Kenya Pest Analysis

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Political environment The political model under which Kenya operates is a presidential representative democratic republic. This means that power is shared by multiple parties which either function separately or form coalitions, and that the president of the country acts as both head of state and head of government, the current president, elected in 2013, being Uhurru Kenyatta. (Uhurru Kenyatta) The political environment is mainly characterized by severe instability and widespread corruption. Politicians in power systematically override the country’s laws, to misuse their power for personal profit, without ever being held accountable despite continuously facing corruption allegations. Electoral violence is very prevalent, and usually escalates …show more content…

According to the World Bank, it achieved lower middle income status in 2012, its GDP reaching $55.2 billion in 2014. (Kenya Overview, 2014). Furthermore, the GDP is projected to grow to $89 billion at the current prices by 2018. Manufacturing accounts for 14% of the GDP. The leading industries in the country are based on agriculture, and more specifically grain milling, beer production, and sugarcane crushing, and the fabrication of consumer goods, with the service sector being the main driver of economic growth. However, Foreign Direct Investment in the Kenyan economy is a relatively low share compared to neighboring countries. According to S. M. Omanwa (2015), “in 2010 only $185 million of foreign direct investments were placed in Kenya, compared to $433 million and $817 million in Tanzania and Uganda respectively.” This is despite the abolition of strong protectionist tendencies followed by the government since 2002, in an effort to increase the investment inflows. Kenya is a member of the EAC (East African Community) which is a regional intergovernmental organization whose other members are the Republic of Burundi, Rwanda, and the United Republic of Tanzania. Since 2010, within this organization the countries have established a common market, an area where the removal of all barriers (such as tariffs), a common external policy and free capital movement allow for trade to flow …show more content…

The availability also contributes to fairly low wage levels. Flexible employment regulations make workforce management comparatively easy for companies in Kenya. The country also enjoys economic growth, which is increased thanks to its membership in the Common Market for Eastern and Southern Africa (COMESA), and the EAC (East African Community). The freedom of movement for all the factors of production between the member countries, along with coordinated policies, allow for the factors to become more efficiently allocated, which helps increase productivity. It also helps the economy become more competitive by eliminating uncompetitive companies and preventing monopolies and encouraging innovation. (Sawkut,

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