Kenya - Economic development





Kenya Economic Development 1847
Photo by: ashbringer

Central to Kenyan government planning is a continuing expansion of the level of exports and diversification of products. Moreover, Kenya has sought the orderly introduction of large numbers of African farmers into former European agricultural areas. With the goal of full economic independence, the government continues to pursue Africanization of the private sector, particularly in commerce.

Kenya continues to assist private industry by tariff structures that permit the import of raw materials duty-free or at low rates; allow rebates or suspension of customs duties under certain conditions; and establish protective customs barriers. The 1979-83 development plan, Kenya's fourth, had as its main objective the alleviation of rural poverty. The 1984–88 development plan also emphasized the rural sector in calling for an annual real GDP growth of 4.9%.

Kenya has long depended on external assistance for development financing, but the extent of that dependence has varied with domestic conditions. Whereas in the mid-1960s Kenya depended on external sources for 82% of its total development resources, by the early 1970s the proportion had fallen to only 45%. The late 1970s and 1980s brought renewed reliance on external loans, as the proportion of foreign financing needed to cover the annual government budget deficit rose from 28% in 1978–79 to 67% in 1981–82 and an estimated 89% in 1985–86.

Development in Kenya now depends on the private sector and on foreign and domestic investment as the parastatal sector is dismantled. Foreign exchange earnings were key to the sixth development plan (1989–93). Because of government mismanagement of funds during the period between 1996 and 1999, most development agencies (including the IMF and World Bank) refused to extend loans and gave up on structural reform programs. The government initiated its own Economic Recovery Strategy in 1999, to increase public sector management reliability, but there were doubts as to the effectiveness of the plan.

In 2000, the IMF renewed lending, in the amount of a three-year $193 million Poverty Reduction and Growth Facility (PRGF) Arrangement, which was further augmented due to the impact of severe drought conditions. An anti-corruption authority set up by the government was declared unconstitutional in December 2000, and other Kenyan reforms stalled. The IMF and World Bank once again suspended their programs. In July 2003, the IMF indicated it would resume lending to Kenya, as the Fund was encouraged by the country's efforts to fight corruption and promote good governance.

User Contributions:

Mercy Kinoti
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Apr 24, 2007 @ 12:00 am
I think the main contributor to the economic development in Kenya is the informal sector. Research has shown that in 2005 this sector employed over 4.1 million people and it contributed to more than 18% of the country's G.D.P.
Priscilla
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Sep 13, 2007 @ 3:03 am
Kenya's economic development is mainly influenced by state capacity.Also women contribute largely to economic growth.
Kateiya
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Dec 21, 2009 @ 2:02 am
Kenya's economic development is by and large a product of political practice. If the political class come into a common agreement on economic issues, a relief on domestic conditions would be felt and a better market climate too. Because I believe we have enough man power to steer our economy in a safer direction with the help of international standpoints of developmental procedures.
Robert
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Dec 30, 2009 @ 4:04 am
Kenya economy greatly depend on agricultural production,to be able to ensure sustained growth and improved living standard the government must break the bottle neck by promoting agricultural production.
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Aug 19, 2010 @ 4:04 am
Kenya's development is maily influenced by the foreign exchange that is mainly brought about by tourists.The government is supposed to make sure that poachers are delt with harshly because they make the economy decline.
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Feb 9, 2011 @ 12:12 pm
why not education? it enables a country to have informed citizens, customers, investors and goog neighbours.
Edwin
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Jul 15, 2011 @ 7:07 am
The Economy of Kenya highly depend of Agriculture, not yet into the industrial age but luckily Kenya has embraced ICT and therefore will move directly from agricultural economy to information age.
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Jul 22, 2011 @ 9:09 am
I belive our kenyan Economy can reach greater heights because we have all that is required to spearhead the journey be it manpower, energy natural resources and good weather all we need to do is pull strings together and work as one, the govt should work hand in hand with the private sector and politicians should man up. God bless kenya
JERRY
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Jan 17, 2012 @ 8:08 am
I think that the Kenyan economy is dependent on agriculture and tourism. what the government needs to do is to invest in infrastructure to fast track investments in the two sectors. we should consider public private partnerships in capital investments which will in turn lead to faster economic growth. These require an overhaul in the economic policy at the macro level and this should be done in a more consultative and participatory manner.
abedy
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May 13, 2012 @ 8:08 am
kenya has gone to greater height as far as economic development is concerned,for instance we have build high ways which will see us do our daily activities fast and efficient.
liwam
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Jul 17, 2012 @ 2:02 am
I think economic development in Kenya is brought by good road construction because if the roads are bad then we would never have means of transport that would enable us have the right market en exchange of goods. means of transport is important in our economic growth
godfrey
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Oct 17, 2012 @ 6:06 am
What is KREP as best known to you in Kenya and how can you advise Uganda in order to uplift her standerds?
Jackton
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Nov 17, 2012 @ 11:23 pm
As an economist, I feel that Kenyan agricultural development need a better facelift from the government. Recent political environment has been mostly destabilizing especially the rural peasant farmers in the rift valley after the post election violence.Only good governance government can promote better agricultural development and hence better economic growth
Eunice
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Feb 15, 2013 @ 12:00 am
For all the above to happen and come true we need peace and togetherness.Thats what will make kenyan economy grow with a high percentage and much better than it is.

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