Kenya attracts a number of our clients, thanks to its strategic location at the heart of the East African Community. Its increasing ties with China bode well for the country’s trade and investment. Kenya is also allied with the US as part of the Horn of Africa region. The country’s economy is broad-based, reducing its vulnerability to commodity price shocks. Technology stands out as a rapidly growing sector in Kenya.

We keep our clients informed of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on 15 of Kenya’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our expert teams. We aim to keep you ahead of the curve, so you can do business with ease in Kenya.

Country Risk

Kenya Country Risk

BMI View:

Core Views

  • The April 2 attack by al-Shabaab on Garissa University in north eastern Kenya highlights the country's perilous security outlook, which is unlikely to improve over the coming months.

  • The politicization of sharp ethnic divisions remains the key threat to Kenya's long-term political stability. Terrorism linked to Kenya's military involvement in Somalia is likely to remain a risk, but it does not pose a systemic threat to political stability.

  • Despite a tense security situation, we believe that a booming consumer story, a robust outlook for investment and lower oil prices will see real GDP growth in Kenya expand at around 6.5% annually over the next few years..

  • Concerns about public spending are rising in Kenya. While we predict that the country will see its fiscal deficit narrow modestly over the...

To read the full article Register for Free or Login

Kenya Operational Risk Coverage (9)

Kenya Operational Risk

BMI View:

BMI View: Kenya's position as an economic and financial hub in East Africa is seriously threatened by rising levels of crime and terrorism, which the security services, crippled by rampant corruption, are struggling to contain. This poses a significant risk to the safety of foreign workers and business property, and has also had a severe impact on the Kenyan tourism industry, which previously offered one of the most promising opportunities for investment. In addition, businesses in the country are hindered by inefficient bureaucracy and high levels of tax. Consequently, at present the business environment in Kenya is not favourable to foreign investors. Nevertheless, bureaucratic reform and infrastructure developments should improve the ease of doing business in the country over the medium term, and further progress...

To read the full article Register for Free or Login

Kenya Crime & Security

BMI View:

Crime and security risks in Kenya are driven by the significant and rising threat of terrorist attacks, high levels of corruption within the security forces, the growing cyber security risks and the high potential costs arising from these issues. Kenya therefore receives a score of 29.4 out of 100 for Crime and Security Risk, putting it in 27 th place out of 48 states regionally. This is Kenya's worst score across BMI's Operational Risk Index, indicating that the terrorist threat is a serious impediment to doing business in the country.

Kenya's greatest threat to businesses is the heightened risk of terrorism attacks. There has been a rise in attacks in recent years, with the last major attack on a university in the northern part of the country in April 2015. Kenya's security forces lack adequate training and coordination, demonstrated by the ineffectiveness of counter-...

To read the full article Register for Free or Login

Kenya Labour Market

BMI View:

BMI View: The main advantage for businesses in Kenya, in terms of labour market risks, is the quality and variety of options available in the workforce in comparison with two of its neighbours and closest competitors for investment, Uganda and Tanzania. Kenya benefits from better education, in terms of quality and enrolment rates, and more widespread literacy among the working population. This means that businesses in the country have less trouble finding adequately skilled staff, face lower costs in terms of training, and have to bring in fewer foreign workers than companies in Uganda and Tanzania. This makes Kenya an attractive location for investment in East Africa. However, we caution that substantial risks remain present in the labour force, mainly stemming from poor healthcare, high labour costs and powerful trade unions. In light of these considerations...

To read the full article Register for Free or Login

Kenya Logistics

BMI View:

BMI View: A well developed logistics network in comparison to its regional peers gives Kenya a significant advantage in its bid to become the primary trading hub in East Africa and bolsters its attractiveness to investors. The country's transport network is of relatively high quality and offers a variety of options for internal supply chains, including road, rail and air transport. Major investment in infrastructure projects is also underway, which will further diversify logistics options and allow the country to become the primary destination for international shipping in the region. That said, Kenya's logistics network remains beset by a number of risks which indicate that many improvements are still required. In particular, utilities infrastructure is inadequate and unreliable, resulting in frequent blackouts,...

