Successfully investing in Kenya

PrintMailRate-it

last updated on 27 May 2020 | reading time approx. 2 minutes

 

 

 

How do you assess the current economic situation in Kenya?

At the start of the year, Kenya’s economy was forecast to grow at 6.2 per cent, up from 5.7 percent in 2019. The current forecast, on account of Covid-19, is in the 3.4 per cent region, the lowest since the 2008 global financial crisis. The still positive economic growth is attributable to anticipated growth in agriculture, as well as MSME growth on account of greater access to credit following a lifting of interest rate capping on lending by banks in late 2019.
 

How would you describe the investment climate in Kenya? Which sectors offer the largest potential?

Kenya’s economy remains the largest in the Eastern Africa region, and as such presents a natural economic hub for German companies wishing to invest in and tap into the region or wishing to have pan-African operations.

 

The Kenyan government’s “Big Four” agenda still remains a key driver for investment into four sectors: health, housing, agriculture, and manufacturing. As such, these sectors of the economy provide the greatest potential for investments in Kenya. Agriculture, which contributes over 50 per cent to the country’s GDP, may suffer in the medium term due to great locust infestation in parts of the country, though long term impact of this on the economy is not likely to be signficant. As such, investments in this sector, particularly those that will improve food security and climate resilience (as opposed to current rain-dependent and subsistence agriculture) as well as value-addition have great potential.

 

What challenges do German companies face during their business ventures into Kenya?

German companies face the following challenges: 

  • inadequate transparency in regulations (including processes and procedures) covering various aspects of business such as importation and licensing,
  • declining demand for products and services,
  • lack of access to financing and
  • the Government’s reluctance to stem corruption.
     

What is Kenya's current position in the information technology and telecommunications sector?

As mapped out in Kenya’s Digital Economy Blueprint, Kenya is recognized as a leader in driving financial inclusion by using widely available digital solutions and platforms (such as using USSD platforms), spurring business and providing an opportunity to leapfrog economic growth. Several government services are accessible using digital platforms, and there is government commitment to both provide digital infrastructure (connectivity, energy, data centers) and to enable private investment into the sector through legislation and policies (policies on data centers, cybersecurity, data protection and “invisible mile” connectivity).

 
The information and communication technology (ICT) sector is currently heavily service-focused, different from many developed countries where ICT is used as an enabler additionally for manufacturing and production activities.

 

How do you think Kenya will develop?

Overall, even with the huge impact of Covid-19, Kenya’s economic outlook is still positive with anticipated percentage growth in the region of 3 per cent in 2020, on the back of a resilient private sector amidst a particularly tough economic climate. Though foreign investor confidence has declined marginally in the past few years – particularly owing to perceived lack of goodwill to address corruption – in favor of neighbours Ethiopia and Rwanda, Kenya nevertheless offers a stable business environment for companies looking to do business in the Eastern Africa region, has the most skilled workforce in the region and has established bodies and governance structure to uphold the rule of law.

 Cultural characteristics

Contact

Contact Person Picture

Dr. José A. Campos Nave

Managing Partner

+49 6196 7611 4702
+49 6196 7611 4704

Send inquiry

Contact Person Picture

George Maina

Associate Partner

+254 71 1224 951

Send inquiry

 How we can help

 Publication

 Further Information

​Successfully investing in  Ethiopia, Nigeria and South Africa

 Article series

We use cookies to personalise the website and offer you the greatest added value. They are, among other purposes, used to analyse visitor usage in order to improve the website for you. By using this website, you agree to their use. Further information can be found in our data privacy statement.
Deutschland Weltweit Search Menu