Embed This Data
- GDP (PPP):
- $152.8 billion
- 5.6% growth
- 5.4% 5-year compound annual growth
- $3,361 per capita
- Inflation (CPI):
- FDI Inflow:
Kenya’s economic freedom score is 54.7, making its economy the 129th freest in the 2018 Index. Its overall score has increased by 1.2 points, with improvements in business freedom and property rights offsetting declines in the government spending and fiscal health indicators. Kenya is ranked 22nd among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.
Kenya’s protracted electoral stalemate has exposed deep political and ethnic divisions. The country has a growing entrepreneurial middle class and has enjoyed steady growth, but its economic and development trajectory is impaired by weak governance, ineffective rule of law, and corruption. The government has successfully courted foreign direct investment for infrastructure development and is promoting regional trade liberalization. A new government system created in 2013 has gradually devolved state revenues and responsibilities to 47 counties.
The International Criminal Court charged Uhuru Kenyatta, son of Kenya’s first president, with crimes against humanity during post-election violence in 2007, but charges were later withdrawn. In 2013, Uhuru Kenyatta won the first presidential election conducted under a 2010 constitution that added checks and balances to executive power. Kenyatta was declared the winner of the high-turnout August 2017 presidential election, but the Supreme Court annulled it and upheld main opposition challenger Raila Odinga’s claim of irregularities. Kenyatta then won an October 2017 revote in an election marred by low turnout and lack of a clear mandate. Kenya is the economic, financial, and transport hub of East Africa, and its real GDP growth has been robust in recent years.
The legal infrastructure around land ownership and registration has changed in recent years, and the state has new powers to confiscate land that it determines has not been used productively. The judiciary demonstrates independence and impartiality, but courts are undermined by weak institutional capacity. Corruption is pervasive and entrenched, although some progress has been made in fighting it.
The top income and corporate tax rates are 30 percent. Other taxes include a value-added tax and a tax on interest. The overall tax burden equals 18.7 percent of total domestic income. Over the past three years, government spending has amounted to 27.4 percent of total output (GDP), and budget deficits have averaged 7.6 percent of GDP. Public debt is equivalent to 54.4 percent of GDP.
In 2016, Kenya simplified the process for starting a business but also made it more expensive. Getting electricity, registering property, minority investor protections, and resolution of insolvency were improved. The government is the largest formal-sector employer. Illegal child labor remains a problem. The government continues to regulate prices through subsidies on corn, milk, sugar, and other staples and through state-owned enterprises.
Trade is moderately important to Kenya’s economy; the combined value of exports and imports equals 38 percent of GDP. The average applied tariff rate is 7.6 percent. Nontariff barriers impede trade. Government openness to foreign investment is below average. The financial sector remains relatively stable. Nonperforming loans, particularly from state-owned banks to state-owned enterprises, have been declining. Capital markets are relatively small.