The CEO ofKenya’s Private Sector Alliance speaks to FORBES AFRICA about the country’s growth prospects on the back of its 60 years of independence celebrations.
Kenya is, arguably, East Africa’s most robust economy, with the country putting in the yards to better itself in several sectors. With 2023 marking a watershed moment for the country, it celebrated key achievements over the past 60 years as well as its impact on business in Africa through the creation of opportunities for investment.
“Kenya has a diverse and resilient economy, with sectors such as agriculture, manufacturing, services, tourism, and energy offering opportunities for investment,” says KEPSA CEO, Carole Kariuki.
She adds that a systematic urge to position the country as a key investment hub is paying off.
“Some of the opportunities for investments in Kenya include being the leading producer and exporter of agricultural products such as tea, coffee, flowers, fruits and vegetables. There is potential for value addition, agro-processing, irrigation, and mechanization in the sector.”
Kenya is one of the fastest growing economies in Africa, with an average annual growth rate of 4.8% between 2015 and 2019 and an expected 5% growth in 2023. The country has reduced poverty from 36.5% in 2005 to 27.2% in 2019 and has improved its global ranking in the World Bank’s Ease of Doing Business index from 136th in 2015 to 56th in 2020.
As a leader in innovation and technology in on the continent, with a vibrant startup ecosystem and a strong digital infrastructure, Kenya is home to some of the most successful African tech companies, such as Safaricom, M-PESA and BRCK, among others.
However, there are challenges. High power costs have not been good for the economy and the country witnessed the exit of a large number of companies in December due to high operational expenses.
“Manufacturing has a well-developed industrial base that Kenya boasts of. The sector produces a variety of goods such as textiles, leather, food and beverages, chemicals, pharmaceuticals, plastics, and metal products. The government has identified manufacturing as one of the key pillars of its Bottom-up Economic Transformation Agenda,” admits Kariuki.
Despite the nation’s ambitious plans to increase the sector’s contribution to GDP, some heavy-lifting is necessary to tackle the high-power costs. Going into the next 10 years of growth, Kariuki says accelerated economic growth will be driven by increased investment in trade, transport, communication and innovation.
“The country has a well-developed infrastructure network, a skilled labor force, and a conducive regulatory framework for doing business. Kenya is well-positioned for take-off in the next decade, as it has many strengths and opportunities to leverage,” she says.
With a median age of almost 20 years, and a literacy rate of 81.5%, as reported in 2018, the country has all the necessary ingredients to chart out a new and prosperous future. But despite Kenya being a regional hub, weak governance could dampen the country’s prospects.
“My administration will be stepping up the war on graft. Any public servant found to be engaging in corruption will be subjected to face the full wrath of the law,” said President William Ruto, when the nation marked its Mashujaa Day celebrations in October last year.
Kenya has primed itself as a gateway to the East African trade corridor, a bloc that boasts a market of over 300 million people (about a quarter of Africa’s population) and a reported combined GDP of $305.3 billion.
According to Kariuki, the roll-out of the African Continental Free Trade Area (AfCFTA) provides preferential access for Kenyan products and services to these markets.
“A visionary and ambitious development agenda that aims to transform Kenya into a middle-income country by 2030 needs a renewed focus on delivering food security, affordable housing, universal health coverage, manufacturing, and SME development. That require[s] massive investment outlays and will put Kenya on the pedestal for industrialization,” she says.
Having being at the helm of KEPSA for a decade and counting, Kariuki believes that with democracy being the cradle of hope for a better Kenya, the private sector must also be an active player in the country.
“KEPSA continues to play an important role in achieving a better and prosperous Kenya by representing the voice of the private sector in Kenya and engaging with the government, development partners, and other stakeholders on cross-cutting policy issues and programs for social and economic development of the country.”
Kenya has transformed from a lacking and divided colony to a stable and prosperous nation with a vibrant democracy, a diversified economy, and a leading role in regional and global affairs.