Kenya's economy is market-based, with a few state-owned infrastructure enterprises, and maintains a liberalized external trade system. The country is generally perceived as Eastern and central Africa's hub for Financial, Communication and Transportation services. As at May 2010, economic prospects are positive with 4-5% GDP growth expected, largely because of expansions in tourism, telecommunications, transport, construction and a recovery in agriculture. These improvements are supported by a large pool of English speaking professional workers. There is a high level of computer literacy, especially among the youth. The government, generally perceived as investment friendly, has enacted several regulatory reforms to simplify both foreign and local investment. An increasingly significant portion of Kenya's foreign inflows is from remittances by non-resident Kenyans who work in the US, Middle East, Europe, Asia and Antarctica. Compared to its neighbors, Kenya has a well-developed social and physical infrastructure. It is considered the main alternative location to South Africa, for major corporations seeking entry into the African continent.

Economic History[link]

After independence, Kenya promoted rapid economic growth through public investment, encouragement of smallholder agricultural production, and incentives for private (often foreign) industrial investment. Gross domestic product (GDP) grew at an annual average of 6.6% from 1963 to 1973. Agricultural production grew by 4.7% annually during the same period, stimulated by redistributing estates, diffusing new crop strains, and opening new areas to cultivation. Between 1974 and 1990, however, Kenya's economic performance declined. Kenya's inward-looking policy of import substitution and rising oil prices made Kenya's manufacturing sector uncompetitive. The government began a massive intrusion in the private sector. Lack of export incentives, tight import controls, and foreign exchange controls made the domestic environment for investment even less attractive.

From 1991 to 1993, Kenya had its worst economic performance since independence. Growth in GDP stagnated, and agricultural production shrank at an annual rate of 3.9%. Inflation reached a record 100% in August 1993, and the government's budget deficit was over 10% of GDP. As a result of these combined problems, bilateral and multilateral donors suspended program aid to Kenya in 1991.

In 1993, the Government of Kenya began a major program of economic reform and liberalization. A new minister of finance and a new governor of the central bank undertook a series of economic measures with the assistance of the World Bank and the International Monetary Fund (IMF). As part of this program, the government eliminated price controls and import licensing, removed foreign exchange controls, privatized a range of publicly owned companies, reduced the number of civil servants, and introduced conservative fiscal and monetary policies. From 1994 to 1996, Kenya's real GDP growth rate averaged just over 4% a year.

In 1997, however, the economy entered a period of slowing or stagnant growth, due in part to adverse weather conditions and reduced economic activity prior to general elections in December 1997. In July 1997, the Government of Kenya refused to meet commitments made earlier to the IMF on governance reforms.^{[citation needed]}As a result, the IMF suspended lending for three years, and the World Bank also put a $90 million structural adjustment credit on hold.

The Government of Kenya took positive steps on reform, including the 1999 establishment of the Kenyan Anti-Corruption Authority, and measures to improve the transparency of government procurements and reduce the government payroll. In July 2000, the IMF signed a $150 million Poverty Reduction and Growth Facility, and the World Bank followed suit shortly after with a $157 million Economic and Public Sector Reform credit.

This is a chart of trend of gross domestic product of Kenya at market prices estimated by the International Monetary Fund with figures in millions of Kenyan Shillings.

Small scale businesses are providing a more and more jobs in Kenya. With increased but simplified regulations, they are able to blossom into large, legitimate businesses that can eventually create more jobs and government revenue.^[4]

Gross Domestic Product (GDP)[link]

Kenya's economic performance since independence

In 2006 Kenya’s GDP was about US$17.39 billion. Per capita GDP averages somewhat more than US$450 annually. Adjusted in purchasing power parity (PPP) terms, per capita GDP in 2006 was about US$1,200. The country’s real GDP growth picked up to 2.3 percent in early 2004 and to nearly 6 percent in 2005 and 2006, compared with a sluggish 1.4 percent in 2003 and throughout President Daniel arap Moi’s last term (1997–2002). Real GDP is expected to continue to improve, largely because of expansions in tourism, telecommunications, transport, and construction and a recovery in agriculture. The Kenya Central Bank forecast for 2007 is between 5 and 6 percent GDP growth. GDP composition by sector, according to 2004 estimates, was as follows: agriculture, 25.7 percent; manufacturing, 14.0 percent; trade, restaurants, and hotels, 13.8 percent; transport and communications, 6.9 percent; government services, 15.6 percent; and other, 24.0 percent.^[5]

Kenya's 2010 Economic Performance and Outlook for 2011: In 2010, Kenya has seen the return of higher growth projected at 4.9 percent, and may now be at a tipping point for robust growth. Five factors are creating a positive momentum: the new constitution, EAC integration, ICT innovations, strong macroeconomic management, and recent investments in infrastructure. Services, the driver of previous years' growth, have moderated while agriculture and industry are rebounding after two weak years. ICT has been the main driver of Kenya's economic growth over the last decade, growing on average by 20 percent annually, and propelling the combined transport and communications sector into the economy's second largest (after agriculture). Since 2000, Kenya's economy grew at an average of 3.7 percent. Without ICT, growth in 2010 would have been a lackluster 2.8 percent—similar to the population growth rate—and income per capita would have stagnated. Over the last three decades Kenya has experienced only two short episodes when economic growth exceeded five percent and was sustained for at least three consecutive years: 1986-88 and 2004-2007. Economic growth in 2011-12 could range between 5.3 and 6.0 percent if no shocks occur. Public sector investments in infrastructure will help to stimulate this growth. However, the timely implementation of the constitutional reforms would also be necessary to help boost business confidence. (ref; Kenya Economic Update, December 2010, www.worldbank.org/Kenya.keu)

Industries[link]

Agriculture[link]

Cultivation on the slopes of Mount Kenya

The agricultural sector continues to dominate Kenya’s economy, although only 15 percent of Kenya’s total land area has sufficient fertility and rainfall to be farmed, and only 7 or 8 percent can be classified as first-class land. In 2006 almost 75 percent of working Kenyans made their living on the land, compared with 80 percent in 1980. [1] About one-half of total agricultural output is non-marketed subsistence production. Agriculture is the second largest contributor to Kenya’s gross domestic product (GDP), after the service sector. In 2005 agriculture, including forestry and fishing, accounted for about 24 percent of GDP, as well as for 18 percent of wage employment and 50 percent of revenue from exports. The principal cash crops are tea, horticultural produce, and coffee; horticultural produce and tea are the main growth sectors and the two most valuable of all of Kenya’s exports. In 2005 horticulture accounted for 23 percent and tea for 22 percent of total export earnings. Coffee has declined in importance with depressed world prices, accounting for just 5 percent of export receipts in 2005. The production of major food staples such as corn is subject to sharp weather-related fluctuations. Production downturns periodically necessitate food aid—for example, in 2004 aid for 1.8 million people⎯because of one of Kenya’s intermittent droughts. However, the expansion of credit to the agricultural sector has enabled farmers to better deal with the large risk of agriculture based on rainfall and the dramatic fluctuations of the prices of agricultural products.^[5]

Tea, coffee, sisal, pyrethrum, corn, and wheat are grown in the fertile highlands, one of the most successful agricultural production regions in Africa. Livestock predominates in the semi-arid savanna to the north and east. Coconuts, pineapples, cashew nuts, cotton, sugarcane, sisal, and corn are grown in the lower-lying areas.^[5]

Kenya's Agriculture Performance in 2010: The agriculture sector has been rebounding in 2010 and is expected to grow by 5 percent. This is an important development after two consecutive years of decline, when the sector contracted by a combined 6.7 percent. Favourable weather conditions and specific policy interventions under the government's economic stimulus program helped turn the sector around. The performance of Kenya's main agriculture exports in 2010 was strongest for tea which recovered rapidly from 2009 weather conditions. A combination of volume and price increases will see the sector perform even better than in 2008, which had previously been the best year for the sector. Although coffee is benefitting from an increase in global prices, output contracted as coffee production was slow to recover from the prolonged drought in early 2009. Horticulture exports contracted for the third consecutive year. The sector continued to be affected by a muted recovery in Europe, especially the fruits and vegetables. In addition, the volcanic ash crisis in April 2010 disrupted access to the key source markers in Europe. (source: Kenya Economic Update, December 2010, www.worldbank.org/Kenya/keu)

