GDP (US$ Billion)

79.22 (2017)

World Ranking 68/193

GDP Per Capita (US$)

1,695 (2017)

World Ranking 148/192

Economic Structure

(in terms of GDP composition, 2017)


External Trade (% of GDP)

37.3 (2017)

Currency (Period Average)

Kenyan Shilling

101.30 per US$ (2017)

Political System

Unitary multiparty republic


Kenya has made a number of political, structural and economic reforms that have largely driven sustained economic growth, social development and political gains over the past decade. Kenya's recent political reforms are the result of a new constitution, passed in August 2010, which introduced a bicameral legislative house and devolved power to county governments and a constitutionally tenured judiciary and electoral body. Devolution ushered in a new political and economic governance system, giving counties control of their own development agenda, strengthening accountability and public service delivery at local levels.

Sources: World Bank, Fitch Solutions

Major Economic/Political Events and Upcoming Elections

July 2010
Kenya joined its neighbours in forming a new East African Common Market, intended to integrate the region's economy.

August 2010
The country's new constitution came into effect, devolving power to the counties.

September 2010 - June 2011
East Africa was hit by the worst drought in 60 years.

March 2012
Oil was discovered.

March 2013
President Uhuru Kenyatta won the presidential election with just over 50% of the vote.

August - October 2017
President Kenyatta was declared the winner of the presidential election in August as well as the re-run in October. His party, the Jubilee Party, won the majority of seats in the general election.

The Kenya-Ethiopia electricity transmission interconnector is scheduled to be ready in mid-2019, completing the first phase of the East African power pool project. In addition, TANESCO is implementing the Kenya-Tanzania Power Interconnection project, with operations scheduled to start in 2020. The project will connect Kenya and Tanzania to the Southern Africa Power Pool (SAPP) through a 507.5km 400kV transmission line. Kenya will extend the transmission line to Ethiopia, while Tanzania will extend the line to Zambia, connecting East Africa to SAPP. The Tanzania-Zambia interconnection project is said to go online in 2022.

Construction is set to start in 2019 on the Special Economic Zones (SEZs) in Likoni, Kenya. The works will start when the residents affected by the project are fully compensated. Also, Kenya Ports Authority has started the construction on the second phase of the Dongo-Kundu port in Likoni. Kenya National Highway Authority will undertake the construction of the road connecting the SEZs to the second phase of the Dongo Kundu bypass.

Sources: BBC country profile – Timeline, Fitch Solutions

Major Economic Indicators
Graph: Kenya real GDP and inflation
Graph: Kenya real GDP and inflation
Graph: Kenya GDP by sector (2017)
Graph: Kenya GDP by sector (2017)
Graph: Kenya unemployment rate
Graph: Kenya unemployment rate
Graph: Kenya current account balance
Graph: Kenya current account balance

e = estimate, f = forecast

Sources: IMF, World Economic Outlook Database, Fitch Solutions

Date last reviewed: May 14, 2019

External Trade

Merchandise Trade

Graph: Kenya merchandise trade
Graph: Kenya merchandise trade

Source: WTO

Date last reviewed: May 14, 2019

Graph: Kenya major export commodities (2018)
Graph: Kenya major export commodities (2018)
Graph: Kenya major export markets (2018)
Graph: Kenya major export markets (2018)
Graph: Kenya major import commodities (2018)
Graph: Kenya major import commodities (2018)
Graph: Kenya major import markets (2018)
Graph: Kenya major import markets (2018)

Sources: Trade Map, Fitch Solutions

Date last reviewed: May 14, 2019

Trade in Services

Graph: Kenya trade in services
Graph: Kenya trade in services

e = estimate

Source: WTO

Date last reviewed: May 14, 2019

Trade Policies
  • Kenya has been a World Trade Organization member since January 1, 1995 and a member of the General Agreement on Tariffs and Trade since February 5, 1964.

  • Deepening regional integration in the East African Community (EAC), Common Market for Eastern and Southern Africa (COMESA), Tripartite Free Trade Area (TFTA) and the Africa Continental Free Trade Area (AfCFTA) are part of the country's long-term goals that will yield benefits for the trading environment.

