential election by narrow margin

  Uhuru Kenyatta has been declared the winner of the presidential election held on March 4th. However, his very narrow margin of victory means that he faces a legal challenge in the Supreme Court by his defeated rival, Raila Odinga. There are positive and negative aspects to Mr Kenyatta's becoming the new president. On the plus side, he is the choice of just over 50% of the Kenyan voters and is unlikely to preside over any unwelcome policy shifts. On the minus side, both he and his running mate (and vice-president-elect), William Ruto, face trials at the International Criminal Court (ICC) for facilitating widespread violence after the disputed 2007 election. Critically, apart from isolated incidents, the 2013 election and its aftermath (at least to date) have been largely peaceful.

  On March 9th the Independent Electoral and Boundaries Commission (IEBC) declared Mr Kenyatta the winner of the presidential election. Provided the Supreme Court rejects Mr Odinga's legal challenge, Mr Kenyatta will be sworn in as Kenya's fourth president on March 26th. Of the 12.33m votes cast, which equates to a very high turnout of 86%, 6.17m (50.1%) were won by Mr Kenyatta, representing the Jubilee coalition, and 5.34m (43.3%) by Mr Odinga of the Coalition for Reform and Democracy, while Musalia Mudavadi came third with 0.48m (3.9%). This meant that Mr Kenyatta crossed the 50% threshold needed to secure a first-round victory and avoid a second-round run-off by a mere 8,418 votes. Given the failure of the IEBC's electronic counting and transmission systems, which obliged the commission to resort to manual tallying, and the initial confusion about the number of spoiled ballots (which were revised down from over 5% to just 0.9%), it is entirely feasible that a small error could have influenced the outcome. This explains Mr Odinga's decision to launch a legal challenge, and it is possible that the Supreme Court will call for a recount: the court's other options are to dismiss the challenge or annul the election. The final results of the simultaneous legislative, senatorial and county governor elections have not yet been released in full owing to the focus on the presidential race. Moreover, unlike in 2007, Mr Odinga believes he can trust the legal system and has pledged to accept any Supreme Court ruling on the results.

  Mr Kenyatta's first-round victory avoids the need for a run-off

  On the assumption that Mr Kenyatta is sworn in as president, there are positive and negative aspects to the new leadership team. On the plus side-and despite almost failing to clear the 50% hurdle-Mr Kenyatta garnered significantly more votes than Mr Odinga and was clearly preferred by Kenyan voters, especially given the high turnout. Pre-election opinion polls understated support for Mr Kenyatta by a large margin, suggesting either that he won over undecided voters at the last minute or that some of his backers did not reveal their true intentions to the pollsters. In addition, Mr Kenyatta's first-round victory has avoided the need for a run-off, which would have perpetuated the uncertainty and heightened the risk of violence.

  The ICC process may have negative implications for government functioning

  On the downside are the ICC cases facing Mr Kenyatta and Mr Ruto, which could disrupt government functioning because of the need for the defendants appear in court in The Hague. The trials have now been postponed from mid-April after the ICC accepted the defendants' request for additional time: Mr Ruto's hearing will start on May 28th, followed by Mr Kenyatta's on July 9th. However, Mr Kenyatta's case is not certain to go ahead, after the ICC, on March 11th, dropped the charges against his co-accused, Francis Muthaura, because of problems with witness statements. The trials will strain relations with key Western countries, such as the UK and the US, which maintain policies of having "essential" contact only with ICC suspects. Somewhat perversely, the ICC charges may have boosted Mr Kenyatta's appeal, by persuading some Kenyans to rally to his cause.

  The new president faces a different political landscape

  Mr Kenyatta, as Kenya's new president, will face a considerably different political landscape than his predecessors because of the major changes being implemented as part of the country's new constitution. In particular, presidential powers have been eroded, while the switch to a US-style system (as opposed to a UK-style system) means that cabinet ministers will no longer be members of parliament and will need to resign their seats if selected. In addition, Kenya will now have a bicameral parliament, including a senate, and some powers are being devolved to the 47 new counties. Under the pre-election agreement between Mr Kenyatta's The National Alliance and Mr Ruto's United Republican Party, the two parties will share cabinet seats equally.