Forestry and fishing[link]

Resource degradation has reduced output from forestry. In 2004 roundwood removals came to 22,162,000 cubic meters. Fisheries are of local importance around Lake Victoria and have potential on Lake Turkana. Kenya’s total catch reported in 2004 was 128,000 metric tons. However, output from fishing has been declining because of ecological disruption. Pollution, overfishing, and the use of unauthorized fishing equipment have led to falling catches and have endangered local fish species.^[5]

Mining and minerals[link]

Kenya has no significant mineral endowment. The mining and quarrying sector makes a negligible contribution to the economy, accounting for less than 1 percent of gross domestic product, the majority contributed by the soda ash operation at Lake Magadi in south-central Kenya. Thanks largely to rising soda ash output, Kenya’s mineral production in 2005 reached more than 1 million tons. One of Kenya’s largest foreign-investment projects in recent years is the planned expansion of Magadi Soda. Apart from soda ash, the chief minerals produced are limestone, gold, salt, and fluorspar.^[5]

All unextracted minerals are government property, according to the Mining Act. The Department of Mines and Geology, under the Ministry of Environment and Natural Resources, controls exploration and exploitation of such minerals.^[5]

Industry and manufacturing[link]

Although Kenya is the most industrially developed country in East Africa, manufacturing still accounts for only 14 percent of gross domestic product (GDP). This level of manufacturing GDP represents only a slight increase since independence. Expansion of the sector after independence, initially rapid, has stagnated since the 1980s, hampered by shortages in hydroelectric power, high energy costs, dilapidated transport infrastructure, and the dumping of cheap imports. However, due to urbanization, the industry and manufacturing sectors have become increasingly important to the Kenyan economy, and has been reflected by an increasing GDP per capita. Industrial activity, concentrated around the three largest urban centers, Nairobi, Mombasa, and Kisumu, is dominated by food-processing industries such as grain milling, beer production, and sugarcane crushing, and the fabrication of consumer goods, e.g., vehicles from kits. Kenya also has an oil refinery that processes imported crude petroleum into petroleum products, mainly for the domestic market. In addition, a substantial and expanding informal sector engages in small-scale manufacturing of household goods, motor-vehicle parts, and farm implements. About half of the investment in the industrial sector is foreign, with the United Kingdom providing half. The United States is the second largest investor.^[5]

Kenya’s inclusion among the beneficiaries of the U.S. Government’s African Growth and Opportunity Act (AGOA) has given a boost to manufacturing in recent years. Since AGOA took effect in 2000, Kenya’s clothing sales to the United States increased from US$44 million to US$270 million (2006). Other initiatives to strengthen manufacturing have been the new government’s favorable tax measures, including the removal of duty on capital equipment and other raw materials.^[5]

Energy[link]

The largest share of Kenya’s electricity supply comes from hydroelectric stations at dams along the upper Tana River, as well as the Turkwel Gorge Dam in the west. A petroleum-fired plant on the coast, geothermal facilities at Olkaria (near Nairobi), and electricity imported from Uganda make up the rest of the supply. Kenya’s installed capacity stood at 1,142 megawatts a year between 2001 and 2003. The state-owned Kenya Electricity Generating Company (KenGen), established in 1997 under the name of Kenya Power Company, handles the generation of electricity, while the Kenya Power and Lighting Company (KPLC), which is slated for privatization, handles transmission and distribution. Shortfalls of electricity occur periodically, when drought reduces water flow. In 1997 and 2000, for example, drought prompted severe power rationing, with economically damaging 12-hour blackouts. Frequent outages, as well as high cost, remain serious obstacles to economic activity. Tax and other concessions are planned to encourage investment in hydroelectricity and in geothermal energy, in which Kenya is a pioneer. The government plans to open two new power stations in 2008, Sondu Miriu (hydroelectric) and Olkaria IV (geothermal), but power demand growth is strong, and demand is still expected to outpace supply during periods of drought.^[5]

Kenya has recently found some hydrocarbon reserves on its semi arid northern region of Turkana after several decades of intermittent exploration. Prospecting also continues off Kenya’s shore. In the meantime, Kenya currently imports all crude petroleum requirements. Petroleum accounts for 20 to 25 percent of the national import bill. Kenya Petroleum Refineries—a 50:50 joint venture between the government and several oil majors—operates the country’s sole oil refinery in Mombasa, which currently meets 60 percent of local demand for petroleum products. In 2004 oil consumption was estimated at 55,000 barrels (8,700 m³) a day. Most of the Mombasa refinery’s production is transported via Kenya’s Mombasa–Nairobi pipeline.^[5]

Tourism[link]

Tourists on a safari in Kenya

Kenya’s services sector, which contributes about 63 percent of GDP, is dominated by tourism. The tourism sector has exhibited steady growth in most years since independence and by the late 1980s had become the country’s principal source of foreign exchange. In the late 1990s, tourism relinquished this position to tea exports, because of a terrorism-related downturn. The downturn followed the 1998 bombing of the U.S Embassy in Nairobi and later negative travel advisories from Western governments. Tourists, the largest number from Germany and the United Kingdom, are attracted mainly to the coastal beaches and the game reserves, notably, the expansive Tsavo National Park (20,808 square kilometers) in the southeast. The government and tourist industry organizations have taken steps to address the security problem and to reverse negative publicity. Such steps include establishing a tourist police and launching marketing campaigns in key tourist origin markets. Tourism has seen a substantial revival over the past several years and is the major contributor to the pick-up in the country’s economic growth.^[5]

Tourism is now Kenya's largest foreign exchange earning sector, followed by flowers, tea, and coffee. In 2006 tourism generated US$803 million, up from US$699 million the previous year.^[5]

Financial Services[link]

Kenya is East and Central Africa's hub for Financial services. The Nairobi Stock Exchange (NSE) is ranked 4th in Africa in terms of Market capitalization.

The Kenya banking system is supervised by the Central Bank of Kenya (CBK). As of late July 2004, the system consisted of 43 commercial banks (down from 48 in 2001), several non-bank financial institutions, including mortgage companies, four savings and loan associations, and several score foreign-exchange bureaus. Two of the four largest banks, the Kenya Commercial Bank (KCB) and the National Bank of Kenya (NBK), are partially government-owned, and the other two are majority foreign-owned (Barclays Bank and Standard Chartered). Most of the many smaller banks are family-owned and -operated.^[5]

Labor[link]

In 2006 Kenya’s labor force was estimated to include about 12 million workers, almost 75 percent in agriculture. The number employed outside small-scale agriculture and pastoralism was about 6 million. In 2004 about 15 percent of the labor force was officially classified as unemployed. Other estimates place Kenya’s unemployment much higher, even up to 40 percent. In recent years, Kenya's labor force has shifted from the countryside to the cities, such as Nairobi, as Kenya becomes increasingly urbanized.^[5]

Currency, exchange rate, and inflation[link]

The exchange rate of the Kenya shilling between 2003 and 2010 has averaged at about KSh74-78 to US$1.

As at April 2010 Kenya's inflation rate is 3.65%.

Government budget[link]

In 2006 Kenya’s revenues totaled US$4.448 billion, while its estimated expenditures totaled US$5.377 billion. Government budget balance as a percentage of gross domestic product⎯a low –5.5 percent in 2004⎯had improved to –2.1 percent in 2006.^[5]

Foreign economic relations[link]

Since independence, Kenya, a nonaligned country, has seen both substantial foreign investment and significant amounts of development aid, some from Russia, some from China and others from the high developed countries. Between 60 and 70 percent of industry is still owned from abroad.^{[citation needed]} Kenya's development assistance has come from increasingly diverse sources in recent years with China taking an increasingly higher prominent role than the west. The share of funding provided by the United Kingdom has fallen significantly, while that of multilateral agencies, particularly the World Bank and the European Development Fund, has increased. The most active investors currently are the Chinese.

Kenya is active within regional trade blocs such as the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC), a partnership of Kenya, Uganda, and Tanzania. The aim of the EAC is to create a common market of the three states modeled on the European Union.^[5] Among the early steps toward integration is the customs union which has eliminated duties on goods and non-tariff trade barriers among the members.

