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Agriculture is Kenya’s largest economic sector, and held its position as a major growth driver in 2015, with ideal weather conditions improving food security and cash crop export earnings. Despite economic uncertainty, the sector has been one of the most resilient in Kenya, with ongoing efforts to improve irrigation and bolster foreign investment, even as stakeholders continue to grapple with limited mechanisation and irrigation, spending cuts and insufficient value-added. Reducing reliance on rain-fed agriculture will be a critical priority for stakeholders as they seek to maintain the sector’s momentum in 2017. Despite domestic policy and labour challenges, Kenyan agriculture remains on track to continue driving national economic growth in 2017. Although production remains dependent on weather conditions, long-term strategies aimed at bolstering mechanisation and reducing rain-fed production should see the sector remain a growth driver for several years. This chapter contains an interview with Peter Kimanga, Director, Gold Crown Beverages.

Transport and logistics are at the core of Kenya’s economic narrative due to the country’s role as a trans-shipment hub for goods moving on to landlocked countries in East and Central Africa. The Port of Mombasa is a crucial landing point for goods, and links to the Northern Corridor that runs west across the country to the neighbouring markets of Uganda, Rwanda, Burundi and the Democratic Republic of Congo. Serving the region means maintaining sufficient transport and logistics capacity for now and for the future, meaning that the government is expending significant capital on transport networks, often in collaboration with private investors. The transport sector is a core part of Kenya’s economic strategy. The Standard-Gauge Railway project, efficiency upgrades at the Port of Mombasa and enhancement of other ports and transit corridors are central to the effort to compete with neighbouring countries’ projects. Being at the developmental forefront of transport infrastructure will help Kenya recapture some lost revenue and maintain its leading transit role in the region. This chapter contains an interview with Frank Matsaert, CEO, TradeMark East Africa.

As with most African markets, Kenya’s power sector is defined by a two-track approach, with an eye to boosting generation and improving access. The reasoning behind the latter is clear; electrification rates in the country are low even by continental standards, and this is exacerbated by the modest urbanisation rate. As for the former, in contrast to much of the rest of the continent, Kenya currently has ample supply to meet demand, but has nonetheless set a series of targets to boost generation based on projections of increasing consumption on the back of rapid GDP growth and large public works projects. The government hopes to increase power supply dramatically over the next 12 years, with a large share coming from renewable sources. The future is also likely to involve a refocusing from building capacity to addressing cost and reliability. This chapter contains interviews with Mugo Kibati, Chairman, Lake Turkana Wind Power.

With commercial-scale resource discoveries in Kenya in recent years – of both oil and solid minerals – the country’s energy and mining sectors are expanding. Kenya is now poised to join the ranks of commodity exporters, which is a significant reversal from the country’s historic dependency on imports. Authorities are currently overhauling related regulatory frameworks and working on large-scale infrastructure projects to help solicit investment in upstream extractive industries, with an eye to boost both exports and domestic sales. The need for new infrastructure is largely based on the expectation that Kenyans – and East Africans overall – will trade up from burning biomass to consuming modern fuels as disposable incomes rise across the board. Demand could be met with local oil if the state elects to rehabilitate its old refinery or build a new one, or Kenya could equally choose to export its crude oil and import finished products. For now, however, the government is primarily focused on upstream production and improving its regional distribution capacity. This chapter contains interviews with Dan Kazungu, Cabinet Secretary, Ministry of Mining; and John Ngumi, Chairman, Kenya Pipeline Company.

Under the auspices of the overarching Vision 2030 economic development plan, industrialisation remains a top priority for the Kenyan government, with the sector recording steady growth in 2015 against a backdrop of falling energy and input prices, lending an optimistic outlook for 2017 and beyond. Industrial stakeholders continue to face hurdles, however, and manufacturing’s contribution to GDP has not kept pace with broader macroeconomic growth. Low-cost imports across nearly all segments of the sector have had a negative impact on many local producers, while overlapping and unclear regulatory frameworks have created uncertainty about the role of the country’s export processing zones against a backdrop of planned new special economic zones. Although rising imports, shilling depreciation and unclear legal reforms will continue to challenge Kenyan industrial producers, the sector’s growth outlook for 2017 is positive. The retail sector in Kenya is benefitting from rising middle-class purchasing power, robust macroeconomic growth and a surge of investment in high-end formal retail space, with a host of foreign retailers, brands and producers entering the market. Although well-entrenched local players remain dominant in the supermarket segment, the entrance of France’s Carrefour in 2016 marked an increase in competition between local and foreign outlets for new market share. Kenya’s retail market is expected to record a positive performance in 2017, driven by population growth, positive economic metrics and heightened marketing activities. With urbanisation indicating strong potential for expansion into smaller cities and formal retail space in Nairobi approaching saturation, retailers will be looking to reorganise value chains. This chapter contains interviews with Chris Kirubi, Chairman, Haco Tiger Brands; and Phyllis Wakiaga, CEO, Kenya Association of Manufacturers.

In 2016 Kenya was ranked as one of Africa’s most mature insurance markets, with growth forecast at 6% a year, according to EY. While this is slower than some other large African markets, annual premium income was still expected to increase significantly, from $1.8bn in 2014 to $2.2bn by 2018, driven by urbanisation and a strong economy. Though the potential for growth is strong, the market has encountered some problems common to insurance sectors in the emerging world. The sector saw lacklustre performance in 2015 and 2016, which was the result of slow growth amid issues with fraudulent claims, particularly in the medical and motor segments. Insurers are also struggling to expand coverage among a large informal economy and income-sensitive population. However, with a wide array of innovative, local insurance market leaders, the Kenyan insurance landscape has the potential for a sizable expansion of domestic market penetration. The country also presents a solid base for reaching other African markets, which bodes well for drawing further interest from investors. This chapter contains an interview with Benson Waregi, Group Managing Director, Britam Insurance.