  The absence of widespread violence and the willingness of Kenyans to vote in large numbers (albeit primarily along tribal lines) are perhaps of greater importance than the precise identity of the election winner. Alongside the new constitution, this bodes well for Kenyan democracy and will offer reassurance to investors, thereby boosting the economy. However, Mr Kenyatta will now need to justify the faith placed in him by Kenyans, while also juggling with the implications of the ICC process, which could, in theory, drag on for years. Uncertainties remain, but the election outcome means that prospects for stability have improved.

  

  March 11, 2013

• Background

  Kenya: Key figures

  Emilio Mwai Kibaki

  The veteran president (aged 80) won a second term in the 2007 election by a narrow margin, representing the Party of National Unity (PNU), a grouping of several parties, but was forced to share power with the opposition after post-election unrest. Mr Kibaki, from the dominant Kikuyu tribe, must stand down at the next election in March 2013, according to the constitution. His "hands-off" leadership style has been blamed for exacerbating inter-ministerial feuding.

  Raila Odinga

  The leader of the Orange Democratic Movement (ODM), Mr Odinga (aged 67) narrowly lost to Mr Kibaki in the December 2007 election, by a 46:44 margin, but the belief that he was robbed of victory sparked civil unrest. He was appointed prime minister with executive powers (a long-cherished aim) under the power-sharing agreement with the PNU and enjoys strong support among the Luo tribe (in western Kenya). He will hope to win the presidency in 2013.

  Musalia Mudavadi

  Appointed deputy prime minister (and minister for local government) under the power-sharing deal, Mr Mudavadi (aged 51) decamped from the ODM in April 2012 to establish his own party, the United Democratic Forum, which is loosely allied with the PNU. From the Luhya tribe in the west, his prospects of becoming president would rise if Mr Kenyatta's and Mr Ruto's campaigns were derailed by their pending International Criminal Court prosecutions.

  Kalonzo Musyoka

  The vice-president and minister of home affairs, Mr Musyoka (aged 58), split from the ODM before the 2007 election, forming ODM-Kenya, and allied with Mr Kibaki and the PNU after the poll in return for the vice-presidency. This led to frequent disputes with Mr Odinga about who was the effective second-in-command of the coalition. From his support base among the Kamba tribe in the east, Mr Musyoka will seek to become the next president in 2013, although he may struggle to secure nationwide support.

  Uhuru Kenyatta

  Mr Kenyatta (aged 50)-a Kikuyu, like the president-backed Mr Kibaki's re-election bid in 2007 (as he realised that Mr Kibaki would be sure of the Kikuyu vote). The son of Kenya's first post-independence president, Mr Kenyatta is from the next generation of politicians. After becoming deputy prime minister in the grand coalition, he intends to seek the presidency in 2013 but may be obliged to stand aside because of an impending ICC prosecution, starting in April 2013, over his alleged role in post-election violence.

  William Ruto

  Suspended from cabinet in late 2010 because of graft allegations (that were later dropped), Mr Ruto (aged 45) is another next-generation politician and a Kalenjin-like the former president, Daniel arap Moi. Mr Ruto switched from the Kenya African National Union (KANU) to the ODM in 2007, but his opposition to the new constitution led to a split with Mr Odinga. Mr Ruto may form an alliance with Mr Kenyatta to fight the 2013 election, but similarly faces an ICC prosecution, which could compromise his chances.

  Martha Karua

  The leader of the National Rainbow Coalition-Kenya (Narc-Kenya), Mrs Karua (aged 54), a Kikuyu, resigned as minister of justice and constitutional affairs in April 2009 after complaining about the slow pace of reform, although her party remains allied to the PNU. She will make an independent bid for the presidency in 2013 on an anti-corruption and human rights ticket.