Kenyan exports in 2006

Kenya’s chief exports are horticultural products and tea. In 2005 the combined value of these commodities was US$1,150 million, about 10 times the value of Kenya’s third most valuable export, coffee. Kenya’s other significant exports are petroleum products, sold to near neighbors, fish, cement, pyrethrum, and sisal. The leading imports are crude petroleum, chemicals, manufactured goods, machinery, and transportation equipment. Africa is Kenya's largest export market, followed by the European Union. The major destinations for exports are the United Kingdom (UK), Tanzania, Uganda, and the Netherlands. Major suppliers are the UK, United Arab Emirates, Japan, and India. Kenya’s main exports to the United States are garments traded under the terms of the African Growth and Opportunity Act (AGOA). Despite AGOA, Kenya’s apparel industry is struggling to hold its ground against Asian competition and runs a trade deficit with the United States. Many of Kenya's problems relating to the export of goods are believed by most economists to be caused by Kenya's export of inexpensive goods that saturate the global market but do little to substantially raise the amount of money coming into the country.^[5]

Graphical depiction of Kenya's product exports in 28 color coded categories.

Kenya typically has a substantial trade deficit. The trade balance fluctuates widely because Kenya’s main exports are primary commodities subject to the effects of both world prices and weather. In 2005 Kenya’s income from exports was about US$3.2 billion. The payment for imports was about US$5.7 billion, yielding a trade deficit of about US$2.5 billion.^[5]

In 2006 Kenya had a current account deficit of US$1.5 billion. This figure was a significant increase over 2005, when the current account had a deficit of US$495 million. In 2006 the current account balance as a percentage of gross domestic product was –4.2.^[5]

In 2006 Kenya’s external debt totaled US$6.7 billion. The debt is forecast to be a manageable 30 percent of gross domestic product in 2007.^[5]

Kenyan policies on foreign investment generally have been favorable since independence, with occasional tightening of restrictions to promote the Africanization of enterprises. Foreign investors have been guaranteed ownership and the right to remit dividends, royalties, and capital. In the 1970s, the government disallowed foreign investment unless there was also some government participation in the ownership of an enterprise. Notwithstanding some restrictions, between 60 and 70 percent of industry is still owned from abroad, a significant portion of which can be traced to fraudulent asset transfers by the colonial Britain during transition to independence. This denied Kenyans the opportunity to progress economically - relegating most of them to poverty and creating conditions that would lead to dependency on foreign aid. However, Kenyan has had more economic success and more success raising its own quality of life than some of its neighbors in Sub-Saharan Africa.^[5]

Criticism and Challenges[link]

The economy’s heavy dependence on rain-fed agriculture and the tourism sector leaves it vulnerable to cycles of boom and bust. The agricultural sector employs nearly 75 percent of the country’s 38 million people. Half of the sector’s output remains subsistence production.^[5]

Kenya’s economic performance has been hampered by numerous interacting factors: heavy dependence on a few agricultural exports that are vulnerable to world price fluctuations, population growth that has outstripped economic growth, prolonged drought that has necessitated power rationing, deteriorating infrastructure, and extreme disparities of wealth that have limited the opportunities of most to develop their skills and knowledge. Poor governance and corruption also have had a negative impact on growth, making it expensive to do business in Kenya. According to Transparency International, Kenya ranks among the world’s half-dozen most corrupt countries. Bribery and fraud cost Kenya as much as US$1 billion a year. Kenyans, 23 percent living on less than US$1 per day, pay some 16 bribes a month—two in every three encounters with public officials. Another large drag on Kenya’s economy is the burden of human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS).^[5] Prospects significantly improved under the Kibaki government, whose policy aims include budgetary reforms and debt restraint.

Despite early disillusionment of western donors with the government, the economy has seen a broad-based expansion, led by strong performance in tourism and telecommunications, and acceptable post-drought results in agriculture, especially the vital tea sector.^[5] Kenya's economy grew by more than 7% in 2007 and its foreign debt was greatly reduced.^[5] Western donors are now adopting a less paternalistic attitude towards their relations with African nations. However there is still significant improvement to be done. 2007-2008 post election violence also impacted a lot to kenyan economy, these prove for the down swing of kenya business cycle within the period.

See also[link]

• Economy of Africa
• Category: Companies of Kenya & Companies of Kenya
• Eco-Pesa

References[link]

 This article incorporates public domain material from websites or documents of the CIA World Factbook.

Further reading[link]

• Kitching, Gavin (1980). Class and Economic Change in Kenya. Yale University Press. ISBN 0-300-02385-5. 

External links[link]

Wikimedia Commons has media related to: Economy of Kenya

• CBIK - the Center for Business Information in Kenya, a division of the Kenya Export Promotion Council
• KenInvest; the Kenya Investment Authority, formed by the government of Kenya in 2004
• Kenya Economic Development at the Open Directory Project
• Kenya latest trade data on ITC Trade Map

Republic of Kenya Jamhuri ya Kenya
Flag Coat of arms
Motto: "Harambee"  (Swahili) "Let us all pull together"
Anthem: Ee Mungu Nguvu Yetu "O God of All Creation"
Capital (and largest city)		Nairobi 1°16′S 36°48′E / 1.267°S 36.8°E / -1.267; 36.8
Official language(s)		Swahili English[1]
Ethnic groups		Kikuyu 22% Luhya 14% Luo 13% Kalenjin 12% Kamba 11% Kisii 6% Meru 6% other African 15% non-African (Asian European, and Arab) 1%
Demonym		Kenyan
Government		Semi-presidential Republic
-	President	Mwai Kibaki
-	Vice President	Kalonzo Musyoka
-	Prime Minister	Raila Odinga
-	National Assembly Speaker	Kenneth Marende
Legislature		National Assembly
Independence
-	from the United Kingdom	12 December 1963
-	Republic declared	12 December 1964
Area
-	Total	580,367 km2 (47th) 224,080 sq mi
-	Water (%)	2.3
Population
-	2012 estimate	43,013,341[2] (31st)
-	2009 census	38,610,097[3]
-	Density	67.2/km2 (140th) 174.1/sq mi
GDP (PPP)		2011 estimate
-	Total	$71.427 billion[4]
-	Per capita	$1,746[4]
GDP (nominal)		2011 estimate
-	Total	$34.796 billion[4]
-	Per capita	$850[4]
Gini (2008)		42.5 (medium) (48th)
HDI (2011)		0.509[5] (low) (143rd)
Currency		Kenyan shilling (KES)
Time zone		EAT (UTC+3)
-	Summer (DST)	not observed (UTC+3)
Date formats		dd/mm/yy(AD)
Drives on the		left
ISO 3166 code		KE
Internet TLD		.ke
Calling code		+254
1. According to cia.gov, estimates for this country explicitly take into account the effects of mortality due to AIDS; this can result in lower life expectancy, higher infant mortality and death rates, lower population and growth rates, and changes in the distribution of population by age and sex, than would otherwise be expected.[2]

Kenya ( /ˈkɛnjə/ or /ˈkiːnjə/), officially the Republic of Kenya, is a country in East Africa that lies on the equator. With the Indian Ocean to its south-east, it is bordered by Tanzania to the south, Uganda to the west, South Sudan to the north-west, Ethiopia to the north and Somalia to the north-east. Kenya has a land area of 580,000 km² and a population of nearly 41 million,^[6] representing 42 different peoples and cultures.^[7] The country is named after Mount Kenya, a significant landmark and second among Africa's highest mountain peaks. Kenya's capital and largest city is Nairobi.

Kenya has a warm and humid climate along its coastline on the Indian Ocean which changes to wildlife-rich savannah grasslands moving inland towards the capital Nairobi. Nairobi has a cool climate that gets colder approaching Mount Kenya, which has three permanently snow-capped peaks. The warm and humid tropical climate reappears further inland towards lake Victoria, before giving way to temperate forested and hilly areas in the western region. The North Eastern regions along the border with Somalia and Ethiopia are arid and semi-arid areas with near-desert landscapes. Lake Victoria, the world's second largest fresh-water lake (after Lake Superior in the US and Canada) and the world's largest tropical lake, is situated to the southwest and is shared with Uganda and Tanzania. Kenya is famous for its safaris and diverse world-famous wildlife reserves such as Tsavo National Park, the Maasai Mara, Nakuru National Park, and Aberdares National Park.

