Kenya’s many peoples are well known to outsiders, largely because of the British colonial administration’s openness to study. Anthropologists and other social scientists have documented for generations the lives of the Maasai, Luhya, Luo, Kalenjin, and Kikuyu peoples, to name only some of the groups. Adding to the country’s ethnic diversity are European and Asian immigrants from many nations. Kenyans proudly embrace their individual cultures and traditions, yet they are also cognizant of the importance of national solidarity; a motto of “Harambee” (Swahili: “Pulling together”) has been stressed by Kenya’s government since independence.
Kenya’s economy is estimated to have expanded by 5.8% in 2018 compared to a growth of 4.9% in 2017. The slowdown in the performance of the economy in 2017 was partly attributable to a prolonged electioneering period coupled with adverse effects of weather conditions. The global economic recovery experienced in 2018 is expected to continue in 2019, with the World Bank forecasting a further expansion of 5.8% in 2019.
The projected growth in 2019 is based on Kenya’s macroeconomic performance, which has remained broadly stable with overall inflation within target, short-term interest rates remaining low and stable, as well as a stable exchange rate of the Kenya shilling to other currencies.
However, the downside risk to global growth has risen due to elevated policy uncertainty following the recently announced trade measures in the United States on imports from China, suppressed activities in the Euro Area and United Kingdom in early 2018, tighter financial conditions, and high oil import bill among emerging markets and developing economies. Despite the global challenges, growth in sub-Saharan Africa is on the rise due to higher commodity prices and improved capital markets access, with growth expected to accelerate to 3.8% in 2019, up from an estimated 3.1% in 2018.
Foreign Direct Investment
Kenya's Foreign Direct Investment (FDI) increased by 671.5 USD mn in Dec 2017, compared with an increase of 393.4 USD mn in the previous year. Kenya's Foreign Direct Investment: USD mn net flows data is updated yearly, available from Dec 1970 to Dec 2017. The data reached an all-time high of 1.5 USD bn in Dec 2009 and a record low of 0.4 USD mn in Dec 1988. CEIC converts annual Foreign Direct Investment into USD. The Kenya National Bureau of Statistics provides Foreign Direct Investment in local currency based on BPM6. The Central Bank of Kenya average market exchange rate is used for currency conversions. Foreign Direct Investment prior to 2009 is based on BPM5 and prior to 1996 is sourced from World Bank.
In the latest reports of Kenya, Current Account recorded a deficit of 317.4 USD mn in Mar 2018. Kenya's Direct Investment Abroad expanded by 257.1 USD mn in Dec 2017. Its Foreign Portfolio Investment fell by 109.8 USD mn in Dec 2017. The country's Nominal GDP was reported at 23.0 USD bn in Jun 2018.
Strong GDP growth has been accompanied by increasing FDI. In 2013, there were more than USD 500 million in FDI inflows (see Figure 3).10 Despite these robust absolute FDI inflows, a strong local economy means that Kenya has the second lowest FDI as a percentage of GDP of any country in the region.
The single largest source of FDI remains the United Kingdom, of which Kenya was formerly a colony. Together with Mauritius and the Netherlands, these three countries originate more than 50% of all Kenyan FDI inflows, predominately through equity vehicles.
Strong FDI inflows are also expected in the future, given recent oil discoveries near Lake Turkana and continuing plans to develop the Lamu corridor pipeline and port.
UNDP Kenya has a strong relationship with the Government of Kenya and is fully committed to further strengthening this partnership. The overall focus of UNDP in Kenya is to support the Government of Kenya to promote enhanced opportunities, empowerment, security (HIV/AIDS, natural and man-made disasters), sustainability and strategic outreach, all of women hich are detailed in the Country Programme Action Plan (CPAP) for the years 2009 to 2013 as outlined in the United Nations Development Assistance Framework (UNDAF) for Kenya.