  September 07, 2012

• Structure

  Kenya: Political structure

  Official name

  Republic of Kenya

  Form of state

  Unitary republic

  Legal system

  Based on English common law and the 2010 constitution: this provided for a new Supreme Court and a reformed executive and legislature.

  National legislature

  A bicameral parliament comprising a National Assembly and a Senate; the National Assembly has 337 elected members (including 47 women's representatives), plus 12 nominated members and the speaker (for 350 in total)

  National elections

  March 2013; next presidential and legislative elections are to be held in 2017-18

  Head of state

  President, directly elected: a candidate must cross the 50% threshold in a first round of voting (and secure at least 25% of the vote in more than half of the 47 counties) to secure victory, otherwise the two best-placed candidates must contest a second round

  National government

  A new government will be established after the swearing-in of the new president (tentatively set for March 26th 2013); cabinet seats will be divided equally between by the two parties in the election-winning coalition: The National Alliance and the United Republican Party

  Political parties in parliament

  The National Alliance (TNA), United Republican Party (URP), Orange Democratic Movement (ODM), Wiper Democratic Movement (WDM), United Democratic Forum (UDF), Kenya African National Union (KANU), Forum for the Restoration of Democracy-Kenya (Ford-Kenya), New Ford-Kenya, Kenya National Congress (KNC) and others (to be confirmed)

  National government

  President & commander-in-chief: Emilio Mwai Kibaki (PNU)

  Vice-president & home affairs: Kalonzo Musyoka (WDM)

  Prime minister: Raila Odinga (ODM)

  Deputy prime minister: Uhuru Kenyatta (TNA)

  Deputy prime minister: Musalia Mudavadi (UDF)

  Key ministers

  Agriculture: Sally Kosgei (ODM)

  Co-operative development: Joseph Nyaga (ODM)

  Defence: Yusuf Mohamed Haji (PNU)

  Education: Mutula Kilonzo (PNU)

  Energy: Kiraitu Murungi (PNU)

  Environment & mineral resources: Chirau Ali Mwakwere (PNU)

  Finance: Njeru Githae (PNU)

  Foreign affairs: Sam Ongeri (PNU)

  Higher education, science & technology: Margaret Kamar (ODM)

  Information & communication: Samuel Lesuron Poghisio (PNU)

  Internal security: Katoo ole Metito (PNU)

  Justice & constitutional affairs: Eugene Wamalwa (PNU)

  Labour: John Munyes (PNU)

  Land: James Orengo (ODM)

  Medical services: Anyang Nyong'o (ODM)

  Planning, national development & Vision 2030: Wycliffe Ambetsa Oparanya (ODM)

  Roads: Franklin Bett (ODM)

  Tourism: Danson Mwazo (ODM)

  Trade: Moses Wetangula (PNU)

  Transport: Amos Kimunya (PNU)

  Water & irrigation: Charity Ngilu (ODM)

  March 25, 2013

• Outlook

  Kenya: Key developments

  Outlook for 2013-17

  • Uhuru Kenyatta will be sworn in for a five-year term as Kenya's fourth president on March 26th, barring a successful challenge in the Supreme Court by his defeated rival, Raila Odinga.
  • Prospects for political stability have improved owing to the mostly non-violent nature of the election, the high turnout and the new and reformed institutions being put into place under the new constitution.
  • The new government will remain committed to pro-market reforms, but ongoing institutional reforms and possible turf wars may lead to some delays.
  • We expect real GDP growth to quicken from an estimated 4.1% in 2012 to 4.8% in 2013, helped by lower interest rates but held back by global fragility. Growth will accelerate in 2014-17, although structural constraints will persist.
  • Inflation is forecast to retreat to 5.6% in 2013, and to move within the 4.8-6% range in 2014-17, helped by prudent monetary policy and more stable prices.
  • Barring a fresh political crisis or the euro zone debt crisis sparking an emerging-market sell-off, we expect the shilling to average KSh87.22:US$1 in 2013 and project a slower rate of decline to KSh105.5:US$1 in 2017.
  • The current-account deficit will edge down from an estimated 9.6% of GDP in 2012 to 8.0% of GDP in 2013. The gap will continue to narrow in 2014-17, helped by steady growth in earnings from exports, tourism and remittances.

