The Economic Environment in Kenya
Kenya’s economic freedom score is 52.6,a 2.3 decrease from 2021 making its economy the 138th freest in the 2022 global Index. Kenya is ranked 28th among 47 Africa countries in the Sub-Saharan Africa region (2022).
- Inflation rate is very moderate. The most recent annual inflation rate reported (August 2022) is 8.5%, 8.3% as the previous rate.
- The Gini index coefficient is 40.8 % (2015), ranked 57 globally.
- Kenya is the economic, financial, and transport center of East Africa. Its GDP in 2021 is USD 110.35 billion (7th in Africa) with a CAGR of 7.52% (4th in Africa). Real GDP (PPP) in 2020 was USD 226.94 billion, ranking 7th in Africa and 64th in the world.
- Kenya’s GDP per capita is US$ 2,006.83 (22nd in Africa), with an annual per capita growth rate of 5.1% (2021), PPP of GDP per capita is US$ 4,572.67, 21st highest in Africa, below average. $5,774.58.
Export and Import
Major Exports of tea, cut flowers, essential oils, coffee, and titanium (2019).
Refined petroleum, automobiles, packaged pharmaceuticals, wheat and iron products are the main imports (2019).
Small Consumer Goods (Plastics, Furniture, Batteries, Textiles, Clothing, Soaps, Tobacco, Flour), Agricultural Products, Horticulture, Petroleum Refining. aluminum, steel, lead; cement, merchant ship repair, tourism, and information technology are industrial products.
In 2017, the growth rate of industrial production was 3.6%, ranking 82nd in the world.
Cost of Starting a Business in Kenya is 22.4% of income per capita below the continent’s average rate of 33.35%, 25th highest in Africa and 47 out of 186 globally (2020)
Business Freedom Index for Kenya is 56 points, above Africa’s average of 46 points sitting 12th in Africa and 113th globally (2022).
Investment Freedom Index for Kenya is 55 points, above Africa’s average of 51 points sitting 20th in Africa and 103rd globally (2022).
Kenya has a Cost of Living Index of 57.71 points, making it the 27th highest in Africa and 117th globally (2017).
The Corporate tax rate as of December 2021 is 30% as well as the Personal Income Tax rate was also 30%
Credit rating of Ethiopia
Fitch rating for the year 2022: B+
Credit rating for Ethiopia is Moody’s rating: B2 (2020).
S&P rating for the year 2021 is – B
Bank Credit to private non-financial firms is 2588.90 Billion Kenyan Shillings as of June 2022, a 10.80% increase over the last 12 months.
Kenya’s Bank credit to households as of June 2022 is 485.60 Billion Kenyan Shillings, a 6.10% increase in the last year
Interest rate as of September 2022 is 8.25%, an increase compared to the previous year of 7.5%.
The value of USD has appreciated against the local currency by 9.26% over the past year. The most recently reported (September 2022) exchange rate is 120.4391 Kenyan Shillings per US$1
Negative impacts on Economy
The unemployment rate is below the African average of 10.41%. The last reported unemployment rate as of 2021 is 5.74%, making him the 32nd highest unemployment rate in Africa and the 103rd highest in the world.
Kenya’s female unemployment rate is her 32nd highest in Africa, at 6.09% (2021), and her male unemployment rate is 5.4%, her 32nd highest in Africa.
With a labor force participation rate of 73.24% (14th in Africa and 24th in the world), it will employ just 17.84 million people in Q1 2021. 1.45% increase from last year.