As part of East Africa, Kenya has seen human habitation since the Lower Paleolithic period. The Bantu expansion reached the area by the first millennium AD, and the borders of the modern state comprise the crossroads of the Niger–Congo, Nilo-Saharan, and Afro-Asiatic linguistic areas of Africa, making Kenya a truly multi-cultural state. European and Arab presence in Mombasa dates to the Early Modern period, but European exploration of the interior began only in the 19th century. The British Empire established the East Africa Protectorate in 1895, known from 1920 as the Kenya Colony. The independent Republic of Kenya was founded in December 1963. Following a referendum in August 2010 and adoption of a new constitution that is to replace the old one that was inherited from the British at independence, Kenya is now divided into 47 counties that are semi-autonomous units of governance. These units are expected to be fully implemented by August 2012 – in time for the first general election under the new constitution. The counties will be governed by elected governors and will operate independent of the central government in Nairobi.

The capital, Nairobi, is a regional commercial hub. The economy of Kenya is the largest by GDP in East and Central Africa.^[8][9] Agriculture is a major employer and the country traditionally exports tea and coffee, and more recently fresh flowers to Europe. The service industry is a major economic driver, mostly the telecommunications sector, and contributes 62 percent of GDP. Kenya is a member of the East African Community.

Etymology[link]

The word Kenya', /ˈkɛnjə/, originates from the Kikuyu, Embu and Kamba names for Mount Kenya, "Kirinyaga", "Kirinyaa" and "Kiinyaa".^{[citation needed]} Prehistoric volcanic eruptions of Mount Kenya (now extinct) may have resulted in its association with divinity and creation among the indigenous Kikuyu-related ethnic groups who are the native inhabitants of the agricultural land surrounding Mount. Kenya.^{[original research?]}

The Wakamba first pointed out the second mountain to Dr. Krapf called "Kĩ-Nyaa" or "Kĩĩma- Kĩĩyaa" which is similar to Kĩrĩma Kĩrĩnyaga in Kikuyu... probably because the pattern of black rock and white snow on its peaks reminded them of the feathers of the cock ostrich.^[10]

The word "Nyaga" is a Kikuyu – Embu word to mean spot. It is a diminutive for "Manyaganyaga", Spots. The spots of the black rock and the white snow could be the origin of the words "Kĩrĩ-nyaga" which in this case means 'spotted'. Therefore, Mwene- Nyaga (Agikuyu God) means "The owner/guardian of the spotted Mountain".

In the 19th century, the German explorer Ludwig Krapf recorded the name as both Kenia and Kegnia believed by some to be a corruption of the Kamba version.^[11][12][13] Others say that this was—on the contrary—a very precise notation of a correct African pronunciation /ˈkɛnjə/.^[14] A map drawn by Joseph Thompsons, 1882 a Scottish geologist and Naturalist indicated Mt. Kenya as Mt. Kenia, 18620.^[10]

Geography and climate[link]

Mount Kenya is the highest peak in Kenya at 5,199 m (17,057 ft).^[15] Kenya is named after the mountain.^[16]

At 580,367 km² (224,081 sq mi),^[2] Kenya is the world's forty-seventh largest country (after Madagascar). It lies between latitudes 5°N and 5°S, and longitudes 34° and 42°E. From the coast on the Indian Ocean, the low plains rise to central highlands. The highlands are bisected by the Great Rift Valley; a fertile plateau lies in the east. The Kenyan Highlands comprise one of the most successful agricultural production regions in Africa. The highlands are the site of the highest point in Kenya (and the second highest in Africa): Mount Kenya, which reaches 5,199 m (17,057 ft) and is the site of glaciers. Mount Kilimanjaro (5,895 m/19,341 ft) can be seen from Kenya to the South of the Tanzanian border.^[15]

Kenya's climate varies from tropical along the coast to temperate inland to arid in the north and northeast parts of the country. Kenya receives a great deal of sunshine all the year round, and summer clothes are worn throughout the year. It is usually cool at night and early in the morning inland at higher elevations. The "long rains" season occurs from March/April to May/June. The "short rains" season occurs from October to November/December. The rainfall is sometimes heavy and often falls in the afternoons and evenings. The temperature remains high throughout these months of tropical rain. The hottest period is February and March, leading into the season of the long rains, and the coldest is in July and August.

A giraffe at Nairobi National Park, with Nairobi's skyline in background

Kenya has considerable land area devoted to wildlife habitats, including the Masai Mara, where Blue Wildebeest and other bovids participate in a large scale annual migration. Up to 250,000^{[citation needed]} blue wildebeest perish each year in the long and arduous movement to find forage in the dry season.^{[citation needed]} The "Big Five" animals of Africa can be found in Kenya and in the Masai Mara in particular: the lion, leopard, buffalo, rhinoceros and elephant. A significant population of other wild animals, reptiles and birds can be found in the national parks and game reserves in the country. The annual animal migration – especially migration of the wildebeest – occurs between June and September with millions of animals taking part.

Kenya is the setting for one of the Natural Wonders of the World – the great wildebeest migration. 11.5 million of these ungulates migrate a distance of 1,800 miles from the Serengeti in neighbouring Tanzania to the Masai Mara in Kenya, in a constant clockwise fashion, searching for food and water supplies.

History[link]

Prehistory[link]

The African theropod Spinosaurus was the largest known carnivorous dinosaur.

Giant crocodile fossils have been discovered in Kenya, dating from the Mesozoic Era, over 200 million years ago. The fossils were found in an excavation conducted by a team from the University of Utah and the National Museums of Kenya in July–August 2004 at Lokitaung Gorge, near Lake Turkana.^[17]

Fossils found in East Africa suggest that primates roamed the area more than 20 million years ago. Recent finds near Kenya's Lake Turkana indicate that hominids such as Homo habilis (1.8 and 2.5 million years ago) and Homo erectus (1.8 million to 350 000 years ago) are possible direct ancestors of modern Homo sapiens and lived in Kenya during the Pleistocene epoch. In 1984 one particular discovery made at Lake Turkana by famous palaeoanthropologist Richard Leakey and Kamoya Kimeu was the skeleton of a Turkana boy belonging to Homo erectus from 1.6 million years ago. Previous research on early hominids is particularly identified with Mary Leakey and Louis Leakey, who were responsible for the preliminary archaeological research at Olorgesailie and Hyrax Hill. Later work at the former was undertaken by Glynn Isaac.^{[citation needed]}

Kenya has been inhabited by people for as long as human history has existed.

Pre-colonial history[link]

The first inhabitants of present-day Kenya were hunter-gatherer groups, akin to the modern Khoisan speakers.^[18] These people were later replaced by agropastoralist Cushitic speakers from the Horn of Africa.^[19] During the early Holocene the regional climate shifted from dry to wetter climatic conditions, providing an opportunity for the development of cultural traditions, such as agriculture and herding, in a more favorable environment.^[18]

Around 500 BC Nilotic speaking pastoralists (ancestral to Kenya's Nilotic speakers) started migrating from present-day Southern Sudan into Kenya.^[20][21][22] Nilotic groups in Kenya include the Samburu, Luo, Turkana, Maasai.^[23]

By the first millennium AD, Bantu speaking farmers moved into the region.^[24] The Bantus originated in West Africa along the Benue River in what is now eastern Nigeria and western Cameroon.^[25] The Bantu migration brought new developments in agriculture and iron working to the region.^[25] Bantu groups in Kenya include the Kikuyu, Luhya, Kamba, Kisii, Meru, Aembu, Ambeere and Mijikenda among others.

Remarkable prehistoric sites in the interior of Kenya include the archaeoastronomical site Namoratunga on the west side of Lake Turkana and the walled settlement of ThimLich Ohinga in Nyanza Province.

Arab traders began frequenting the Kenya coast around the 1st century AD. Kenya's proximity to the Arabian Peninsula invited colonization, and Arab and Persian settlements sprouted along the coast by the 8th century.