  • Kenya's EAC membership gives businesses in the country access to a large market with reduced trade costs. EAC member states have signed a protocol to establish a common customs union.

  • As part of COMESA, most members have an open border for traded goods and services and preferential tariff rates. The final objective of COMESA is to establish a fully integrated, unified economic space.

  • Overall tariff barriers to trade in Kenya remain somewhat high, at an average of 8.9%, placing a particular burden on firms reliant on imported inputs.

  • There is increasing emphasis on improving intra-regional trade and the Kenyan government has been at the forefront of major regional infrastructure development to realise this aim. In a fresh bid to open up their borders and facilitate investment and trade, Kenya and Ethiopia's leaders agreed to remove various barriers that impede business development and intra-regional trade. Changes made include relaxed rules on residence for investors, streamlined application procedures for Kenyan companies seeking to invest in Ethiopia, as well as relaxed work permits. Over the medium term, Kenyan investors venturing into Ethiopia should expect fewer restrictions to their businesses once an agreement signed by the two countries is implemented.

  • In 2017, Kenya and Tanzania opened the modern Holili/Taveta border post to facilitate regional trade. This marks the first modern border post to be operated among the 13 one-stop border posts in East Africa and South Sudan. Authorities from both countries expect that the facility will reduce the cost of doing business by 40% and accelerate regional integration and economic growth among the East African member states. While non-tariff barriers remain a major challenge across the borders, the facility will enhance integrated border management to increase the free flow of movement and goods. In addition, further changes were implemented, such as opening the port of Mombasa for 24 hours and reducing the frequency of road blocks, which reduce import and export lead times and costs.

  • In October 2016, South Africa and Kenya moved to soften trade and visa barriers between the two regional powerhouses as part of ongoing efforts to boost low levels of commerce within Sub-Saharan Africa.

  • Kenya has signed bilateral trade agreements with several countries, including Argentina, Bangladesh, Bulgaria, mainland China, Comoros, the Democratic Republic of the Congo, Djibouti, Egypt, Hungary, India, Iraq, Lesotho, Liberia, Netherlands, Nigeria, Pakistan, Poland, Romania, Russia, Rwanda, Somalia, South Korea, Swatini, Tanzania, Thailand, Zambia and Zimbabwe.

  • A Railway Development Levy has been in place since 2013, imposing a 1.5% tariff on all imported products. Non-tariff barriers to trade, including high levels of bureaucracy, delays at customs clearance and port congestion, add further costs to imports for businesses.

  • In September 2016, Kenya's parliament ratified the Economic Partnership Agreement (EPA) with the European Union (EU) that will allow Kenya to export its agricultural products to Europe in a move to securing duty-free market access to the EU.

Sources: WTO – Trade Policy Review, Fitch Solutions

Trade Agreement

Trade Updates

Bilateral trade agreements are under negotiation with several countries, including Belarus, Czech Republic, Ethiopia, Eritrea, Iran, Kazakhstan, Mauritius, Mozambique and South Africa. Increasing trade partners will provide a solid basis for durable export and import growth in the long term.

Multinational Trade Agreements


  1. Common Market for Eastern and Southern Africa (COMESA): Kenya is part of COMESA, a collective of 21 countries under a FTA. Most members have opened their borders for traded goods and services. Notably this group comprises Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, eSwatini, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia, Uganda, Zambia and Zimbabwe. The agreement entered into force on February 17, 1999 and covers the trade of goods. However, not all members subscribe to the FTA.

  2. East African Community (EAC): The EAC comprises Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda. The agreement entered into force on July 7, 2000 for goods and July 1, 2010 for services. The customs union aids regional trade flows and allows businesses to use Kenya as an entry point for the East African market. Trade with neighbouring states is substantial.

