The Structure of the Economy in Kenya is very essential for investors, businesses men and the general public at large. It helps analyze how the country is developing and the way forward. It also helps the government and economic analysts to understand on the areas to correct for future development of the country.
Aspects that Affect the Structure of the Economy in Kenya
There are various aspects that affect the Structure of the Economy in Kenya. They include;
Agriculture as one of the Aspects that Affect Structure of the Economy in Kenya
Agriculture is one of the Aspects that Affect Structure of the Economy in Kenya. Agriculture accounts for about 24 per cent of the Gross Domestic Product and continues to dominate the Kenyan economy. The country has varied ecological zones; a wide range of crops are cultivated and livestock reared. Traditionally, the biggest foreign exchange earners have been tea and coffee, but tourism and horticulture are becoming increasingly important. Consignments of fresh vegetables, fruits and cut flowers are air freighted daily to various destinations around the world.
Manufacturing is also one of the aspects that affect Structure of the Economy in Kenya. Kenya’s industrial sector has grown substantially over the years and contributed about 13 per cent of the Gross Domestic Product as at the year 2003. The manufacturing sector is composed of medium and large-scale enterprises with major foreign multinational companies from the European Union, United States of America, and Asia.
Tourism is also one of the aspects that affect Structure of the Economy in Kenya. Kenya’s industrial Kenya has rich tourist attractions and over the years, tourism has overtaken agricultural products (tea, coffee and Horticulture) to be the highest foreign exchange earner. Recently travel advisories, specifically by the United States of America, have largely been ignored and it is predicted that the number of tourists to the country will hit 1 million as a result of efforts by the government, the Kenya Tourist Board and the private tourism industry investors to aggressively market the country both locally and internationally, changing the traditional tourist sources to the Far East and China. The earnings by tourism sector grew by 4.4% from KShs. 21,734 million in 2002 to 22,698 million in 2003.
Gross Domestic Product Growth of the Structure of the Economy in Kenya
Gross Domestic Product Growth of the Structure of the Economy in Kenya analyzes that after posting a GDP growth rate of 1.1 per cent in 2000 and 1.2 per cent in 2002, the Kenyan economy showed signs of recovery by posting a real growth of 1.8 and 2.6 per cent in 2003 The growth emanated mainly from the major sectors of the economy, namely agriculture, manufacturing, building and construction, Government services and finance, real estate and business services. Gross Domestic Product Growth of the Structure of the Economy in Kenya describes that the economy is projected to grow at a rate of about 2.3 per cent in 2004 despite external setbacks, such as the high oil prices and drought, as the economic indicators are positive. This is supported by the fact that in the first ten months of 2004, cement consumption increased by 10 per cent, energy consumption went up by 8 per cent, while oil consumption
rose by 9 per cent and private sector borrowing also increased by 18 per cent. Kenya enjoyed strong economic growth from independence until the 1970s. The average Gross Domestic Product growth rate declined from 6.5 % between the 1960s and the 1970s to 1.8 % in 2003, below sub-Sahara region’s (outside South Africa) average of 3.6%. Kenya’s economy is reasonably diversified, though most employment is dependent on agriculture, which contributes approximately 24% of Gross Domestic Product. Gross Domestic Product Growth of the Structure of the Economy in Kenya recorded a positive growth of 1.5 % for the year 2003. Kenya is the second largest exporter of tea, which, together with horticultural products, contributed 50.8% of total export earnings for the year 2003. Tourism accounts for another 19% of Kenya’s Gross Domestic Product, and is the second most important source of foreign exchange. The industrial sector contributes only 18% of GDP, and is a growing source of exports in the East African region. A comparison of Kenya’s Gross Domestic Product growth rate to selected African countries and regions is summarized in the Table 3 below. Countries in sub-Sahara Africa excluding South Africa recorded an impressive 3.7% growth in 2003. Gross Domestic Product Growth of the Structure of the Economy in Kenya says that though low for a developing region it was an indication that the region can perform better. The growth was occasioned by improved macro-economic policies, debt relief under Highly Indebted Poor Counties (HIPC) initiatives and improved commodity prices. Higher growth in the region is hampered by HIV / AIDS prevalence, adverse weather conditions, political instability and civil wars in a number of the countries, which affect the other neighboring countries.
Business Training in Kenya highlights more.
Recommendations of the Structure of the Economy in Kenya
One of the ways to develop the Structure of the Economy in Kenya is to boost the aspects that affect it in the first place.
Boosting the Structure of the Economy in Kenya requires that agricultural sector be