Kenya has a history of strong regional trade

The largest economy in the EAC, Kenya is a major player in both the region and sub-Saharan Africa as a whole. Over the past few decades its market has transformed from being largely agrarian into one of the most diversified and innovative on the continent, even developing a thriving technology sector that some have dubbed the Silicon Savannah. A new constitution that went into effect in 2010, following a national referendum, has had a tremendous impact on the country’s governance system, devolving a significant amount of power to counties, strengthening political accountability and improving the delivery of public services at the local level.

There are challenges, however. While Kenya’s fast-growing population is seen as a boon by many, the economy has struggled to create enough well-paying jobs to keep up with this growth. Poverty and inequality remain persistent, and recent security concerns – a spill-over from instability in neighbouring Somalia – have lowered tourism numbers, putting a considerable dent in foreign currency reserves. Yet while these issues are serious, Kenya has managed to avoid much of the turmoil that has hit other major African economies over the past two years, such as recessions, rising debt and slowdowns in growth. While uncertainty over the outcome of the general elections scheduled for August 2017 may temporarily dampen business confidence, the country has made significant progress and the outlook appears relatively positive.

Long History

While evidence suggests that humans lived in what is now known as Kenya as early as around 3m years ago, the first major wave of settlers were Cushitic-speaking peoples from the Horn of Africa in about 2000 BCE. By 1000 BCE this culture had spread into central Kenya and the area that is now Tanzania. Over the centuries, they were joined or displaced by others, most notably as part of the Bantu expansion starting in 1000 BCE, laying the groundwork for the rich linguistic and ethnic diversity of modern Kenya. The Bantu expansion was a millennia-long series of migrations by Bantu-speaking groups within sub-equatorial Africa.

In the first century CE Arab traders began to frequent the Kenyan coast, setting up commercial colonies and facilitating the integration of the area into a larger regional trading network. The Arab merchants were soon joined by Greek traders from Egypt, as well as Persians, southern Indians and Indonesians, which developed into city-states ruled by foreign powers. By the eighth century CE many of these original trading posts had developed into Bantu African, Arab and Persian city-states under Muslim rule. Swahili, which became the lingua franca for trade in the region, bears evidence of this diverse history to this day, as it evolved during this time from the mixing of Arabic words with the local Bantu language.

European Intervention

The Portuguese were the first Europeans to arrive in 1498 and set up a naval base and trading post in Mombasa, which became a crucial stop-over point between Europe and East Asia. Years of small-scale conflict between the Portuguese and Omanis led to the ultimate expulsion of the former from the Kenyan and Tanzanian coasts in the early 18th century. Then, in 1840 Omani Sultan Said bin Sultan moved his capital to Zanzibar, which led to the development of long-distance trade routes that reached into the interior; previously trade was largely limited to the coast.

While the Omanis remained the dominant power in the region for some time, they were eventually joined by the British, who were increasingly interested in the Kenyan coast due to its location on the route to India. British missionaries had been active in the interior since the mid-18th century. Growing competition with Germany for influence in Africa eventually led to the British setting up the East Africa Protectorate in 1895 and, eventually, a crown colony in 1920.

Post-Independence

The independence movement, which had started to coalesce around specific leaders and associations in the 1920s, really began to pick up steam after the Second World War. There was growing discontent with a representative system that privileged European settlers, and the primary player during this time was the Kenya African Union, an African nationalist organisation led by Jomo Kenyatta that demanded more equitable land ownership regulations. Following a half-hearted attempt by the British colonial government to improve the representation of native Africans, the Mau Mau uprising broke out in 1952 and lasted until 1960. It was a key turning point in the struggle, as the colonial government embarked upon a reform agenda in an effort to quell the rebellion. While the changes opened up the political system to non-Europeans somewhat, they still denied universal suffrage.

In 1960 British and Kenyan leaders met in London to create a roadmap for independence, which led to the establishment of the Kenya African National Union. This eventually resulted in full independence in 1963, with Kenyatta serving as the first president. Following Kenyatta’s death in 1978, Daniel Moi became president. His term was marked by political repression of opposition groups. However, international pressure in the 1990s led the government to repeal the one-party section of the constitution. Increasing opposition led to the 2002 election of Mwai Kibaki, who was in office until 2013 and oversaw a period of rapid economic growth.

