The overall performance of Kenya's economy since independence has remained “mixed.” Upon attainment of independence in 1963, the economic aims of the new government were carefully set out in Sessional Paper No. 10 of 1965 on African Socialism and its Application to Planning in Kenya.

The objectives set out were seen to be articulate enough to achieve high and growing per capita incomes. The main thrust of this strategy was to promote rapid economic growth through public sector programs, encouragement of both smallholder and large-scale farming and the pursuit of accelerated growth of private sector investment.

In the 1964-73, the economy grew steadily and rapidly at an average rate of 6.5 percent. However, in 1973 decade, the oil crisis slackened growth to 5 per cent per annum with little change in per capita incomes. The country encountered a serious balance of payment deficit as a result of OPECs decision to increase oil prices. This period heralded the beginning of intensive economic policy discussions between Kenya and the Bretton Wood institutions.

The period 1976-86 witnessed the intensification of these problems, which culminated in the drawing up of Sessional Paper No. 1 of 1986 on Economic Management for Renewed Growth. This policy document set to renew the economic recovery and growth through a process of liberalisation

The Sessional Paper proposed a number of fiscal and monetary policy reforms that were far reaching in terms of further opening up of the economy. It set off the process of undertaking far reaching institutional and structural reforms in the economy.

However, these reforms of the 80s and 90s had limited success. To this end, the Government developed the Economic Recovery Strategy for Wealth and Employment Creation (2003-2007)and Action Plan, whose policies saw the rapid recovery of the Kenyan Economy. By the end of the 5 year plan in 2007, Kenya had registered impressive growth rates peaking at 7.1% in 2007.

The government is currently pursuing the Kenya Vision 2030, which is the country’s new development blueprint covering the period 2008 to 2030. It aims to transform Kenya into a newly industrialising, “middle-income country providing a high quality life to all its citizens by the year 2030”. The Kenya Vision 2030 is to be implemented in successive five-year Medium-Term Plans, with the first such plan covering the period 2008 – 2012.

Under Vision 2030, Kenya aims to increase annual GDP growth rates to an average of 10% over the vision horizon.  Six key sectors have been given priority in acting as key growth drivers in the journey to 2030, namely: Tourism, Agriculture, Manufacturing, ICT and Business Process out sourcing, Wholesale and retail trade and Finance. These sectors, as well as the enablers such as energy, transport infrastructure and others thus provide vast opportunities for investment.

1. Agriculture
Agriculture accounts for about 24 percent of the Gross Domestic Product and continues to dominate the Kenyan economy. The country has varied ecological zones and, a wide range of crops is cultivated and livestock reared. Previously, tea and coffee were the biggest foreign exchange earners but horticulture, particularly cut flowers, fruits and vegetables have over the years become the most significant in bringing in forex earnings.

Kenya produced 398,500,000 kgs of tea in 2010, and exported 369,332,906 kgs, making her the number 1 exporter of black tea, ahead of Sri Lanka. Main destinations were Britain, Pakistan, Egypt and Afghanistan with a small quantity landing in Germany.

Horticulture is the fastest growing sector in agriculture steadily increasing by an estimated 15-20% per annum in the past decade. Consignments of fresh vegetables, fruits and cut flowers are freighted daily to various destinations around the world. Exports of cut flowers alone are worth 
Kshs. 58.8 billion in 2008.

2.Tourism
Tourism remains one of the most important sources of foreign exchange to the country.. Tourism earnings have increased greatly Kshs. 17.8 Billion in 2002 to an estimated Kshs 73.7 billion in 2010 . Tourist arrivals stood at 1,609,678 in 2010, an 8% increase over the 2009 figures of which 63,101 were from Germany .

3. Health.
Provision of health care is one of the priorities of the Government. To this end, the number of health facilities grew from  5471  in 2006 to 7,111 in 2010.
Among the key focus areas is the prevention and treatment of Malaria, Tuberculosis and HIV/Aids and sexually transmitted diseases.
Reproductive health is one of the three priority areas ( alongside water and sanitation and private sector development in Agriculture) in which the German Government is providing support under the current bilateral cooperation.

4. Education
The Government gives considerable priority to this sector. Public expenditure on education has stood at approximately 17.7 per cent of total government expenditure in 2008.