The Kenyan coast had served host to communities of ironworkers and communities of subsistence farmers, hunters and fishers who supported the economy with agriculture, fishing, metal production and trade with foreign countries.^[26]

The Great Mosque of Kilwa Kisiwani, one of the many mosques built by the Persian founders of the Kilwa Sultanate.^[27]

The Kilwa Sultanate was a medieval sultanate, centered at Kilwa in modern-day Tanzania. At its height, its authority stretched over the entire length of the Swahili Coast, including Kenya. It was founded in the 10th century by Ali ibn al-Hassan Shirazi,^[28] a Persian Prince of Shiraz.^[29] The Persian rulers would go on to build elaborate coral mosques and introduced copper coinage.^[27]

During this period, Arabs from southern Arabia settled on the coast. They established many new autonomous city-states, including Mombasa, Malindi and Zanzibar. The Arab migrants also introduced Islam and the Omani dialect of Arabic to the area. This blending of cultures left a notable Arabian influence on the local Bantu Swahili culture and language of the coast.^[30] The Arabs built Mombasa into a major port city and established trade links with other nearby city-states, as well as commercial centers in Persia, Arabia, and even India.^[31] By the 15th-century, Portuguese voyager Duarte Barbosa claimed that "Mombasa is a place of great traffic and has a good harbour in which there are always moored small craft of many kinds and also great ships, both of which are bound from Sofala and others which come from Cambay and Melinde and others which sail to the island of Zanzibar."^[32]

In the centuries preceding colonization, the Swahili coast of Kenya was part of the east African region which traded with the Arab world and India especially for ivory and slaves (the Ameru tribe is said to have originated from slaves escaping from Arab lands sometime around the year 1700). Initially these traders came mainly from Arab states, but later many came from Zanzibar (such as Tippu Tip).^[33] Close to 90% of the population on the Kenya coast was enslaved.^[34]

Swahili, a Bantu language with Arabic, Persian, and other Middle Eastern and South Asian loanwords, later developed as a lingua franca for trade between the different peoples.^[26]

Throughout the centuries the Kenyan Coast has played host to many merchants and explorers. Among the cities that line the Kenyan coast is the City of Malindi. It has remained an important Swahili settlement since the 14th century and once rivaled Mombasa for dominance in this part of East Africa. Malindi has traditionally been a friendly port city for foreign powers. In 1414, the Arab Sultan of Malindi initiated diplomatic relations with Ming Dynasty China during the voyages of the explorer Zheng He.^[35] Malindi authorities welcomed Portuguese explorer, Vasco da Gama, in 1498.

Colonial history[link]

Britain's possessions in British East Africa during the colonial period.

The colonial history of Kenya dates from the establishment of a German protectorate over the Sultan of Zanzibar's coastal possessions in 1885, followed by the arrival of the Imperial British East Africa Company in 1888. Incipient imperial rivalry was forestalled when Germany handed its coastal holdings to Britain in 1890. This was followed by the building of the Kenya–Uganda railway passing through the country. This was resisted by some tribes — notably the Nandi led by Orkoiyot Koitalel Arap Samoei for ten years from 1895 to 1905 — still the British eventually built the railway. The Nandi were the first tribe to be put in a native reserve to stop them from disrupting the building of the railway. During the railway construction era, there was a significant inflow of Indian peoples, who provided the bulk of the skilled manpower required for construction.^[36]

While building the railroad through Tsavo, a number of the Indian railway workers and local African labourers were attacked by two lions known as the Tsavo maneaters. They and most of their descendants later remained in Kenya and formed the core of several distinct Indian communities such as the Ismaili Muslim and Sikh communities.^[37][38]

Statue of Dedan Kimathi, a Kenyan rebel leader with the Mau Mau who fought against British colonization in the 1950s.

At the outbreak of World War I in August 1914, the governors of British East Africa (as the Protectorate was generally known) and German East Africa agreed a truce in an attempt to keep the young colonies out of direct hostilities. Lt Col Paul von Lettow-Vorbeck took command of the German military forces, determined to tie down as many British resources as possible. Completely cut off from Germany, von Lettow conducted an effective guerilla warfare campaign, living off the land, capturing British supplies, and remaining undefeated. He eventually surrendered in Zambia eleven days after the Armistice was signed in 1918. To chase von Lettow the British deployed the British Indian Army troops from India and then needed large numbers of porters to overcome the formidable logistics of transporting supplies far into the interior on foot. The Carrier Corps was formed and ultimately mobilised over 400,000 Africans, contributing to their long-term politicisation.^[36]

During the early part of the 20th century, the interior central highlands were settled by British and other European farmers, who became wealthy farming coffee and tea.^[39] (One depiction of this period of change from one colonist's perspective is found in the memoir "Out of Africa" by Danish author Baroness Karen von Blixen-Finecke, published in 1937.) By the 1930s, approximately 30,000 white settlers lived in the area and gained a political voice because of their contribution to the market economy. The area was already home to over a million members of the Kikuyu people, most of whom had no land claims in European terms, and lived as itinerant farmers. To protect their interests, the settlers banned the growing of coffee, introduced a hut tax, and the landless were granted less and less land in exchange for their labour. A massive exodus to the cities ensued as their ability to provide a living from the land dwindled.^[36] By the 1950s, the white population numbered 80,000.^[40]

In 1952, Queen Elizabeth II and her husband Prince Phillip were on holiday at the Treetops Hotel in Kenya when her father, King George VI, passed away in his sleep. The young princess cut-short her trip and returned home immediately to take her throne. Queen Elizabeth II was crowned at the Westminister Abbey in 1953 and, as one gentleman put it, she went up a tree in Africa a princess, and came down a queen.^[41]

Kenya–Uganda railway near Mombasa, about 1899

From October 1952 to December 1959, Kenya was under a state of emergency arising from the Mau Mau rebellion against British rule. The governor requested and obtained British and African troops, including the King's African Rifles. The British began counter-insurgency operations; in May 1953 General Sir George Erskine took charge as commander-in-chief of the colony's armed forces, with the personal backing of Winston Churchill.^[42]

The capture of Warũhiũ Itote (aka General China) on 15 January 1954, and the subsequent interrogation led to a better understanding of the Mau Mau command structure. Operation Anvil opened on 24 April 1954, after weeks of planning by the army with the approval of the War Council. The operation effectively placed Nairobi under military siege, and the occupants were screened and the Mau Mau supporters moved to detention camps. The Home Guard formed the core of the government's strategy as it was composed of loyalist Africans, not foreign forces like the British Army and King's African Rifles. By the end of the emergency, the Home Guard had killed 4686 Mau Mau, amounting to 42% of the total insurgents. The capture of Dedan Kimathi on 21 October 1956, in Nyeri signified the ultimate defeat of the Mau Mau and essentially ended the military offensive.^[42] During this period, substantial governmental changes to land tenure occurred, the most important of which was the Swynnerton Plan, which was used to both reward loyalists and punish Mau Mau.

Post-colonial history[link]

The first direct elections for Africans to the Legislative Council took place in 1957. Despite British hopes of handing power to "moderate" African rivals, it was the Kenya African National Union (KANU) of Jomo Kenyatta that formed a government shortly before Kenya became independent on 12 December 1963, on the same day forming the first Constitution of Kenya.^[43] During the same year, the Kenyan army fought the Shifta War against ethnic Somalis who wanted Kenya's Northern Frontier District joined with the Republic of Somalia. The Shifta War officially ended with the signature of the Arusha Memorandum in October, 1967, but relative insecurity prevailed through 1969.^[44][45] To discourage further invasions, Kenya signed a defence pact with Ethiopia in 1969, which is still in effect.^[46]

The former Kenyan President and founder of Kenya, Jomo Kenyatta.

On 12 December 1964 the Republic of Kenya was proclaimed, and Jomo Kenyatta became Kenya's first president.^[47] At Kenyatta's death in 1978, Daniel arap Moi became President. Daniel arap Moi retained the Presidency, being unopposed in elections held in 1979, 1983 (snap elections) and 1988, all of which were held under the single party constitution. The 1983 elections were held a year early, and were a direct result of an abortive military coup attempt on 2 August 1982.

The abortive coup was masterminded by a low ranked Air Force serviceman, Senior Private Hezekiah Ochuka and was staged mainly by enlisted men in the Air Force. The attempt was quickly suppressed by Loyalist forces led by the Army, the General Service Unit (GSU) — a paramilitary wing of the police — and later the regular police, but not without civilian casualties. This event led to the disbanding of the entire Air Force and a large number of its former members were either dismissed or court-martialled.

