Instruct: Given a question, retrieve documents that can help answer the question.
Query: What is Kenya's GDP?
Kenya's economy is market-based with a few state-owned infrastructure enterprises and maintains a liberalised external trade system. The country is generally perceived as Eastern Africa's hub for Financial, Communication and Transportation services. Major industries include: agriculture, forestry and fishing, mining and minerals, industrial manufacturing, energy, tourism and financial services. As of 2019 estimates, Kenya had a GDP of $98.264 billion making it the 65th largest economy in the world. Per capita GDP was estimated at $1,991.
Kenya's policy of import substitution which started in 1946 with European and Asian enterprises, did not achieve the desired industrial economic transformation results and the rising oil prices made Kenya's manufacturing sector noncompetitive starting in the late 1970s[28]. The government began a massive intrusion in the private sector. Lack of export incentives, tight import controls, and foreign exchange controls made the domestic environment for investment even less attractive. From 1991 to 1993, Kenya had its worst economic performance since independence. Growth in GDP stagnated, and agricultural production shrank at an annual rate of 3.9%. Inflation reached a record 100% in August 1993, and the government's budget deficit was over 10% of GDP.[29] As a result of these combined problems, bilateral and multilateral donors suspended program aid to Kenya in 1991[30].
Industry and manufacturing: In the last 31 years, this component of Kenya's GDP has been greatly fluctuating. In 1980, industry and manufacturing accounted for 21 percent of Kenya's overall GDP.[47] In 1990, it decreased to 19 percent, and in 2000, the value added to GDP decreased again to 17 percent.[47] In 2011, there was a slight rise to 19 percent of Kenya's overall GDP.[47]
The Grand Regency hotel played a minor part in the Goldenberg Scandal, one of the largest corruption scandals uncovered in Kenya (See article: Corruption in Kenya.) Goldenberg involved the trans-shipment of large quantities of gold through Kenya, with a 35% subsidy paid to the Goldenberg company by the Government of Kenya. Much of the gold was smuggled out of the Democratic Republic of the Congo, site of a civil war. It is estimated the earlier scandal cost the country around 10% of one years' GDP, and many of the country's current leaders have been implicated.
However, gold mining represented a tiny portion of Kenya's GDP, with only one operational gold mine (at Kakamega). Goldenberg International therefore developed a scheme of smuggling gold into Kenya from Congo, so that they could legally export it at the higher export price offered by the Kenyan government.
The government of India identified three new categories of data sources that were now being used in GDP calculation to make it more reliable:
The overall level of GDP did not get revised significantly; at best there was a slight decrease. However, there was a slight change to the composition of GDP. Under the new calculation method, industry became 31% compared to the old 25%, whereas services became 51% compared to the old 57%. Within industry, all three components, mining, manufacturing, and construction, were raised. This contrasted significantly with the results of past GDP rebasings, such as the 2010 Ghana GDP rebasing, and the 2014 Nigeria GDP rebasing and similar rebasings in Kenya, Uganda, Tanzania, and Zambia. The "Financial Times" reported commentators as being surprised by the lack of upward revision to the numbers.
Although Kenya is the most industrially developed country in East Africa, manufacturing still accounts for only 14 percent of gross domestic product (GDP). This level of manufacturing GDP represents only a slight increase since independence. Expansion of the sector after independence, initially rapid, has stagnated since the 1980s, hampered by shortages in hydroelectric power, high energy costs, dilapidated transport infrastructure, and the dumping of cheap imports. However, due to urbanisation, the industry and manufacturing sectors have become increasingly important to the Kenyan economy, and has been reflected by an increasing GDP per capita. Industrial activity, concentrated around the three largest urban centres, Nairobi, Mombasa, and Kisumu, is dominated by food-processing industries such as grain milling, beer production, and sugarcane crushing, and the fabrication of consumer goods, e.g., vehicles from kits. Kenya also has an oil refinery that processes imported crude petroleum into petroleum products, mainly for the domestic market. In addition, a substantial and expanding informal sector engages in small-scale manufacturing of household goods, motor-vehicle parts, and farm implements. About half of the investment in the industrial sector is foreign, with the United Kingdom providing half. The United States is the second largest investor.[46]
Agriculture is also the largest contributor to Kenya’s gross domestic product (GDP). In 2005, agriculture, including forestry and fishing, accounted for about 24 percent of the GDP, as well as 18 percent of wage employment and 50 percent of revenue from exports.
