Key growth sectors for the Kenyan economy for the year 2014.
Kenya occupies a very crucial position as the commercial and logistical hub in the region of Eastern part of Africa. The Kenyan economy which is the most developed in the region has had an accelerated growth over the years having emerged peacefully from a general election the impact of which has been a major boost in the investors’ confidence. For the year 2013, the economy is projected to expand at a rate of 5.8% going by the favorable prevailing economic environment; stable interest rates, the shilling fairly stable and the manageable level of inflation. This projected expansion in the economy is expected to be driven by the key growth sectors however the projections could well be slowed down by the state of the global economy and drought which could hit hard the agricultural sector, being one of the key growth sectors.
Other than the telecommunications industry, the key growth sectors for the Kenyan economy are as illustrated below
Agriculture has been the major key sector of growth in the Kenya economy taking account of about 25% of the Growth domestic product of Kenya, this sector is expected to remain one of the major key growth sectors in the near future as it forms a major source of foreign exchange earner as well as supplying the local food demand thereby easing inflationary forces. The growth in this sector is expected to be enhanced by the favorable conditions and end result is a ripples effect pulling along with it the other key sectors.
2. Finance and banking.
Kenya population which is estimated at 43 million people has increasing the financial services in the recent past however, a larger percentage of this population is either unbanked or under banked. This has in the recent years witnessed the growth driven by the rise in the middle level income households in the country as well as the rise in the financial services need of the low income households in the microfinance segment which has witnessed a large growth in the number of microfinance institutions which specialize in the servicing the lower bracket of the population. This sector remains attractive as a key growth sector going by the resilience posted in the wake of the global financial crisis in the recent past. And has in the recent attracted several private equity funds such Aureos Africa Fund, AfricInvest Fund, SwedFund International as well LeapFrog investment
This sector is estimated to account for about one tenth of the country’s Gross Domestic Product, has posted rapid expansion over the years. This sector has grown large enough to serve both the local needs and the export demand especially in the region of East Africa which forms the major destination of the country’s exports commodities. This growth has been motivated by improved power supplies, adequate supply of agricultural produce and export promotion. The sector however has not escaped setbacks such as poor state of infrastructure has increased transport costs, rising poverty levels has slowed down the demand for the locally manufactured commodities.
The Kenyan tourism prospects have had a mixed fortune in the wake of the recent terror attacks which has prompted travel advisory from the source markets in the recent times. This sector other than being a source of revenue it is also a source of livelihoods for many Kenyans dealing in such items as curious. Rising competition and the impact of terror threats/attacks have worked negatively for the sector leading to massive layoffs and closures in the hospitality business. The government and business community in this industry have made attempts to counter these challenges by increasing the market activities as well as targeting different source markets for tourists such as the East as well as promoting the domestic tourism market.