In 2010, there were around 71,000 educational institutions of which primary schools accounted for 27,489. In the same year there were secondary schools 7,308 while teacher training colleges for both primary and secondary schools are 34 and 2 respectively. Pre-primary schools were 37,954. Following the universally acclaimed Free Primary Education in 2003, enrollment of pupils rose dramatically. In 2010, the country recorded enrollment of slightly above 9.38 million in the public primary schools and 1.70 million pupils in secondary schools. Kenya has six public and seventeen private universities with an enrolment of 122,800 students in 2008 (including other tertiary institutions).

5. Infrastructure
The Government has progressively addressed most of the infrastructure development aspects and institutional reforms to provide the necessary impetus to the rest of the sectors that depend heavily on the performance of this sector. The Government, in this regard, has approved recommendations on reforms made to the management and operations of the Kenya Ports Authority, the Directorate of Civil Aviation, Water Resources Management and the strategic partnership cum commercialisation arrangements for the roads sub-sector and Telkom Kenya Limited. Already, action plan on privatisation of Telkom Kenya has started while that of the management and operations of the Kenya Railways was completed in October 2005. Other areas where the government is laying emphasis are road, rail, air, marine and pipeline transport.

6. Communications
An efficient and modern communications system contributes directly and indirectly to poverty alleviation by facilitating economic growth. As such, telephone exchange connections are expected to increase to 943,000 by 2008 while public payphones are expected to reach 24,600 in 2008.

There are two mobile phone and thirty Internet Service Providers while the Postal Corporation of Kenya has about 890 post offices with 387,000 private letterboxes.

On broadcast media, it is estimated that 3 per cent of people own TVs while 68 per cent have radios. Radio covers 90 percent of the population. The Kenya Institute of Mass Communications is expected to continue training manpower for the film industry, which will create employment, promote tourism and enhance exports.
The Kenya Meteorological Department provides data and information to the shipping and aviation industries. The country has opened some 2,000 rainfall stations out the required 8,000.

7. Sanitation
The focus is on the provision of water for domestic, agriculture, livestock development and industrial utilization. Statistics show that 75 per cent and 50 per cent of the urban and rural populations respectively have access to clean drinking water. There are over 1,800 water supply stations run by the Government, Non-Governmental Organizations, Self Help Groups and the communities themselves. In addition, there are about 1,782 small dams and 669 water pans.

8. Energy
Kenya's energy sector is largely dominated by imported petroleum for the modern sector and wood fuel for rural communities. The domestic demand for petroleum fuels accounts for about 25 per cent of the total import bill while wood fuel provides 68 per cent of the total energy requirements with petroleum, electricity and other alternative sources accounting for 32 per cent.

The current policy objectives emphasize the need for the availability of energy, accessibility at cost effective prices and the supply to support sustainable socio-economic development while protecting and conserving the environment.

Other strategies include increasing competition in the Petroleum sub-sector as well as encouraging and promoting alternative energy technologies to supplement the traditional source.

9. Privatisation
For the last one decade, Kenya has put in place mechanism aimed at divesting from state corporations. The Government has made substantial preparations for the privatisation of her strategic parastatals including the Kenya Power and Lighting Company, Telkom Kenya, Kenya Ports Authority, Kenya Reinsurance Corporation and the Nairobi Water Supply. The Kenya Commercial Bank, Kenya Airways, Kenya Railways Corporation, and the National Bank of Kenya are some of the parastatals from which the government has already divested.

In order to achieve an efficient divesture program, the Government has prepared a privatisation Bill, which will provide the necessary legal framework of guiding the process.

10. Trade
The country's trade performance has been modest during the last five years, both in the local and the external context. Locally, liberalisation has led to an influx of imported products, which in a way has created stability in prices and eliminated shortages of essential commodities. In external trade, the main destination of Kenya's exports on regional basis is Africa followed by the European Union.

On the regional and international market, access to the following will be enhanced: The Common Markets for Eastern and Southern Africa (COMESA), East African Community (EAC), Inter-Governmental Authority on Development (IGAD), African Caribbean Pacific-European Union (ACP-EU), African Growth and Opportunity Act (AGOA) and the World Trade Organisation (WTO).


For more information, please click on the following websites

Agriculture - www.kilimo.go.ke
Horticulture - www.hcda.or.ke
Kenya Sugar Board - E-mail: ksb@africaonlineco.ke Website link currently being updated
Meat - E-mail: info@kenyameat.co.ke Website not available
Cashew nuts - www.kenyanut.com
Fishing - www.kenyanut.com
Flowers - www.kenyaflowers.co.ke
Livestock - www.livestock.go.ke
Pyrethrum - www.kenya-pyrethrum.com