President Kibaki also oversaw the creation of Kenya's Vision 2030, a long term development plan aimed at raising GDP growth to 10% annually and transforming Kenya into a middle income country by 2030, which he unveiled on 30 October 2006.
Real GDP is expected to continue to improve, largely because of expansions in tourism, telecommunications, transport, and construction and a recovery in agriculture. The Kenya Central Bank forecast for 2018 is above 6 percent GDP growth. GDP composition by sector, according to 2018 estimates, is as follows: agriculture, 25.7 percent; manufacturing, 14.0 percent; trade, restaurants, and hotels, 13.8 percent; transport and communications, 6.9 percent; government services, 15.6 percent; and other, 24.0 percent.[46]
This aims at improving the prosperity of all Kenyans through an economic development programme, covering all the regions of Kenya. It aims to achieve an average Gross Domestic Product (GDP) growth rate of 10% per annum beginning in 2012. To achieve this target, Kenya is continuing with the tradition of macro-economic stability that has been established since 2002. It is also addressing other key constraints, notably, a low savings to GDP ratio, which can be alleviated by drawing in more remittances from Kenyans abroad, as well as increased foreign investment and overseas development assistance (ODA).
The GDP grew rapidly after Independence.Between 1964 and 1976 it averaged 7% per annum. By the last year of President Jomo Kenyatta government in 1978, the total GDP of Kenya was US$5.3 Billion with a population of 15.08 million and a per capita of US$351.
The agricultural sector continues to dominate Kenya's economy, although only 15 percent of Kenya's total land area has sufficient fertility and rainfall to be farmed, and only 7 or 8 percent can be classified as first-class land. In 2006 almost 75 percent of working Kenyans made their living on the land, compared with 80 percent in 1980.[46] About one-half of total agricultural output is non-marketed subsistence production. Agriculture is the second largest contributor to Kenya's gross domestic product (GDP), after the service sector. In 2005 agriculture, including forestry and fishing, accounted for about 24 percent of GDP, as well as for 18 percent of wage employment and 50 percent of revenue from exports. The principal cash crops are tea, horticultural produce, and coffee; horticultural produce and tea are the main growth sectors and the two most valuable of all of Kenya's exports. In 2005 horticulture accounted for 23 percent and tea for 22 percent of total export earnings. Coffee has declined in importance with depressed world prices, accounting for just 5 percent of export receipts in 2005. The production of major food staples such as corn is subject to sharp weather-related fluctuations. Production downturns periodically necessitate food aid—for example, in 2004 aid for 1.8 million people⎯because of one of Kenya's intermittent droughts. However, the expansion of credit to the agricultural sector has enabled farmers to better deal with the large risk of agriculture based on rainfall and the dramatic fluctuations of the prices of agricultural products.[46]
Although Kenya is the most industrially developed country in the African Great Lakes region, manufacturing still accounts for only 14% of the GDP. Industrial activity, concentrated around the three largest urban centres, Nairobi, Mombasa and Kisumu, is dominated by food-processing industries such as grain milling, beer production, and sugarcane crushing, and the fabrication of consumer goods, e.g., vehicles from kits.
Large scale tourism promotion picked up in Kenya following the imposed hunting ban in Kenya since 1977. It has been noted that "photographic tourism", or non-consumptive wildlife use, is contributing 12% of Kenya’s GDP. Hence, some groups have recommended that tourism be promoted rather than any kind of hunting or consumptive wildlife use, as it could divert the attention of the government of Kenya from the policy goal of wildlife preservation.
After the new government taking office in 2003, there were early signs of economic recovery in Kenya. The annual GDP growth rate had continued to go up during the period from 2003 to 2007. Owing to the success of Economic Recovery Strategy developed by the new government, children had free access to the primary education. To some extent, improved education level and economic boom had eased the poverty in Kenya.