  3. EAC-United States: The United States is a major export market and the Trade and Investment Framework Agreement and Africa Growth and Development Act (AGOA) removed tariffs for some product exports to the United States (such as textiles), reducing trade barriers. Kenya qualifies for duty free access until 2025 to the United States market under AGOA. Some of Kenya's major products that qualify for export under AGOA include textiles, apparels and handicrafts. Under the Generalised System of Preferences (GSP), a wide range of Kenya's manufactured products are entitled to preferential duty treatment in the United States, Japan, Canada, New Zealand, Australia, Switzerland, Norway, Sweden, Finland, Austria and other European countries. In addition, no quantitative restrictions are applicable to Kenyan exports on any of the 3,000-plus items currently eligible for GSP treatment.

Ratified And Awaiting Implementation

The African Continental Free Trade Agreement (AfCFTA): The AfCFTA is a trade agreement signed by 49 African Union (AU) member states with the goal of creating a single market followed by free movement and a single currency union. The AfCFTA was signed in Kigali, Rwanda on March 21, 2018, and was ratified by the necessary 22 states in April 2019. Implementation of the agreement will come into effect 30 days after the documentation regarding the ratification of the agreement is submitted to the AU. Negotiations will continue in 2019, including negotiations surrounding the relevant competition policy, investment and intellectual property rights. A draft shall be submitted for the January 2020 AU Assembly. Angola has signed the agreement, but is yet to ratify it.

Under Negotiation

EAC-EU EPA: The EAC finalised the negotiations for an EPA with the EU on October 16, 2014. Kenya and Rwanda signed the EPA in September 2016 and Kenya has ratified it. For the EPA to enter into force, the three remaining EAC members need to sign and ratify the agreement. EU states are key trade partners and the EPA facilitates access to this large market. Exports from Kenya entering the EU are entitled to duty reductions and freedom from all quota restrictions. Trade preferences include duty-free entry of all industrial products as well as a wide range of agricultural products, including beef, fish, dairy products, cereals, fresh and processed fruits, and vegetables.

Sources: WTO Regional Trade Agreements database, Government websites, Fitch Solutions

Investment Policy

Foreign Direct Investment

Graph: Kenya FDI stock
Graph: Kenya FDI stock
Graph: Kenya FDI flow
Graph: Kenya FDI flow

Source: UNCTAD

Date last reviewed: May 14, 2019

Foreign Direct Investment Policy

  1. Foreign ownership is permitted across almost all industries with the exception of some sectors designated as strategic in defence-related industries, minerals and farmland. Foreign ownership caps apply for sectors such as telecommunications (80%), transport (97%), financial services such as life and health insurance (67%) and media (75%).

  2. The minimum foreign investment to qualify for investment incentives is USD100,000.

  3. Foreigners cannot own land in Kenya, but they can lease it in 99-year increments.

  4. Foreign ownership of financial services and telecommunications companies is capped at 78% and 80% respectively, though the state permits telecommunications companies three years in which to find local investors to meet the 20% Kenyan shareholding ownership requirements.

  5. Kenya Investment Authority (KenInvest) is a statutory body that was established in 2004 through an Act of Parliament (Investment Promotion Act No. 6 of 2004) with the main objective of promoting investments in Kenya. It is responsible for facilitating the implementation of new investment projects, providing after care services for new and existing investments, as well as organising investment promotion activities both locally and internationally. The core functions of KenInvest include policy advocacy; investment promotion; investment facilitation which includes investor tracking and after care services.

  6. The Mining Act (2016) restricts foreign participation in the mining sector. Among other restrictions, it reserves the acquisition of mineral rights to Kenyan companies and requires 60% Kenyan ownership of mineral dealerships and artisanal mining companies.

  7. Kenya's export processing zones (EPZs) offer special incentives for firms operating within their boundaries. Businesses in EPZs must be export-focused and pay normal tariffs and duties on goods distributed to the domestic market. The majority of the exports are textiles, Kenya's third largest export area behind tea and horticulture. About 54% of EPZ products are exported to the United States under the AGOA. Indeed, 80% of Kenya's textiles and apparel originate from EPZ-based firms. Approximately 50% of all firms in the zones are fully owned by foreigners, mainly from India, while the rest are locally owned or joint ventures with foreigners.

