Kenya has a domestic market of over 50 million people and is the fourth largest economy in sub-Saharan Africa. The top reasons U.S. companies should consider doing business in Kenya include: 1) it is the gateway to the East African market and is the economic, commercial, ICT, financial, and logistics hub of the region; 2) has a young, educated, entrepreneurial, and  English-speaking population possessing high fluency in technology; 3) has an abundant supply of renewable energy (more than 90% of Kenya’s on-grid electricity mix comes from renewable sources); and 4) enjoys a strong bilateral relationship with the United States, including a Strategic Trade and Investment Partnership under negotiation.

In 2023, the total value of U.S. exports to Kenya stood at $493.5 million (Global Trade Atlas). The key U.S. exports were concentrated in petroleum products ($107 million), chemicals ($57 million), and aerospace and related parts ($63 million). The United States is Kenya’s fifth-largest single export market, accounting for 6% of Kenya’s exports.  In 2023, imports from Kenya to the United States amounted to $895 million consisting mainly of apparel ($472 million), pharmaceuticals ($200 million), and fruits and tree nuts ($92 million) (Congressional Research Service).

Kenya has the strongest industrial base in the East Africa region and has been successful in attracting U.S. exporters and investors, with many companies establishing local and regional operations to take advantage of Kenya’s strategic location, diversified economy, highly-skilled and productive workforce, well connected intermodal logistics routes, well-developed banking, insurance, legal, and consultancy services, and vibrant entrepreneurial and start up ecosystem.

Kenya has built strong bilateral and multilateral trade relationships and is a member of the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), and the Africa Continental Free Trade Area (AfCFTA). In July 2022, the United States and Kenya announced their intention to negotiate a Strategic Trade and Investment Partnership (STIP) and are hoping to complete negotiations by the end of 2024.  The STIP identifies ten areas for the development of high standard commitments. The objectives of STIP include increasing investment; promoting sustainable and inclusive economic growth; benefiting workers, consumers, and businesses (including micro-, small-, and medium-sized enterprises); and supporting African regional economic integration.

According to the International Monetary Fund and the Kenya National Treasury, Kenya’s GDP is projected to grow by 5.3 and 5.5% respectively in 2024, driven by growth in the services sector and household consumption.

President William Ruto centers the Government of Kenya’s (GoK) economic priorities on a Bottom-up Economic Transformation Agenda (BETA), which is anchored on the following core pillars:

• Agricultural Transformation and Inclusive Growth,
• Transforming the Micro, Small and Medium Enterprises,
• Affordable Housing and Settlement,
• Universal Healthcare, and
• Digital Superhighway and Creative Industry.

Over the years, Kenya has attracted foreign direct investment (FDI), in the agriculture, finance and insurance, renewable energy, manufacturing, information and communication, and education sectors, though its FDI rates per capita lag behind most of its neighbors. U.S. FDI to Kenya was valued at $277 million in 2022. While venture capital inflows decreased by 35% globally in 2022 in Kenya, it increased by 33%in 2023, one of the highest growth rates on the continent.  Additionally, in 2023 Kenya raised $720 million from debt and equity – more than any other African nation, according to global tech investment firm Partech’s 2023 Africa Tech Venture Capital report. 

There are a variety of private-equity and development finance institutions (DFIs) present in Kenya, including multilateral institutions, such as the International Finance Corporation (IFC), the African Development Bank, and bilateral DFIs, including the U.S. Development Finance Corporation (DFC).

Agriculture remains the backbone of Kenya’s economy and central to Kenya’s development strategy. According to the UN Food and Agriculture Organization (FAO), the sector remained dominant, accounting for approximately 33% of the gross domestic product (GDP) and another 27 % indirectly through linkages with other sectors The sector, however, stagnated in recent years due to continued drought that severely affected agricultural productivity. Additional constraints include the high cost of inputs and the transformation of agricultural land for real estate use to cater for the significantly growing population.

According to the FAO, agriculture accounts for 65% of Kenya’s export earnings. It is the largest employer in Kenya, with more than 40% of the total population (and more than 70% of Kenya’s rural population) earning at least part of their income from the sector. Agriculture in Kenya is large and complex, with a multitude of public, parastatal, non-governmental, and private players.

Despite Kenya being the most industrially developed country in East Africa, the manufacturing sector accounted for only 7.8% of its GDP in 2022 (KNBS Economic Survey 2023). The key sub sectors that registered major growth in volume of output in 2022 were: motor vehicles, trailers, and semi-trailers; processing and preservation of fish; and basic metal products. The industrial sector accounts for 11.7 % of formal employment in the country.

The construction and real estate sector registered growth of 4.1% in 2022 compared to 6.7 % in 2021. This decline is attributed to lower public infrastructure investment within the period. To meet long term population growth needs, the GoK plans to heavily invest in public infrastructure development projects (roads, railways, energy production, ports, and airport modernization) and affordable public housing projects.  However, the need for fiscal restraint given high public debt levels is expected to constrain public infrastructure investment in the medium-term and slow down the construction industry.

ICT remains one of the fastest-growing sectors, with internet penetration at 85.2 % (Internet World Stats). The GoK-approved goal of universal 4G coverage, digitalization of government services, and the growth in smartphone usage is spurring growth in e-commerce and other digital services.

The healthcare sector remains a priority for the GoK and holds opportunities for US companies.  Over the past twenty years, the sector grew exponentially, and Kenya became a regional hub for critical medical care. Due to this growth, Kenyans added an astounding 15 years to their average life expectancy - from 48 to 63 years. This is the result of years of public and private investment in the healthcare system. According to Numbeo-2023, the Kenyan healthcare system ranked second best in Africa (after South Africa) on readiness to offer quality medical services through modern diagnosis and treatment as well as skilled and competent medical professionals. Many private healthcare, insurance, and pharmaceutical players choose Kenya as a regional hub for their operations.

Thanks to Kenya’s growing middle class and regional hub status for multinational companies and UN and humanitarian organizations, the demand for quality healthcare by citizens and the large expatriate community is likely to continue to grow.

The tourism sector in Kenya is one of the most diverse and vibrant in East Africa, with increased investments in conference, eco-tourism, and leisure tourism. In 2022, the sector rebounded from the COVID-19 slump, with international arrivals increasing by 76.9 % from the previous year (KNBS Economic Survey 2022).

Political Environment

For background information on the political and economic environment of the country, please visit the U.S. Department of State here.