The election held in 1988 saw the advent of the mlolongo (queuing) system, where voters were supposed to line up behind their favoured candidates instead of a secret ballot.^[48] This was seen as the climax of a very undemocratic regime and it led to widespread agitation for constitutional reform. Several contentious clauses, including one that allowed for only one political party were changed in the following years.^[49] In democratic, multiparty elections in 1992 and 1997, Daniel arap Moi won re-election. In 2002, Moi was constitutionally barred from running, and Mwai Kǐbakǐ, running for the opposition coalition "National Rainbow Coalition" — NARC, was elected President. Anderson (2003) reports the elections were judged free and fair by local and international observers, and seemed to mark a turning point in Kenya's democratic evolution.^[50]

Politics[link]

Current president Mwai Kibaki

Kenya is a presidential representative democratic republic, whereby the President is both the head of state and head of government, and of a multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly. The Judiciary is independent of the executive and the legislature. There was growing concern especially during former president Daniel arap Moi's tenure that the executive was increasingly meddling with the affairs of the judiciary.^{[citation needed]}

Kenya has maintained remarkable stability despite changes in its political system and crises in neighbouring countries. A cross-party parliamentary reform initiative in the autumn of 1997 revised some oppressive laws inherited from the colonial era that had been used to limit freedom of speech and assembly. This improved public freedoms and contributed to generally credible national elections in December 1997.^{[citation needed]}

In December 2002, Kenyans held democratic and open elections, most of which were judged free and fair by international observers. The 2002 elections marked an important turning point in Kenya's democratic evolution in that power was transferred peacefully from the Kenya African Union (KANU), which had ruled the country since independence to the National Rainbow Coalition (Narc), a coalition of political parties.

Under the presidency of Mwai Kibaki, the new ruling coalition promised to focus its efforts on generating economic growth, combating corruption, improving education, and rewriting its constitution. A few of these promises have been met. There is free primary education. In 2007 the government issued a statement declaring that from 2008, secondary education would be heavily subsidised, with the government footing all tuition fees.^{[citation needed]}

2007 elections[link]

Post-election violence in Nairobi

The latest general elections were held on 27 December 2007. In them, President Kibaki under the Party of National Unity ran for re-election against the main opposition party, the Orange Democratic Movement (ODM). The elections were seen to have been flawed with international observers saying that they were below international standards. After a split which would take a crucial 8% of the votes away from the ODM to the newly formed Orange Democratic Movement-Kenya (ODM-K)'s candidate, Kalonzo Musyoka, the race tightened between ODM candidate Raila Odinga and Kibaki. As the count came in to the Electoral Commission of Kenya (ECK) headquarters, Odinga was shown to have a slight, and then substantial lead as the results from his strongholds came in early. As the ECK continued to count the votes, Kibaki closed the gap and then overtook his opponent by a substantial margin after votes from his stronghold arrived later. This led to protests and open discrediting of the ECK for complicity and to Odinga declaring himself the "people's president" and calling for a recount.^[51]

The protests escalated into ethnic violence and destruction of property, almost 1,000 people were killed and nearly 600,000 displaced.^[52][53][54] The dispute caused underlying tensions over land and its distribution to re-erupt, as it had in the 1992 and 1997 elections.^[54] Hundreds of thousands were forced off their land to relatives elsewhere in the country and some claim weapons are being bought in the region, perhaps in anticipation of the 2012 elections.^[54]

A group of eminent persons of Africa, led by former United Nations secretary-general Kofi Annan, brokered a peaceful solution to the political stalemate.

2008[link]

Current prime minister Raila Odinga

On 28 February 2008, Kibaki and Odinga signed an agreement on the formation of a coalition government in which Odinga would become Kenya's second prime Minister. Under the deal, the president would appoint cabinet ministers from both PNU and ODM camps depending on each party's strength in Parliament. The agreement stipulated that the cabinet would include a vice-president and two deputy Prime Ministers. After being debated and passed by Parliament, the coalition would hold until the end of the current Parliament or if either of the parties withdraws from the deal before then.^{[citation needed]}

The new office of the PM will have power and authority to co-ordinate and supervise the functions of the Government and will be occupied by an elected MP who will be the leader of the party or coalition with majority members in Parliament. The world watched Annan and his UN-backed panel and African Union chairman Jakaya Kikwete as they brought together the erstwhile rivals to the signing ceremony, beamed live on national TV from the steps of Nairobi's Harambee House. On 29 February 2008, representatives of PNU and ODM began working on the finer details of the power-sharing agreement.^[55] Kenyan lawmakers unanimously approved a power-sharing deal 18 March 2008, aimed at salvaging a country usually seen as one of the most stable and prosperous in Africa. The deal brought Kibaki's PNU and Odinga's ODM together and heralded the formation of the grand coalition, in which the two political parties would share power equally.^[56]

Grand coalition[link]

On 13 April 2008, President Kibaki named a grand coalition cabinet of 41 Ministers- including the prime minister and his two deputies. The cabinet, which included 50 Assistant Ministers, was sworn in at the State House in Nairobi on Thursday, 17 April 2008 in the presence of Dr. Kofi Annan and other invited dignitaries.

A constitutional change was considered that would eliminate the position of Prime Minister^[57] and simultaneously reduce the powers of the President. A referendum to vote on the proposed constitution was held on 4 August 2010, and the new constitution passed by a wide margin.^[58] Among other things, the new constitution delegates more power to local governments and gives Kenyans a bill of rights.^[59] It was promulgated on 27 August 2010 at a euphoric ceremony in Nairobi's Uhuru Park, accompanied by a 21-gun salute. The event was graced by a number of African leaders and praised by the international community. As of that day, the new constitution heralding the Second Republic came into force.

Administrative regions[link]

Provinces of Kenya

Kenya is divided into 47 semi-autonomous counties that will be headed by governors who will be elected in the first general election under the new constitution in August 2012 (There is still controversy over whether the elections should be held in August or December 2012). Under the old constitution, Kenya comprised eight provinces each headed by a Provincial Commissioner (centrally appointed by the president). The provinces (mkoa singular mikoa plural in Swahili) were subdivided into districts (wilaya). There were 69 districts as of 1999 census. Districts are then subdivided into 497 divisions (taarafa). The divisions are then subdivided into 2,427 locations (mtaa) and then 6,612 sublocations (mtaa mdogo).^[60] The City of Nairobi enjoys the status of a full administrative province. The government supervises administration of districts and provinces. The provinces are:

Under the current Kenya constitution, local government authorities are not recognized. However, under the old constitution, local governance in Kenya was practised through local authorities. Many urban centres host city, municipal or town councils. Local authorities in rural areas are known as county councils. Local councillors are elected by civic elections, which are held alongside general elections.

Constituencies are an electoral subdivision. An Interim Boundaries commission was formed in year 2010 to review the constituencies and in its report, it recommended creation of additional 80 constituencies. Currently, there are 210 Constituencies in Kenya.^[61]

Economy[link]

20 shilling note from 1994, depicting then-President Daniel arap Moi

Despite western donors' early disillusionment with the government, the economy has seen much expansion, seen by strong performance in tourism, higher education and telecommunications, and acceptable post-drought results in agriculture, especially the vital tea sector.^[62] Kenya's economy grew by more than 7% in 2007, and its foreign debt was greatly reduced.^[62] But this changed immediately after the disputed presidential election of December 2007, following the chaos which engulfed the country.

East and Central Africa's biggest economy has posted tremendous growth in the service sector, boosted by rapid expansion in telecommunication and financial activity over the last decade, and now contributes 62 percent of GDP. Unfortunately, a massive 22 percent of GDP still comes from the unreliable agricultural sector which employs 75 percent of the labor force (a consistent characteristic of under-developed economies that have not attained food security – an important catalyst of economic growth) and a significant portion of the population regularly starves and is heavily dependent on food aid. Industry and manufacturing is the smallest sector that accounts for 16 percent of the GDP.

Kenya has traditionally been a liberal market with minimal government involvement (price control) seen in the oil industry. However, recent legislation allows the government to determine and gazette price-controls on essential commodities like maize flour, kerosine and cooking oil.

Privatisation of state corporations like the defunct Kenya Post and Telecommunications Company, which resulted in East Africa's most profitable company – Safaricom, has led to their revival due to massive private investment.