  8. The not yet fully established SEZs are designed to boost local economies by offering benefits for goods that are consumed both internally and externally. The Second Medium-Term Plan of Kenya's Vision 2030 economic development agenda calls for establishing SEZs in Mombasa, Lamu, Kisumu, and eventually to additional towns throughout the country. A SEZ near Naivasha is also under consideration. The SEZs will allow for a wider range of commercial ventures, including primary activities, such as farming, fishing, and forestry, plus manufacturing, business process outsourcing and resources supporting science and technology.

  9. Qualifying investments exceeding USD2.2 million incurred outside Nairobi or the municipalities of Mombasa or Kisumu are allowed an investment deduction of 150%. All other qualifying investments are allowed a 100% investment deduction in the year the asset is put into use.

  10. Businesses operating in Kenya stand to benefit from a host of incentivising measures. The Kenyan government provides the right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity. In an effort to encourage foreign investment, Kenya repealed regulations in 2015 that imposed a 75% foreign ownership limitation for firms listed on the Nairobi Securities Exchange, allowing such firms now to be 100% foreign-owned.

Sources: WTO – Trade Policy Review, ITA, US Department of Commerce, Government websites, Fitch Solutions

Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive Programme Main Incentives Available
EPZs Businesses in EPZs must be export-focused but will benefit from:

- 10-year corporate tax holiday and a 25% tax thereafter

- 10-year withholding tax holiday and stamp duty exemption

- 10-year withholding tax exemption on dividends and remittances paid to non-residents

- 100% investment deduction on capital expenditure for 20 years

- Exemption from customs duties on imported inputs

- VAT exemption on industrial inputs

- Streamlined licensing procedures under EPZ Authority

- Expedited customs procedures

- 24-hour security
 SEZs (proposed) - Supplies of goods and services to companies and developers will be exempted from VAT

- The corporate tax rate for enterprises, developers and operators will be reduced from 30% to 10% for the first 10 years and 15% for the next 10 years

- Exemption from taxes and duties payable under the Customs and Excise Act (2014), the Income Tax Act (1974), the EAC Customs Management Act (2004) and stamp duty

- Exemption from advertisement and licence fees levied by county governments

Sources: US Department of Commerce, Government websites, Fitch Solutions

Taxation – 2019
  • Value Added Tax: 16%
  • Corporate Income Tax: 30%

Source: Kenya Revenue Authority

Important Updates to Taxation Information

The 2018 Finance Act simplied the computation of compensating tax by taxing any distribution of untaxed gains or profits by a company at the resident corporate tax rate of 30%. Under the new Finance Act, manufacturers are eligible for an additional 30% corporate tax deduction of the total incurred electricity bill. The Act also grants the authorities leeway to negotiate for special tax rates for businesses under a special operating framework agreement. These will come into effect on January 1, 2019.

Business Taxes

Type of Tax Tax Rate and Base
Corporate Income Tax rate for resident companies 30%
Corporate Income Tax rate for branches of foreign companies 37.5%
Capital Gains Tax 5% of the net gain
Withholding Taxes Dividends:

- 10% on dividends paid to non-residents

- 5% on dividends paid to residents or citizens of other states in the East African Community


- 10%


- 20% on royalties paid to non-residents

- 5% on royalties paid to residents
Value Added Tax - 16% on sale of goods and services

- Fuel has a VAT of 8% applied to it

Source: Kenya Revenue Authority

Date last reviewed: May 14, 2019

Foreign Worker Requirements

Localisation Requirements

Though there are no strict performance requirements (even in SEZs), labour regulations generally continue to restrict the employment of foreign nationals, particularly in low-skilled sectors, despite a large increase in the country's migrant population. The National Construction Authority Act (2011) imposes local content restrictions on foreign contractors, defined as companies incorporated outside Kenya or with more than 50% ownership by non-Kenyan citizens. The act requires foreign contractors to enter into subcontracts or joint ventures assuring that at least 30% of the contract work is done by local firms.