To read the full article Register for Free or Login

Kenya Trade & Investment

BMI View:

BMI View: Although Kenya's economy is one of the best developed in Sub-Saharan Africa (SSA), we highlight that the country's investment and business environment is hindered by high levels of tax and bureaucracy, widespread corruption in state institutions, and poor enforcement of intellectual property protection. Therefore, while the government is open to foreign business ventures, and there are opportunities for investment, particularly in the manufacturing industry, potential returns may be limited. Consequently, Kenya performs poorly overall in the BMI Trade and Investment Risk Index, with a score of 37.7 out of 100 ranking it behind neighbours Uganda and Rwanda, but above Tanzania, in 16th place out...

To read the full article Register for Free or Login

Kenya Industry Coverage (16)

Agribusiness

Kenya Agribusiness

BMI View:

BMI View: Kenya will continue to underperform its regional peers with regard to the development of its agricultural sector. Despite COMESA granting a one-year extension to the sugar import safeguard, which will provide a short term boost, we expect the country's sugar sector to remain regionally inefficient and therefore to post very limited growth over the coming years. However, we continue to forecast steady coffee production growth in 2014/15 due to relatively high domestic prices and improvement in husbandry techniques.

Agribusiness Market Value
BMI Market Value By Commodity (2011-2019)
...

To read the full article Register for Free or Login

Autos

Kenya Autos

BMI View:

We hold an upbeat outlook for the Kenyan automotive sector as a result of its accelerating private consumption rates, rising fixed investment, additional local government fleet purchases, and the country's status as the commercial hub of the fast-growing East African Community (EAC). In light of this, BMI forecasts that total first vehicle registrations growth over 2015-2019 will average 12.7%, with significant upside risks to our forecast.

BMI's Country Risk team continues to forecast strong growth in Kenya over our five-year forecast period to 2019. We currently forecast real GDP to grow 6.7% in 2015 and 6.5% in 2016, making Kenya the 10th fastest growing country in the Africa region, a significant milestone considering the much lower base from which other most other Sub-Saharan Africa countries are growing. We believe rising private consumption will account for the bulk of...

To read the full article Register for Free or Login

Commercial Banking

Kenya Commercial Banking

BMI View:

...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

To read the full article Register for Free or Login

Food & Drink

Kenya Food & Drink

BMI View:

BMI View: Consumer spending will be the key driver of economic growth in Kenya and we predict that spending by Kenyan households will rise in real terms by 5.0% in 2015 and 6.0% in 2016. This rise is the result of a growing population, rising incomes due to urbanisation and growing financial inclusion spurred by the boom in mobile financial services. The outlook for Kenya's food and drink industry continues to be positive, with strong growth expected over the short-to-medium term. The success of premium-chain coffee shops highlights the likelihood that premiumisation will play a major part in the growth of many segments of the Kenyan food and drink industry. Going forward, the mass grocery sector is likely to be a key growth area...

To read the full article Register for Free or Login

Freight Transport

Kenya Freight Transport

BMI View:

Although Kenya's real GDP grew 5.8% year-on-year (y-o-y) in Q2 2014, according to data released by the Kenya National Bureau of Statistics and reported by Reuters, the country's freight industry will nevertheless face headwinds in the form of the poor performance of Kenya's key export sectors over the coming years.

Kenya's key export sectors will continue to post relatively weak growth over the medium term, exerting a drag on the country's trade balance, as well as the freight industry. We predict that the deficit - and the wider current account deficit - will gradually narrow towards the end of our 2014 to 2018 forecast period due to slower import growth.

Figures from the Central Bank of Kenya (CBK) indicate that export revenues were, in local currency terms, 3.3% lower in the first six months of 2014 than in the same period in 2013. The falling value of the Kenyan shilling means that shipments fell by 5.0% in US...