As of May 2010, economic prospects are positive with 4–5% GDP growth expected, largely because of expansions in tourism, telecommunications, transport, construction and a recovery in agriculture. The World Bank predicts growth of 4% in 2010 and a potential of 4.9% growth in 2011.^[63]

In March 1996, the Presidents of Kenya, Tanzania, and Uganda re-established the East African Community (EAC). The EAC's objectives include harmonizing tariffs and customs regimes, free movement of people, and improving regional infrastructures. In March 2004, the three East African countries signed a Customs Union Agreement.

The more efficient and lucrative technology-knowledge-and-skill-based service; industry and manufacturing sectors only employ 25 percent of the labor force but contributes the remaining 75 percent of the GDP.^[62]

Kenya ranks poorly on Transparency International's corruption perception index.^[64]

Kenya is East and Central Africa's hub for Financial services. The Nairobi Securities Exchange (NSE) is ranked 4th in Africa in terms of Market capitalization.^{[citation needed]} The Kenya banking system is supervised by the Central Bank of Kenya (CBK). As of late July 2004, the system consisted of 43 commercial banks (down from 48 in 2001), several non-bank financial institutions, including mortgage companies, four savings and loan associations, and several score foreign-exchange bureaus.^[62]

Tourism[link]

Tourists on a safari in Kenya

Kenya's services sector, which contributes about 63 percent of GDP, is dominated by tourism. The tourism sector has exhibited steady growth in most years since independence and by the late 1980s had become the country's principal source of foreign exchange. Tourists, the largest number from Germany and the United Kingdom, are attracted mainly to the coastal beaches and the game reserves, notably, the expansive Tsavo National Park (20,808 square kilometers) in the southeast. Tourism has seen a substantial revival over the past several years and is the major contributor to the pick-up in the country's economic growth. Tourism is now Kenya's largest foreign exchange earning sector, followed by flowers, tea, and coffee. In 2006 tourism generated US$803 million, up from US$699 million the previous year.

Agriculture[link]

Cultivation on the slopes of Mount Kenya

Agriculture is the second largest contributor to Kenya's gross domestic product (GDP), after the service sector. In 2005 agriculture, including forestry and fishing, accounted for about 24 percent of GDP, as well as for 18 percent of wage employment and 50 percent of revenue from exports. The principal cash crops are tea, horticultural produce, and coffee; horticultural produce and tea are the main growth sectors and the two most valuable of all of Kenya's exports. The production of major food staples such as corn is subject to sharp weather-related fluctuations. Production downturns periodically necessitate food aid—for example, in 2004 aid for 1.8 million people because of one of Kenya's intermittent droughts.^{[citation needed]} Tea, coffee, sisal, pyrethrum, corn, and wheat are grown in the fertile highlands, one of the most successful agricultural production regions in Africa. Livestock predominates in the semi-arid savanna to the north and east. Coconuts, pineapples, cashew nuts, cotton, sugarcane, sisal, and corn are grown in the lower-lying areas.

Unfortunately, the country has not attained the level of investment and efficiency in agriculture that can guarantee food security and coupled with resulting poverty (53 percent of the population lives below the poverty line), a significant portion of the population regularly starves and is heavily dependent on food aid. Poor roads, an inadequate railway network, under-utilised water transport and expensive air transport have isolated mostly arid and semi-arid areas and farmers in other regions often leave food to rot in the fields because they cannot access markets. This was last seen in August and September 2011 prompting the Kenyans for Kenya initiative by the Red Cross.^[65]

Industry and manufacturing[link]

Although Kenya is the most industrially developed country in East Africa, manufacturing still accounts for only 14 percent of gross domestic product (GDP). Industrial activity, concentrated around the three largest urban centers, Nairobi, Mombasa, and Kisumu, is dominated by food-processing industries such as grain milling, beer production, and sugarcane crushing, and the fabrication of consumer goods, e.g., vehicles from kits. There is a vibrant and fast growing cement production industry.^{[citation needed]} Kenya has an oil refinery that processes imported crude petroleum into petroleum products, mainly for the domestic market. In addition, a substantial and expanding informal sector commonly referred to as Jua Kali engages in small-scale manufacturing of household goods, motor-vehicle parts, and farm implements.^{[citation needed]}

Kenya's inclusion among the beneficiaries of the U.S. Government's African Growth and Opportunity Act (AGOA) has given a boost to manufacturing in recent years. Since AGOA took effect in 2000, Kenya's clothing sales to the United States increased from US$44 million to US$270 million (2006).^{[citation needed]} Other initiatives to strengthen manufacturing have been the new government's favorable tax measures, including the removal of duty on capital equipment and other raw materials.^{[citation needed]}

Energy[link]

The largest share of Kenya's electricity supply comes from hydroelectric stations at dams along the upper Tana River, as well as the Turkwel Gorge Dam in the west. A petroleum-fired plant on the coast, geothermal facilities at Olkaria (near Nairobi), and electricity imported from Uganda make up the rest of the supply. Kenya's installed capacity stood at 1,142 megawatts between 2001 and 2003. The state-owned Kenya Electricity Generating Company (KenGen), established in 1997 under the name of Kenya Power Company, handles the generation of electricity, while the Kenya Power and Lighting Company (KPLC), which is slated for privatization, handles transmission and distribution. Shortfalls of electricity occur periodically, when drought reduces water flow. To become energy sufficient, Kenya aims to build a nuclear power plant by 2017.^[66]

Workers at Olkaria Geothermal Power Plant

Hydrocarbon reserves have yet to be discovered on Kenya's territory, despite several decades of intermittent exploration. Kenya currently imports all crude petroleum requirements. Kenya, east Africa's largest economy, has no strategic reserves and relies solely on oil marketers' 21-day oil reserves required under industry regulations. Petroleum accounts for 20 to 25 percent of the national import bill.^[67]

Although Kenya is yet to give a formal indication of where its exploration program, which now involves half a dozen companies, is headed, in recent weeks, well-placed sources in Uganda's oil industry have suggested that the country is on the verge on making an announcement that could cement East Africa's position as major oil region on the continent. Optimism surrounding the Kenyan program is informed by recent oil discoveries in Uganda that, combined with the fact that the rocks that form the East African Rift System are about the same age, suggests a high potential for oil in Kenya. Gas discoveries in Tanzania and significant proven oil reserves along the border between Uganda and DR Congo have also encouraged interest in the once largely overlooked region. Reacting to the current speculation about prospects for an early oil find, senior geologists at Uganda's Energy Ministry who were at the forefront of the country's search for oil two decades ago, said they had no reason to doubt that there was oil in Kenya, with the area around Lake Turkana and the coastal belt being singled out as the most promising prospects.^[68]

Before its exit mid this year, China National Offshore Oil Corporation (CNOOC) had worked with Africa Oil and Lion Energy Corp to drill an exploratory well in block 9 in northern Kenya. It also had a license for block L2, an inland area in the Lamu basin.^[68]

Vision 2030[link]

In 2007, the Kenyan government unveiled Vision 2030, an economic blueprint it hopes will put the country in the same league as the Asian Economic Tigers by the year 2030.

Oil exploration[link]

On 26 March 2012, Kenyan President Mwai Kibaki announced that oil had been discovered in the Turkana District after exploratory drilling by Anglo-Irish firm Tullow Oil, and he further stated that "It is... the beginning of a long journey to make our country an oil producer, which typically takes in excess of three years. We shall be giving the nation more information as the oil exploration process continues^[69]

Early in 2006 Chinese President Hu Jintao signed an oil exploration contract with Kenya, the latest in a series of deals designed to keep Africa's natural resources flowing to China's rapidly expanding economy.

The deal allowed for China's state-controlled offshore oil and gas company, CNOOC, to prospect for oil in Kenya, which is just beginning to drill its first exploratory wells on the borders of Sudan and Somalia and in coastal waters. No oil has been discovered yet, and there has been no formal estimate of the possible reserves.^[70]

Demographics[link]

Kikuyu woman in traditional attire.