  Review

  • Uhuru Kenyatta won the presidential election held on March 4th, securing 50.1% of the vote against 43.3% for Raila Odinga, according to the final results released by the Independent Electoral and Boundaries Commission.
  • Mr Kenyatta crossed the 50% threshold needed to avoid a second-round run-off by a very small margin of just 8,418 votes (out of 12.33m cast), which raises the prospect that a small error could have influenced the outcome.
  • As a result, Mr Odinga is challenging the results in the Supreme Court, which could order a recount or a fresh ballot (or else dismiss the petition). If the challenge fails, Mr Kenyatta will be sworn in as president on March 26th.
  • Mr Kenyatta and his vice-president-elect, William Ruto, continue to face prosecution at the International Criminal Court for facilitating violence after the previous election in 2007.
  • Inflation edged higher to 3.7% in January and 4.5% in February (from a recent low of 3.2% in December 2012) owing to costlier food and transport and an annual increase in school fees in January.

  March 25, 2013

Economy:

• Background

  Kenya: Country fact sheet

  Fact sheet

  Annual data	2012a	Historical averages (%)	2008-12
  Population (m)	42.7	Population growth	2.7
  GDP (US$ bn; market exchange rate)	41.4	Real GDP growth	3.7
  GDP (US$ bn; purchasing power parity)	75.6	Real domestic demand growth	4.8
  GDP per head (US$; market exchange rate)	967	Inflation	12.3
  GDP per head (US$; purchasing power parity)	1,768	Current-account balance (% of GDP)	-9.1
  Exchange rate (av) KSh:US$	84.53b	FDI inflows (% of GDP)	0.6
  a The Economist Intelligence Unit estimates. b Actual.

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  Background: Kenya was a one-party state under the Kenya African National Union (KANU) until 1991, and voters remained loyal to KANU until 2002, when Mwai Kibaki and the National Rainbow Coalition (NARC) won a landslide victory. Mr Kibaki won a second term in December 2007, by a narrow margin over Raila Odinga of the Orange Democratic Movement (ODM). However, allegations of vote-rigging sparked the worst intercommunal violence since independence. Following African-led mediation, the two sides signed a power-sharing deal and formed a grand coalition government, with Mr Kibaki as president and Mr Odinga in the newly created post of prime minister. Following the largely peaceful general election on March 4th 2013, Uhuru Kenyatta, representing the Jubilee coalition, is poised to become Kenya's new president after securing 50.1% of the vote (on a high 86% turnout), against 43.4% for Mr Odinga (representing the Coalition for Reforms and Democracy).

  Political structure: Kenya is a constitutional democracy with a unicameral parliament and an executive president directly elected by voters. The new constitution, promulgated in August 2010 following a referendum, will retain a presidential system but with new checks and balances, including the devolution of some power to the county level and the creation of an upper house of parliament. The new dispensation will come into force in 2013.

  Policy issues: The new government intends to push ahead with economic reforms, including trade liberalisation, privatisation and deregulation, in order to improve the business environment, thereby boosting growth and cutting poverty. Plans for the disposal of full or partial stakes in up to 25 state enterprises, either by selling shares to strategic partners or via flotations on the Nairobi Securities Exchange, will gain fresh momentum when the new government is put in place. In January 2011 Kenya and the IMF agreed a new three-year programme that will focus on fiscal consolidation and structural reforms, although high-level corruption will remain a key policy challenge, following the failure of successive governments to rectify it.

  Taxation: Kenya's rate of corporation tax is 30% for resident companies and 37.5% for non-resident companies, but the overall tax burden rises to about 50% of gross profits with the inclusion of labour and other taxes.

