Resources from the land

Kenya is East Africa’s industrial nerve-centre. Most business is in private hands, with foreign investment supporting the agricultural and mining sectors.

Agricultural products such as tea, fresh flowers, fruits, vegetables and coffee make up the majority of Kenya’s exports.  And much of the country’s manufacturing revolves around food and beverages, although Kenya also exports petroleum products from crude oil shipped into the country and refined near Mombasa.

Other important exports include limestone, salt, fluorite/fluorspar and soda ash (used to make glass), which is quarried at Lake Magadi in the Rift Valley, the second largest source of soda in the world. Kenya also has some deposits of gold and precious stones.

Tourism and the service industry

Kenya’s wildlife attracts many visitors to the country’s national parks and game reserves. Its sandy beaches and coral reefs are also a draw for foreign visitors. Tourism is therefore of key importance to the economy.  After recent disruption following the 2007 election violence, visitor numbers have bounced back and the Kenyan economy as a whole has been recovering, growing four percent in 2010.

Because of its long history of attracting visitors, Kenya’s service industries – such as banks, hotels, restaurants – are well-developed and outperform those of other cities in the region. The government hopes to encourage the growth of new service industries, such as call centre operations.

With a boom in mobile telecommunications, even among the poorest, Kenya is leading the way in innovative mobile services such as phone banking (with M-Pesa used by more than 13 million Kenyans).

Protecting resources for the future

The future success of the economy depends largely on a stable political situation and the curbing of corruption and patronage, which limits companies’ willingness to invest in the country.

Massive population growth over the last four decades has also put huge strain on Kenya’s land and the environmental impact of deforestation is already being felt. A quarter of the Mau forest in central Kenya has been cleared in the last 15 years, resulting in the drying up of rivers fed by the forest. This affects the livelihood of around ten million Kenyans and causes shortages of electricity from the hydroelectric plants on the Tana and Turkwel rivers.

But with better protection of the environment and a reduction in corruption and mismanagement, Kenya’s trading culture, many entrepreneurs and strong industry sectors should afford the economy a favourable future.