Geography

With a total area of approximately 582,000 sq km, of which 11,227 sq km is water, Kenya borders South Sudan, Somalia and Ethiopia to the north, Uganda to the west and Tanzania to the south. To the east it has a 536-km coastline on the Indian Ocean. From the white sand beaches of the coast, low plains rise to the mountainous central highlands, which are bisected by the East African Rift, the defining topographical feature of the country. The valley was created by a divergent tectonic plate boundary, where the African plate is in the process of splitting into the Nubian and Somali plates. It is also an area of active and non-active volcanoes, and a chain of lakes, including Lake Turkana, which is 290 km long and Africa’s fourth-largest lake. The East African Rift also contains the second-highest mountain on the continent, Mount Kenya, which stands 5199 metres above sea level. To the west of the valley a fertile plateau extends to the Ugandan border.

Climate

The country’s climate varies from tropical along the coast to more arid in the interior. Daytime temperatures average between 20°C and 28°C, although it can be warmer and more humid along the coast. Altitude also plays a major role, as temperatures drop by about 6°C for every 1000 metres in elevation. There is a dry and wet season, with the former lasting from June to October and the latter from October to June. The “short rains” season, a period of brief, unpredictable showers, lasts from October to December, while a “long rains” season characterised by daily downpours, occurs from March to June. The further inland, the drier Kenya becomes.

Natural Resources

The country boasts an abundance of natural resources, including limestone, gypsum, soda ash, salt, gemstones, fluorspar, zinc and diatomite. After oil was discovered in 2012 in blocks of the Lokichar Basin, further discoveries have been made in the region, creating a buzz in the energy industry. While the basin’s crude oil reserves, estimated to be more than 1bn barrels, are comparatively small, successful exploitation would be a boon for public finances, given the amount spent on energy imports each year. While first production is expected to start in 2017, the find will not be fully commercially viable until it can be linked to an export facility on the coast. To this end, the government has planned an 865-km pipeline for both domestic and Ugandan crude to reach ports on the Indian Ocean, and for which construction is slated to begin in 2018. However, uncertainty over its route and financing, with a competing pipeline now under discussion in Tanzania, may delay the start date (see Energy chapter).

Health & Education

Life expectancy is currently only 62 years, which is 169th globally, but it is rising, according to World Bank figures. HIV/AIDS remains an issue with an adult prevalence rate of 5.9%, the 11th-highest rate in the world, and 1.5m Kenyans currently living with the disease (see Health chapter). Despite remaining an overwhelmingly rural country – more than half of the population works at least part-time in the agriculture sector – an increasing number of people are moving to cities and a quarter of the population already lives in urban areas, according to World Bank figures. Nairobi has a population of more than 4.2m, and Mombasa has more than 1.2m residents. Literacy is high relative to other countries on the continent, but there is room for considerable improvement, especially with respect to women, as only 75% of women are able to read, compared to 81% of men (see Education chapter).

Population

With approximately 44.2m inhabitants and an annual growth rate of 2.6%, Kenya is the seventh-most populated country in Africa. Demographically, it is also very young. The average age is around 18 years and more than 50% of the population is under 25. While this currently places a heavy burden on older generations – the dependency ratio is around 75% among youth – the situation should begin to change as younger generations make the transition into adulthood. And, if the economy is able to create enough jobs to absorb these new workers, Kenya will likely see significant economic benefits from this demographic dividend for decades to come.

Language & Religion

The country is home to a variety of languages, ethnicities and belief systems. The two official languages are Swahili and English, although the country is home to as many as 60 other indigenous languages. English is widely spoken and is predominant in matters of state and governance, as well as being the primary language in both the education system and business community. Ethnically the population is incredibly diverse and includes groups such as the Kikuyu, Luhya, Luo, Kalenjin, Kamba, Kisi and Meru, among a number of other ethnic groups. Due to the country’s long history as a centre for regional and international trade routes, it is also home to several non-African groups as well, such as Indians, Europeans and Arabs.

Christianity is the dominant religion in Kenya, accounting for 83% of the population, with Protestants making up 47.7%, followed by Catholics and other Christian denominations. Muslims, most of whom live near the coast or in Nairobi, also make up a sizable portion of the population at 11.2%. Traditional indigenous beliefs account for another 1.7% of the population, and there is also a sizable Hindu presence due to the country’s Indian community.