To read the full article Register for Free or Login

Information Technology

Kenya Information Technology

BMI View:

BMI View: Ongoing investments in datacentres, broadband networks, the development of e-government services and IT companies' launch of internet of things platforms will underpin the particularly strong growth in the IT software and services segments in Ghana, Kenya and Nigeria over the five years to 2019. However, the still low penetration of computers means that the hardware segment will remain the largest contributor to all three countries' IT markets. Despite risks of lower commodities prices constraining government budgets, we expect the public sector to remain the largest spender on IT products and solutions, while consumer-facing industries such as financial services, telecoms, and retail, including e-commerce, to drive private sector IT spending.

Headline Expenditure Projections...

To read the full article Register for Free or Login

Infrastructure

Kenya Infrastructure

BMI View:

BMI View: Kenya's construction and infrastructure sector is forecast to grow at 9% y-o-y in 2015 and will maintain strong growth over our 10-year forecast, only starting to moderate towards end of our outlook. Economic headwinds from currency devaluation and rising interest rates, as well as the devolution of fiscal powers will restrain investments to infrastructure and the residential and non-residential sectors. The successful issuance of Kenya's eurobond shows long-term interest in the market is strong and bodes well for the government's ability to fund infrastructure investment.

Key Developments

The World Bank will release a USD1.2bn loan to the states in the East African Community (EAC) to upgrade infrastructure and boost the region's integration programme. The investment will be used to improve the handling capacity and efficiency of...

To read the full article Register for Free or Login

Insurance

Kenya Insurance

BMI View:

BMI View :

By various measures, Kenya's insurance sector is among the most developed in Sub-Saharan Africa. The country has a high level of insurance penetration with premiums equivalent to about 3% of GDP, and is also home to some of Africa's largest insurance groups as well as a number of major multinational firms.

A robust economic backdrop has been a key driver of underwriting activity and is likely to continue to be so over the coming years. A growing middle class and increased levels of households spending are creating an opportunity for both life and non-life insurers to grow their business. With higher disposable incomes, increasingly, Kenyans are gaining awareness and investing in personal lines, including health, property and motor vehicle covers as well as savings and retirement income products. BMI's Country Risk...

To read the full article Register for Free or Login

Medical Devices

Kenya Medical Devices

BMI View:

BMI Industry View: We expect the Kenyan medical device market to grow by a CAGR of 14.4% over the 2013-2018 period, alongside impressive GDP growth and strengthening imports. Almost all medical devices are imported, as domestic production is limited to basic consumable items, a situation that is expected to remain unchanged for the foreseeable future. Demand for medical devices remains high as many health facilities require modernisation.

Headline Industry Forecasts

  • In 2013, the Kenyan medical device market was estimated at USD122.7mn, or USD2.8 per capita. This market size is comparable to Oman; in per capita terms, the market is similar to the Philippines. The market is expected to expand at a CAGR of 14.4% over the 2013-...

To read the full article Register for Free or Login

Pharmaceuticals & Healthcare

Kenya Pharmaceuticals & Healthcare

BMI View:

BMI View: Our outlook for Kenya's pharmaceutical expenditure is positive and will be driven by expanding national health insurance coverage and improving public healthcare provision. While the Kenyan government is focused on improving its population's access to healthcare, drugmakers and medical device companies looking for a rapid return on investment will face challenges. Poor healthcare human resources and infrastructure will continue to limit the population's access to healthcare.

Headline Expenditure Projections

  • Pharmaceuticals: KES63.75bn (USD725mn) in 2014 to KES73.37bn (USD768mn) in 2015; 15.1% growth in local currency terms and 5.9% in US dollar terms.

  • ...

To read the full article Register for Free or Login

Power

Kenya Power

BMI View:

BMI View: Kenya is investing heavily in expanding power capacity and generation and there are a large number of power infrastructure projects in the pipeline. The country is focusing on diversifying its energy mix, reducing the reliance on hydropower, introducing gas fired thermal plants and expanding the use of renewables, particularly geothermal, wind and solar power and a number of plants are expected to come online during our ten-year forecast period to 2024.