  Foreign trade: Kenya has a relatively diverse export profile, led by tea and horticultural products. Kenya has close trade links with fellow members of the Common Market for Eastern and Southern Africa (Comesa) and-especially-the East African Community (EAC). Kenya's import profile is also diverse, with the Middle East and Asia accounting for around 60%.

  Major exports 2011	% of total	Major imports 2011	% of total
  Tea	19.9	Industrial supplies	33.4
  Horticultural products	16.2	Transport equipment	30.1
  Coffee	3.8	Machinery & other capital equipment	17.1
  Fish & fish preparations	1.0	Food & beverages	8.7
  Leading markets 2011	% of total	Leading suppliers 2011	% of total
  Uganda	9.7	China	14.7
  Tanzania	9.5	India	14.0
  Netherlands	8.3	UAE	10.1
  UK	8.0	South Africa	7.7

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  March 26, 2013

• Structure

  Kenya: Economic structure

  Data and charts: Annual trends charts

  
  

  

  March 25, 2013

• Outlook

  Kenya: Country outlook

  Kenya: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: Prospects for political stability have improved following the largely peaceful general election on March 4th-Kenya's first under the 2010 constitution. Uhuru Kenyatta, representing the Jubilee coalition, is poised to become Kenya's new president after capturing 50.1% of the vote (on a high 86% turnout), compared with 43.3% for Raila Odinga (of the Coalition for Reforms and Democracy; CORD). However, Mr Kenyatta crossed the 50% threshold needed to avoid a second-round run-off by a very small margin. Given the failure of electronic counting and transmission systems, which obliged the Independent Electoral and Boundaries Commission (IEBC) to resort to manual tallying, Mr Odinga's allegations of faults are feasible. He will therefore challenge the results in the Supreme Court, which could order a recount or a fresh ballot. Assuming the result stands, Mr Kenyatta will be sworn in as Kenya's fourth president on March 26th, to serve a five-year term. The outcome of the simultaneous elections held for the National Assembly, the Senate and county governorships has yet to be released in full. Provisional indications suggest that the Jubilee coalition, albeit the largest grouping, failed to win a parliamentary majority and will need to work with other parties.

  ELECTION WATCH: Unless the Supreme Court orders a re-run of the election, which is highly unlikely, Kenya's next ballots will not take place until 2017-18. The new constitution calls for subsequent elections to take place in the month of August, although it is unclear at this stage if this would be in 2017 or 2018. Alternatively, the constitution may be amended to provide for an alternative election month, such as March 2018, five years after the recent ballot. Mr Kenyatta will, in theory, be allowed to run again for a second and final five-year term, barring a development such as an ICC conviction.

  INTERNATIONAL RELATIONS: Foreign policy will be driven by economic interests, especially the maintenance of close relations with key donors and the advancement of regional integration within the regional economic body, the East African Community (EAC). Kenya will retain close ties with the US (including military co-operation) and important developing countries such as China, India and South Africa. However, the pending ICC cases will complicate relations with key Western partners. The civil war in neighbouring Somalia will remain the primary source of security- and terrorism-related risk. Kenya's armed incursion into southern Somalia in October 2011, in pursuit of Islamist rebels fighting under the banner of al-Shabab, has been broadly successful. In alliance with African Union peacekeepers, Kenya seized Kismayo port, al-Shabab's main stronghold, in late 2012. However, al-Shabab will increasingly revert to guerrilla tactics, while the launch of further terrorist attacks on Kenyan soil remains a key risk, exacerbated by the large number of Somalis resident in Kenya. The incursion has bolstered Kenya's standing and improved prospects for regional integration, although al-Shabab has not been eliminated and setbacks remain a possibility.

