The economy of Kenya was dominated by agriculture and the barter of goods in the early years following the country's independence. The Kenyan government had promoted intensive economic growth through public investments, smallholder agricultural production, and private industrial investment. Agricultural exports from Kenya, largely tea and coffee, yielded high income from foreign exchange. There was also a high percentage of growth in the country's GDP. Despite government initiatives to promote growth, the economy of Kenya today still faces the problems of poverty and unemployment. Trade imbalances and rising population further enhances the challenges of the Kenyan economy.
Major Economic Sectors
The major sectors of Kenya's economy are agriculture, industries and services. Though agriculture formed the basis of the economy of Kenya in the early years of independence, today this sector accounts for a very small percentage of the country's GDP. The services sector contributes the highest percentage to the country's total GDP followed by the industrial sector.
In 2004, the agricultural sector accounted for only 16.3% of the country's GDP which was the lowest in comparison to the other sectors. Agriculture forms the basis of the country's economy and employs over 80 % of the population. According to the 2003 census, the agricultural sector had employed 75% of Kenya's total workforce.
Over 50 percent of export revenues can be attributed to agricultural products. The major export commodities are tea, coffee, tobacco, cotton, sisal, pyrethrum, sisal, and cashew nuts. The chief food crops in Kenya are beans, potatoes, cassava, maize, sorghum, and fruits.
The key industries of Kenya are small-scale consumer goods like furniture, batteries, textiles, plastic, soap, cigarettes, flour, oil refining, cement and tourism.
Majority of the manufacturing work in the industrial sector in Kenya concern processing of agricultural products. Manufacture of petroleum products in Kenya is done at refineries on the coast which are owned by the government.
In Kenya, the main industrial centers are located in the cities of Mombasa and Nairobi. In 2004, the industrial sector accounted for 18.8% of the country's GDP.
The tourism industry in Kenya is the single largest export earner and forms an important basis of the country's economy. The tourism potential in Kenya has been maximized through meticulous planning and proactive leadership. The tourism industry in Kenya has come a long way as an important revenue generator.
The services sector is the highest contributor in the country's GDP. In 2004, the services sector had accounted for 65% of the total GDP of Kenya which is way ahead of the agricultural as well as the industrial sectors.
This article provides an overview of the economy of Kenya. For more on Kenya, visit- 123independenceday.com