Obtaining Foreign Worker Permits

Work permits are required for all foreign nationals intending to work in Kenya. Recent policy changes also mandate assured income of at least USD24,000 annually for the issuance of a work permit. Firms in agriculture, mining, manufacturing, or consulting sectors can avoid this with a special permit. Work permits are classified in different categories that are in some cases further subdivided into subcategories. Work permit fees can cost up to USD3,000 and do not distinguish between foreigners and EAC citizens. However, Kenya and Rwanda have exempted EAC citizens from work permit fees. Although businesses may choose to transfer these costs to the employee, other permit costs are less avoidable.

Special Skills

The Kenyan government issues permits for key senior managers and personnel with special skills not available locally. Firms seeking to hire expatriates must demonstrate that the requisite skills are not available locally through an exhaustive search, although the Ministry of Labour plans to replace this requirement with an official inventory of skills that are not available in Kenya. A permit can cost up to KES200,000. Firms must also sign an agreement with the government describing training arrangements for phasing out the need for expatriates.

Sources: Government websites, Fitch Solutions


Sovereign Credit Ratings

Rating (Outlook) Rating Date
B2 (stable) 13/02/2018
Standard & Poor's B+ (stable) 19/11/2010
Fitch Ratings B+ (stable) 30/04/2018

Sources: Moody's, Standard & Poor's, Fitch Ratings

Competitiveness and Efficiency Indicators

World Ranking
2017 2018 2019
Ease of Doing Business Index
92/190 80/190 61/190
Ease of Paying Taxes Index
125/190 92/190 91/190
Logistics Performance Index
N/A 68/160 N/A
Corruption Perception Index
143/180 144/180 N/A
IMD World Competitiveness N/A N/A N/A

Sources: World Bank, IMD, Transparency International, Fitch Solutions

Fitch Solutions Risk Indices

World Ranking
2017 2018 2019
Economic Risk Index
N/A 99/202
Short-Term Economic Risk Score
42.3 49.8
Long-Term Economic Risk Score 49.5 52.3 52.3
Political Risk Index N/A 115/202 115/202
Short-Term Political Risk Score 45.4 52.9
Long-Term Political Risk Score 58.9 58.9
Operational Risk Index N/A 132/201 132/201
Operational Risk Score 39.9

Source: Fitch Solutions

Date last reviewed: May 14, 2019

Fitch Solutions Risk Summary


Kenya's relatively low economic risks are the result of large deficits in its current and fiscal accounts. However, the shilling is susceptible to periods of high volatility that can feed through into inflation and undermine investor sentiment. That said, Kenya dominates the EAC trade bloc and serves as the region's logistics hub, which will allow it to leverage the region's rising prospects in the coming years.


Kenya is set to consolidate its status as a key regional trade hub and will likely become an increasingly attractive location for investment in East Africa in the long term. The positive medium-to long-term outlook is supported by the government's commitment to implementing bureaucratic reforms and large-scale infrastructure development projects aimed at boosting regional integration and economic diversification. In addition, Kenya boasts a large and diverse labour pool and deeper financial markets than its regional peers. However, businesses operating in the country face uncompetitive operating costs globally due to unreliable utilities underscored by considerable infrastructure gaps.

Source: Fitch Solutions

Date last reviewed: May 14, 2019

Fitch Solutions Political and Economic Risk Indices

Graph: Kenya short term political risk index
Graph: Kenya short term political risk index
Graph: Kenya long term political risk index
Graph: Kenya long term political risk index
Graph: Kenya short term economic risk index
Graph: Kenya short term economic risk index
Graph: Kenya long term economic risk index
Graph: Kenya long term economic risk index

100 = Lowest risk, 0 = Highest risk

Source: Fitch Solutions Political and Economic Risk Indices

Date last reviewed: May 14, 2019

Fitch Solutions Operational Risk Index

Operational Risk Labour Market Risk Trade and Investment Risk Logistics Risk Crime and Security Risk
Kenya Score 41.9 44.7 45.1
52.0 25.8
East Africa Average 32.0 39.8 33.0 31.6 23.6
East Africa Position (out of 11) 2 2 2 1
SSA Average 34.5 38.2 34.5 33.3 32.0
SSA Position (out of 48) 9
9 9 4
Global Average 49.6 50.3 49.8
Global Position (out of 201) 132 133 122
82 172