  POLICY TRENDS: The main policy challenge in the medium term will be to alleviate structural constraints, such as weak infrastructure, which are impeding growth prospects. An ongoing fiscal stimulus and structural reforms such as deregulation and privatisation will promote economic activity, as will the recent relaxation in monetary policy, although the global slowdown will act as a constraint. Moreover, policymaking will remain vulnerable to exogenous shocks, including drought and volatile commodity prices, and to political in-fighting. Kenya's IMF-backed programme, supported by a US$760m extended credit facility, remains on track and will focus on fiscal reform, investment in infrastructure and the implementation of the new constitution. Although continued IMF backing will encourage support from other donors, corruption and weak governance will deter investment and continue to strain relations with external backers. The government aims to accelerate the pace of structural reform in 2013-17, including deregulation and trade liberalisation (especially within the EAC). Plans for the disposal of full or partial stakes in up to 25 state enterprises, either by selling shares to strategic partners or via flotations on the Nairobi Securities Exchange, will gain fresh momentum when the new government takes office.

  ECONOMIC GROWTH: After real GDP growth reached an estimated 4.1% in 2012 (held back by high interest rates in the first half of the year and global fragility), the Economist Intelligence Unit expects it to quicken slightly to 4.8% in 2013, before rising in 2014-17. Growth in 2013 will benefit from interest-rate cuts made during the second half of 2012, which will boost credit allocation to households and firms, and from lower inflation, which will facilitate consumer spending. However, weak global conditions-especially in Europe, a key trade, investment and tourism partner-will act as a constraint. Moreover, drought or election-related instability pose downside risks to the forecast. Growth will gather momentum in 2014-17, helped by a rapid take-up of banking services (including telebanking), a continued boom in telecommunications, the expansion of the middle class, increased regional trade, investment in infrastructure and structural reforms. However, faster growth will exacerbate domestic structural deficiencies, especially in transport and power, despite new investment. Moreover, key reforms could fall victim to political in-fighting, while corruption, high taxes, overregulation and weak governance will continue to inhibit private investment. Nevertheless, growth will strengthen towards the end of the forecast period, rising to 6% in 2017, as reforms and investment start to pay dividends. There is little prospect of Kenya eliminating infrastructural constraints or dependence on rain-fed agriculture during the forecast period, although the rate of expansion will remain relatively brisk, barring global and local shocks.

  INFLATION: After dipping to 3.2% year on year in December 2012 (a 26-month low), inflation rose to 4.5% in February as food and fuel prices climbed. We expect inflation to edge higher during the first half of 2013, owing to currency depreciation (in response to monetary loosening) and upward pressure on food prices. Inflation in the second half will depend partly on the outcome of the main second-quarter rains, which drive food and hydroelectricity prices. We forecast that annual inflation will retreat to 5.6% in 2013 (from 9.4% in 2012), helped by lower commodity prices. Thereafter we expect average annual inflation to be confined within a range of 4.8-6% in 2014-17, despite temporary breaches. Rising aggregate demand and electricity tariffs will underpin higher prices, although prudent monetary policy, more stable global commodity prices and efficiency gains arising from investment in infrastructure and regulatory reform will help to relieve inflationary pressure. The weather (and, therefore, farm and hydroelectricity production) will remain a key variable.

  EXCHANGE RATES: Ongoing IMF support and healthy foreign-exchange reserves will support the Kenya shilling at around KSh85-87:US$1 in the short term. The currency dipped to a 15-month low of KSh87.45:US$1 in February, owing to looser monetary policy and election-related uncertainty, but strengthened again after the election. Barring a fresh political crisis or the euro zone debt crisis sparking a new emerging-market sell-off, we now expect the shilling to be stronger than earlier projected. We have revised our 2013 forecast to KSh87.22:US$1 and project a slower rate of decline to KSh105.5:US$1 in 2017. Depreciation will be underpinned by current-account deficits and relatively high (albeit falling) inflation, and will be more rapid if political or economic confidence slips.