Kenya presents a generally attractive investment destination, with demand for electricity increasing rapidly, supported by a government programme to increase connectivity across the country. As a result many foreign power construction and investment firms are active in the market. Power generation is expected to almost double over the forecast period. However, we caution there are downside...

To read the full article Register for Free or Login

Renewables

Kenya Renewables

BMI View:

BMI View: The Kenyan government's push to improve electrification rates, expand renewable energy, improve electricity trade links and reduce its reliance on hydropower and diesel are strategically sound moves that will benefit the country both economically and socially over the coming decade. We hold a particularly optimistic outlook towards the country's geothermal industry, as capacity comes online and the government continues to invite proposals for the construction of new geothermal power plants. On the other hand construction at the Lake Turkana wind power plant provides a significant boost for the Kenyan wind sector, and marks a major milestone for the flagship wind project. That said, we have factored in the completion of the project into our 2018 forecasts - a delay of one year - in...

To read the full article Register for Free or Login

Retail

Kenya Retail

BMI View:

BMI View: Increasingly sophisticated consumer lifestyles, urbanisation and double-digit economic growth are helping to drive retailing growth in Kenya. We are forecasting steady growth in household spending, which we expect to average a respectable 10.16% over our forecast period. Government initiatives are also helping support retail expansion, with infrastructural improvements making the country increasingly attractive to international retailers.

Kenya's economy has shown impressive year-on-year economic growth over the past few years. We currently forecast real GDP growth in 2015 to reach 6.32%, slowing slightly to 6.27% in 2016. The country has a relatively stable political environment, combined with rich natural resources and this is helping support our long-term outlook for Kenya's economy. Unsurprisingly, economic growth has started to benefit households with a rising,...

To read the full article Register for Free or Login

Shipping

Kenya Shipping

BMI View:

BMI View: Our outlook for the Kenyan maritime sector is in line with that of the region - strong throughput growth forecasts as a result of robust economic activity and large-scale port developments. The continued expansion of the port of Mombasa, coupled with the imminent completion of the Lamu port, bode well for the development of Kenya as a strategic East African trade hub.

For 2015, we continue to hold a strong growth outlook for Kenya's ports and shipping sector based on three main factors: strong domestic growth in Kenya itself, a dynamic East African region (important because Mombasa acts as a trade gateway for many of Kenya's neighbouring countries) and, finally, continuing signs that Mombasa port's ongoing congestion problems are easing.

BMI remains bullish about...

To read the full article Register for Free or Login

Telecommunications

Kenya Telecommunications

BMI View:

BMI View:

Although Kenya's mobile penetration of less than 75% shows there remains significant room for subscriptions growth, consolidation in the mobile market is quickly driving operators to focus more on higher quality networks and service innovation. Mobile financial services will be a key driver of subscriptions and revenue growth, with Equitel's entry into the market bringing consumers and businesses a wider range of payments, savings and loans services. In the wireline sector, strong competition from well funded players is also supporting continued investment in next generation networks and the launch of converged services. Meanwhile, Kenya'...

To read the full article Register for Free or Login

Tourism

Kenya Tourism

BMI View:

BMI View: The Kenya tourism report looks at a range of key indicators in this well established, yet struggling, tourism destination. A decline in the security situation is impacting heavily on the tourism market, particularly along the coastline, and deterring potential investors and visitors alike. Although we expect to see a return to growth towards the end of the current forecast period, it will be some time before Kenya regains previous inbound tourism highs. In the meantime, the outbound tourism market offers more attractive growth prospects based on healthy domestic economic growth.

Kenya has long been established as a popular safari holiday destination and benefits from having diverse source markets including the United Kingdom, the Netherlands, the United Arab Emirates, India and South Africa. The country's tourism market has however been in decline for...

To read the full article Register for Free or Login

Latest Kenya Articles

Latest Kenya Blogs

Latest Kenya Podcasts

  • Current global economic conditions are weighing on Sub-Saharan Africa'...

  • Inefficiencies within Kenya's power sector and an overreliance on hydr...

  • Huge media attention and investment has made Sub-Saharan Africa's tele...