100 = Lowest risk, 0 = Highest risk

Source: Fitch Solutions Operational Risk Index

Graph: Kenya vs global and regional averages
Graph: Kenya vs global and regional averages
Operational Risk Index
Labour Market Risk Index
Trade and Investment Risk Index Logistics Risk Index Crime and Security Risk Index
Rwanda 49.0 48.7 52.7 43.7 50.8
Kenya 41.9 44.7 45.1 52.0 25.8
Tanzania 36.5 42.2 37.0 33.4 33.5
Djibouti 35.4 38.5 42.8 28.5
Uganda 35.3 44.7 39.2 33.4 24.1
Ethiopia 34.5 42.4 30.5 36.7 28.6
Sudan 26.8 34.6 26.7 29.9 16.1
Burundi 26.7 37.4 25.6 25.2 18.4
Eritrea 24.6 33.2 15.5 30.3 19.4
Somalia 22.7 37.1
28.7 18.1 7.0
South Sudan 18.7 34.0 19.3 16.8 4.5
Regional Averages 32.0 39.8 33.0 31.6 23.6
Emerging Markets Averages 46.0 48.1 46.5 47.4 44.8
Global Markets Averages 49.7 50.3
49.8 49.0


100 = Lowest risk, 0 = Highest risk

Source: Fitch Solutions Operational Risk Index

Date last reviewed: May 14, 2019

Hong Kong Connection

Hong Kong’s Trade with Kenya

Graph: Major export commodities to Kenya (2018)
Graph: Major export commodities to Kenya (2018)
Graph: Major import commodities from Kenya (2018)
Graph: Major import commodities from Kenya (2018)

Note: Graph shows the main Hong Kong exports to/imports from Kenya (by consignment)

Date last reviewed: May 14, 2019

Graph: Merchandise exports to Kenya
Graph: Merchandise exports to Kenya
Graph: Merchandise imports from Kenya
Graph: Merchandise imports from Kenya

Note: Graph shows Hong Kong exports to/imports from Kenya (by consignment)

Exchange Rate HK$/US$, average

7.75 (2014)

7.75 (2015)

7.76 (2016)

7.79 (2017)

7.83 (2018)

Sources: Hong Kong Trade Statistics, Census & Statistics Department

Date last reviewed: May 14, 2019

Growth rate (%)
Number of Kenyan residents visiting Hong Kong 5,976 -13.0

Sources: Hong Kong Tourism Board, United Nations Department of Economic and Social Affairs – Population Division, Fitch Solutions

Growth rate (%)
Number of African residents visiting Hong Kong 142,513 -11.6

Sources: Hong Kong Tourism Board, United Nations Department of Economic and Social Affairs – Population Division, Fitch Solutions

Date last reviewed: May 14, 2019

Commercial Presence in Hong Kong

Growth rate (%)
Number of Kenyan companies in Hong Kong N/A

- Regional headquarters
- Regional offices
- Local offices

Treaties and Agreements between Hong Kong and Kenya

Hong Kong has concluded an air services income agreement with Kenya, that entered into force on April 28, 2005. Mainland China and Kenya have signed a bilateral investment treaty (BIT) but this has not yet entered into force.

Sources: Inland Revenue Department, Investment Policy Hub, OECD Tax Treaties, Fitch Solutions

Chamber of Commerce (or Related Organisations) in Hong Kong

Honorary Consulate of the Republic of Kenya in Hong Kong

Address: Flat 1201A, 12/F, Tower 1, Admiralty Centre, 18 Harcourt Road, Admiralty, Hong Kong


Tel: (852) 2520 5000

Fax: (852) 2520 1600

Source: Protocol Division Government Secretariat

11.5 Visa Requirements for Hong Kong Residents

A Kenya visa is required for Hong Kong residents.

Type of Visa:

e-Tourist visa 90 days, single entry

Business visa 90 days, single entry

Transit visa 72 hours, single entry

Source: eVisa

Date last reviewed: May 14, 2019


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