  EXTERNAL SECTOR: The current-account deficit will shrink gradually over the forecast period, from an estimated 9.6% of GDP in 2012 to 8% of GDP in 2013 and 3% of GDP in 2017. Helped by closer regional integration and stronger Asian demand, earnings from key exports, including tea and horticulture (and, later in the forecast period, minerals), will grow steadily, despite a slight slippage in world tea prices in the early part of the forecast period. However, import demand for oil and both capital and consumer goods will be similarly robust, and the merchandise trade deficit will remain broadly stable in absolute terms in 2013-17. The decline in the current-account deficit will be underpinned by growth in invisible earnings, especially from tourism, remittances and servicing regional trade (although receipts from all three sources will be vulnerable to negative global developments). Official donor grants will offer additional support. The income deficit will remain modest in 2014-16, reflecting Kenya's low debt-service outlays. The current-account deficit, despite declining during the forecast period, will leave Kenya dependent on external inflows-either debt or investment-to fill the gap.

  March 28, 2013

• Forecast

  Kenya: Country forecast summary

  Country forecast overview: Highlights

  • Prospects for political stability have improved following the largely peaceful general election on March 4th, Kenya's first under the 2010 constitution. Uhuru Kenyatta, representing the Jubilee coalition, is poised to become Kenya's new president for a five-year term. However, Mr Kenyatta and his vice-president-elect, William Ruto, continue to face prosecution at the International Criminal Court for facilitating violence after the last election in 2007. This could disrupt government functioning because of the need for them to appear in court in The Hague (Netherlands).
  • The new constitution will usher in a new-style executive, legislature and judiciary; it features greater checks on presidential powers and offers the prospect of more accountable politics in the future.
  • In the medium term the new government will focus on more comprehensive and ambitious pro-business reforms to boost growth and employment. Plans for the disposal of full or partial stakes in up to 25 state enterprises, either by selling shares to strategic partners or via flotations on the Nairobi Securities Exchange, will gain fresh momentum when the new government takes office.
  • Kenya's business environment will remain challenging during the forecast period. Kenya's two biggest weaknesses are its political environment (despite the apparent success of the election) and its infrastructure, and these are unlikely to change significantly over the outlook period. Against that, closer integration within the East African Community will boost potential market size and generate new opportunities for Kenyan and foreign investors.
  • Income per head will grow at a steady pace after 2014, underpinned by solid economic growth, structural reform, regional integration and the processes of urbanisation and consumerisation. This will push up household disposable income, creating new business opportunities (in retailing, manufacturing, telecommunications and banking), but poverty and inequality will persist.
  • Growth will accelerate during the forecast period, to an average of 5.4% a year in 2013-17, underpinned by investment in infrastructure and regional integration, although drought remains a perennial risk.
  • After reaching an estimated 9.6% of GDP in 2012, underpinned by costlier oil, the current-account deficit is expected to narrow gradually during the forecast period, helped by growth in earnings from exports, tourism and remittances. The current-account deficit, despite declining during the forecast period, will leave Kenya dependent on external inflows—either debt or investment—to fill the gap.

  

  March 26, 2013

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Country Briefing

Land area

569,259 sq km

Population

38.6m (2010 national census)

Main towns

Population in '000, 2010 census

Nairobi (capital): 3,100

Nakuru: 1,603

Kisumu: 968

Mombasa: 939

Climate

Tropical

Weather in Nairobi (altitude 1,820 metres)

Hottest month, February, 13-28°C; coldest month, July, 11-23°C; driest month, August, 24 mm average rainfall; wettest month, April, 266 mm average rainfall

Languages

English, Kiswahili and more than 40 local ethnic languages

Religion

Christian (80%), Muslim (10%), other (10%)

Measures

Metric system

Currency

Kenya shilling (KSh) = 100 cents

Fiscal year

July 1st-June 30th

Time

3 hours ahead of GMT

Public holidays

January 1st; Good Friday; Easter Monday; May 1st; June 1st; Eid ul-Fitr; Christmas holiday, December 25th-26th

January 01, 2013