The bantus, nilotes and cushites make up the 42 ethnic groups in Kenya. The bantus form the largest tribes: the Kikuyu (22%), Luhya (14%), Kamba (11%), Kisii (6%) and Meru (6%). Nilotic tribes are the second largest group which includes the Luo (13%), Kalenjin (12%) and Maasai who are the best known but a minority. The Somali, Borana and Rendile are the smallest tribes but occupy the largest portion of the country because of their nomadic life. Asians, Arabs and other non-african kenyans make up about 1 percent of the population although they control much of the economy.^[2]

Kenya's rising urban population is variedly fluent in their mother tongues and the two official languages – English and Swahili. Peri-urban and rural populations are less multilingual with many in remote villages speaking only their mother tongue.

Kenya has a young population, with 73% of residents aged below 30 years, due to rapid population growth;^[71] from 2.9 million to 40 million over the last century.^[72]

Largest cities[link]

v t e Largest cities or towns of Kenya http://www.geonames.org/KE/largest-cities-in-kenya.html
	Rank	City name	Province	Pop.
Nairobi Mombasa	1	Nairobi	Nairobi	2 750 547	Nakuru Eldoret
	2	Mombasa	Coast	799 668
	3	Nakuru	Rift Valley	259 903
	4	Eldoret	Rift Valley	218 446
	5	Kisumu	Nyanza	216 479
	6	Thika	Central	99 322
	7	Kitale	Rift Valley	75 123
	8	Malindi	Coast	68 304
	9	Garissa	North Eastern	67 861
	10	Kakamega	Western	63 426

In addition, Kenya's capital, Nairobi, is home to Kibera, one of the world's largest slums. The shanty town is believed to house between 170,000^[73] and 1 million locals.^[74] The UNHCR base in Dadaab in the north also currently houses around 500,000 people.^[75]

A partial panoramic view of the skyline of Nairobi.

Religion[link]

Holy Ghost RC cathedral in Mombasa.

The vast majority of Kenyans are Christian (83%), with 47.7% regarding themselves as Protestant and 23.5% as Roman Catholic.^[76] Sizeable minorities of other faiths do exist (Muslim 11.2%, indigenous beliefs 1.7%).^[76] Sixty percent of the Muslim population lives in Coast Province, comprising 50 percent of the total population there. Western areas of Coast Province are mostly Christian. The upper part of Eastern Province is home to 10 percent of the country's Muslims, where they constitute the majority religious group.^[77] In addition, there is a large Hindu population in Kenya (around 50,000), who have played a key role in the local economy. There is also a small group of Baha'is.^[78]

Health[link]

Despite major achievements in the health sector, Kenya still faces many challenges. The life expectancy estimate has dropped to approximately 55 years in 2009 – five years below 1990 levels.^[79] The infant mortality rate is high at approximately 44 deaths per 1,000 children in 2012.^[80] The WHO estimated in 2011 that only 42% of births were attended by a skilled health professional.^[81]

Preventable diseases such as malaria, HIV/AIDS, pneumonia, diarrhea and malnutrition are the major child killers and responsible for much morbidity. Weak policies, inadequate health workers, weak management and poor leadership in most public health facilities are largely to blame. According to 2009 estimates, HIV prevalence is about 6.3% of the adult population.^[82] However, the 2011 UNAIDS Report suggests that the HIV epidemic may be improving in Kenya, as HIV prevalence is declining among young people (ages 15–24) and pregnant women.^[83]

The total fertility rate in Kenya is estimated to be 4.49 children per woman in 2012.^[84] Maternal mortality is high, partly because of female genital mutilation.^[62] This practice is however on the decline as the country becomes more modernised and the practice was also banned in the country in 2011.^[85]

Education[link]

School children in a classroom.

Children start school with three years of kindergaten (KG1, KG2 and KG3) for private schools or nursery school which is financed privately because there is no government policy regarding it. There is much celebration and a graduation ceremony at the end of KG3 when the children are about five years old.

Formal education takes 12 years comprising eight years in primary school and four years in secondary or high school. Primary school is free in public schools and those who exit at this level can join a vocational youth/village polytechnic or an apprenticeship program and learn a trade such as tailoring, carpentry, motor vehicle repair, brick-laying and masonry for two years. Those who complete high school can join a polytechnic or other technical college and study for three years or proceed directly to the university and study for four years. Graduates from the polytechnics and colleges can then join the workforce and later obtain a specialised higher diploma qualification after a further one to two years of training, or join the university - usually in the second or third year of their respective course. Many employers regard the higher diploma as equivalent to a bachelors degree and direct admission to post-graduate studies is possible in some universities.

The country's literacy level stands at 85% of the whole population. Preschool, which targets children from age three to five, is an integral component of the education system and is a key requirement for admission to Standard One (First Grade). At the end of primary education, pupils sit the Kenya Certificate of Primary Education (KCPE), which determines those who proceed to secondary school or vocational training. Primary school age is 6/7-13/14 years. For those who proceed to secondary level, there is a national examination at the end of Form Four – the Kenya Certificate of Secondary Education (KCSE), which determines those proceeding to the universities, other professional training or employment. The Joint Admission Board (JAB) is responsible for selecting students joining the public universities. Other than the public schools, there are many private schools in the country, mainly in urban areas. Similarly, there are a number of international schools catering for various overseas educational systems.

Historical background[link]

Independent Kenya's first system of education was introduced by British colonists.^[86] After Kenya's independence on 12 December 1963, an authority named the Ominde Commission was formed to introduce changes that would reflect the nation's sovereignty. The commission focused on identity and unity, which were critical issues at the time. Changes in the subject content of history and geography were made to reflect national cohesion. Between 1964 and 1985, the 7–4–2–3 system was adopted – seven years of primary, four years of lower secondary, two years of upper secondary, and three years of university. All schools had a common curriculum.^[86]

In 1981, the Presidential Working Party on the Second University was commissioned to look at both the possibilities of setting up a second university in Kenya as well as the reforming of the entire education system.^[86] The committee recommended that the 7–4–2–3 system be changed to an 8–4–4 system (eight years in primary, four years in secondary, and four years in university education). The table under Present-day education in Kenya below shows the structure of the 8–4–4 system. Although the 7–4–2–3 system theoretically ended with the introduction of the new 8–4–4 system in 1985, the last batch of students from the former system graduated from Kenyan Universities in 1992.^[86]

Present-day education in Kenya[link]

An MSc student at Kenyatta University in Nairobi

The current 8–4–4 system was launched in January 1985.^[87][88] It put more emphasis on vocational subjects on the assumption that the new structure would enable school dropouts at all levels either to be self-employed or to secure employment in the informal sector.

In January 2003, the Government of Kenya announced the introduction of free primary education. As a result, primary school enrollment increased by about 70%. Secondary and tertiary education enrollment has not increased proportionally because payment is still required for attendance.

In class eight of primary school the Kenya Certificate of Primary Examination (K.C.P.E.) is taken. The result of this examination is needed for placement at secondary school. In form four of secondary schools the Kenya Certificate of Secondary Examination (K.C.S.E.) is taken. Students sit examinations in eight subjects of their choosing. However, English, KiSwahili (Languages) and Mathematics are compulsory subjects.

Private schooling also exists in Kenya.

In 2007 the government issued a statement declaring that from 2008, secondary education would be heavily subsidized, with the government footing all tuition fees.

Culture[link]

Dressed up Maasai warriors

Kenya is a diverse country. Notable peoples include the Swahili on the coast, pastoralist communities in the north, and several different communities in the central and western regions. The Maasai culture is well known because of tourism, despite being a minor percentage of the Kenyan population. They are renowned for their elaborate upper body adornment and jewelry.

Kenya has an extensive music, television and theatre scene.

Literature[link]

Ngũgĩ wa Thiong'o is one of the best known writers of Kenya. His book, Weep Not, Child is an illustration of life in Kenya during the British occupation. This is a story about the effects of the Mau Mau on the lives of black Kenyans. Its combination of themes—colonialism, education, and love—helped to make it one of the best-known novels in Africa.

M.G. Vassanji's 2003 novel The In-Between World of Vikram Lall won the Giller Prize in 2003. It is the fictional memoir of a Kenyan of Indian heritage and his family as they adjust to the changing political climates in colonial and post-colonial Kenya.

Since 2003, the literary journal Kwani? has been publishing Kenyan contemporary literature.

Music[link]

Popular Kenyan musician Jua Cali.

Kenya has a diverse assortment of popular music forms, in addition to multiple types of folk music based on the variety over 40 regional languages.^[89]