Between 2013 to 2017 under Uhuru Kenyatta government, the GDP growth averaged 5% per annum. In 2018 Kenya's Gross Domestic Product (GDP) is about US$85.98 billion. Per capita GDP averages somewhat more than US$1,790 annually. Adjusted in purchasing power parity (PPP) terms, per capita GDP in 2018 is about US$3,657. The country's real GDP growth averaged 5.7 percent in the first quarter of 2018 and nearly 6.3 percent in the second quarter of 2018, compared with 4.7 percent in the first quarter of 2017.
In a report for the Brookings Institution on the rebasing in Nigeria as well as similar rebasings in Kenya, Tanzania, Uganda, and Zambia, Amadou Sy noted that the rebasings highlighted the problems of relying on outdated data ad calculation methods that was prevalent prior to the rebasings, and also that the rebasings showed the importance and growth of the services sector. Sy called this a "structural transformation" in African economies that needed to be understood better. The increase in the size of the services sector was also noticed in the 2010 Ghana GDP rebasing. In contrast, the 2015 India GDP rebasing saw a "downward" correction in the size of the services sector and a corresponding upward correction in the size of industry.
As of 2009, Kenya's informal economy accounts for about 80 percent of the total employment for the country.[51] Kenya's informal sector consists of mostly self-employed individuals with few entrepreneurs whom employ others. Some of the benefits of the informal sector are that it contributes economic activity of what is equal to 35 % of the total GDP in Kenya, provides an informal finance in Kenya known as ROSCAs, and provides an income for those with lower socioeconomic status.[51]
The estimate of total GDP of Nigeria increased from 42.4 trillion naira ($270 billion USD at exchange rates) to 80.2 trillion naira ($510 billion USD at exchange rates), an 89% increase. This was similar to te result of rebasings in other African economies around that time, including Kenya, Uganda, Tanzania, and Zambia, and also matched the result of the 2010 Ghana GDP rebasing. It contrasted with the experience of the 2015 India GDP rebasing, where the overall estimate of the size of the economy was slightly reduced.
In 1963,Kenya's total GDP was US$926.6 Million with a population of 8.9 million and a per capita of US$104.
Services: The World Bank defines Services as jobs that are included in "wholesale and retail trade, transport, government, financial, professional, and personal services."[47] In 1980, services accounted for 47 percent of Kenya's overall GPD.[47] In 1990, it accounted for 51 percent, in 2000 it stayed constant at 51 percent, and in 2011, the services sector accounted for 58 percent of Kenya's overall GDP.[47]
After Mwai Kibaki took over as president in 2003,the GDP growth quickly picked up to 2.3% in 2004 reaching an all time high of 7% in 2007.GDP growth slumped to 1% in 2008 due to post election violence,then picked up to 2.9% in 2009 before averaging 5% between 2009 to 2013 when the Grand Coalition government came to an end.In the last year of Kibaki and the grand coalition government in 2013,Kenya's total GDP was US$55.1 Billion with a population of 44.83 Million and a per capita of US$1,229.
Some low-income countries have relatively high tax-to- GDP ratios due to resource tax revenues (e.g. Angola) or relatively efficient tax administration (e.g. Kenya, Brazil) whereas some middle-income countries have lower tax-to-GDP ratios (e.g. Malaysia) which reflect a more tax-friendly policy choice.
After regaining its independence in 1963, Kenya promoted Africanization[25] of the Kenyan economy, rapid economic growth through public investment, encouragement of smallholder agricultural production, and incentives for private often foreign industrial investment.The sessional paper number 10 of 1965 stressed the need for Kenya to avoid the western driven capitalistic economy,the eastern driven communism but concentrate on African socialism while ensuring that Kenya's economic fortunes are not dependent on a satellite relationship to any country or group of countries[26]. Gross domestic product (GDP) grew at an annual average of 6.6% from 1963 to 1973 and 7.2% during the 1970s. Agricultural production grew by 4.7% annually during the same period, stimulated by redistributing estates, diffusing new crop strains, and opening new areas to cultivation. Between 1974 and 1990, however, Kenya's economic performance declined. With GDP growth averaging 4.2% per year in the 1980s and 2.2% a year in the 1990s.[27]