Kenya

Location : Eastern Africa, bordering the Indian Ocean, between Somalia and Tanzania.

Capital : Nairobi

Languages : English (official), Kiswahili (official), numerous indigenous languages

Area : 582,650 sq km

Land Use : arable land: 8.08%; permanent crops: 0.98%; other: 90.94% (2001)

Natural Resources : limestone, soda ash, salt, gemstones, fluorspar, zinc, diatomite, gypsum, wildlife, hydropower

Population : 33,829,590 (July 2005 est.).

Labour force : 11.4 million (2004 est.)

Labour force participation rate : 33.70% of population (2002)

Population below poverty line : 50% (2000 est.)

International Organisation participation : ACP, AFDB, AU, C, EADB, FAO, G-15, G-77, IAEA, IBRD, ICAO, ICC (signatory), ICFTU, ICRM, IDA, IFAD, IFC, IFRCS, IGAD, ILO, IMF, IMO, Interpol, IOC, IOM, ISO, ITU, MIGA, MINURSO, MONUC, NAM, ONUB, OPCW, UN, UNAMSIL, UNCTAD, UNESCO, UNHCR, UNIDO, UNMEE, UNMIK, UNMIL, UNOCI, UPU, WCO, WHO, WIPO, WMO, WToO, WTO

GDP per capita : U$1,100 (2004 est.)

GDP Growth Rate : 2.0% pa 1990-2001

GDP sectoral composition : agriculture: 19.3%; industry: 18.5%; services: 62.4% (2004 est.)

Investment (gross fixed): 14.7% of GDP (2004 est.)

Industries: small-scale consumer goods (plastic, furniture, batteries, textiles, soap, cigarettes, flour), agricultural products; oil refining, aluminum, steel, lead, cement; commercial ship repair, tourism

Industrial production growth rate : 2.6% (2004 est.)

Agriculture - products : tea, coffee, corn, wheat, sugarcane, fruit, vegetables; dairy products, beef, pork, poultry, eggs

Exports : U$2.589 billion f.o.b. (2004 est.)

Exports - commodities : tea, horticultural products, coffee, petroleum products, fish, cement

Exports - partners : Uganda 12.8%, UK 11.6%, US 10.4%, Netherlands 8.3%, Pakistan 5.1%, Egypt 4.7%, Tanzania 4.3% (2004)

Imports : U$4.19 billion f.o.b. (2004 est.)

Imports - commodities : machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastics

Imports - partners : UAE 13.2%, Saudi Arabia 9.6%, South Africa 9.3%, US 8%, UK 7.2%, China 6.7%, Japan 5.4%, India 4.9% (2004)

QUALITATIVE TRADE PROFILE

Kenya 's trade policy objectives include moving towards a more open trade regime, strengthening and increasing overseas market access for Kenyan products, especially processed goods, and further integration into the world economy. Kenya has dismantled its quantitative import restrictions and price controls on major products and the tariff is now the main trade policy instrument. Some 15% of Kenya's tariff lines are bound at ceiling rates ranging from 18% on pharmaceutical goods to 100% on all agricultural products. "Other duties and charges" on all these products are bound at a zero rate, notwithstanding the imposition of the IDF on all imports and a fee of 1% on agricultural imports. Average applied tariffs in 2004 were 16.8%, with average for agricultural products is 23.6% and the average for non-agricultural products 15.7%. Kenya has virtually no non ad valorem duties.

Mixed duties apply to around 10% of all tariff lines and specific duties to 30 lines at the eight-digit level of the Harmonized System (HS). In addition to tariffs, "suspended" (stand-by) duties ranging up to 70% increase to 95% the maximum ad valorem import duties on wheat flour, meslin flour, and certain types of sugar. The suspended duties replaced variable duties on food and currently apply to some 17% of all tariff lines at the HS eight-digit level, in agriculture and manufacturing. The maximum suspended duty of 70% also applies to maize, rice, and milk. The simple average rate of Kenya's non-specific import duties (inclusive of applied suspended duties) is 18%. Some 3.7% of all tariff lines are duty free while 38% carry rates higher than 15%; except paper, paperboard, cards, and office stationery, rates higher than 35% apply to agricultural products and their transformations. The inclusion of the fee raises to 20.75% the average rate of import duties. In the aggregate, the positive escalation of Kenya's tariff (highly pronounced on products such as textiles, wearing apparel, leather, and metallic, rubber, petroleum, and chemical products) means that the effective protection provided to most industries is higher than the nominal rate. A value-added tax of 15% and excise duties ranging up to 135% (the excise duties are mixed or specific on certain products) are levied both on imports and locally produced goods.

INSTITUTIONAL FRAMEWORK 

The main responsibility for trade policy formulation is with the ministries of Tourism, Trade and Industry; Finance and Planning; and Agriculture and Rural Development (which constitute the Cabinet's Economic Sub-committee); and the Central Bank. In general, trade policy is formulated by the Cabinet's Economic Sub-committee. Recommendations may also be made by the two main inter-ministerial and consultative committees: (i) the Joint Industrial Commercial and Consultative Committee, which consists of the Kenya Chamber of Commerce and Industry (KNCC&I), the Kenya Association of Manufacturers (KAM), and a group of research institutes and private enterprises; and (ii) the Export Promotion Council (EPC). There are no independent bodies with a formal mandate to carry out public reviews and assessments of the Government's trade policy.

Trade policy implementation is mainly by the Ministry of Tourism, Trade and Industry, which is responsible for regulating imports, promoting exports, protecting consumer interests and ensuring fair trade. This Ministry is also in charge of implementing the industrial protection policy, which includes the administration of imports of industrial raw materials and capital goods, and regional initiatives, such as COMESA. The responsibilities of the Ministry of Finance and Planning include, inter alia, the collection of taxes and import duties through the Kenya Revenue Authority (the Government's collection agency), the administration of the Export Promotion Programmes Office (EPPO), which provides tax rebates for exported goods, and the coordination of ACP/EU relations and fiscal and monetary policies.

TRADE AGREEMENTS

Bilateral

Kenya has signed bilateral trade agreements with Argentina, Bangladesh, Bulgaria, China, Djibouti, Egypt, Ethiopia, Hungary, India, Iran, Lesotho, Nigeria, Pakistan, Poland, Romania, Rwanda, the Republic of Korea, Sudan, Swaziland, Tanzania, Thailand, Zambia and Zimbabwe. Kenya also benefits from preferential tariff treatment under the Generalized System of Preferences (GSP). Kenyan products receiving preferential treatment under GSP include tea, coffee, pyrethrum, and horticultural products, mainly exported to the United States, Japan, Canada, Switzerland, Norway, and the European Union.

Regional

Kenya is a member of the Common Market for Eastern and Southern Africa (COMESA), the East African Co-operation (EAC), the Organization of African Unity (OAU), and the Inter Governmental Authority on Development (IGAD). Kenya is currently negotiating an Economic Partnership Agreement with the EU through the ESA configuration.

Multilateral

Kenya is an active member of the WTO and applies at least MFN treatment to all its trading partners. It has GATS commitments in 40 sectors.  

NEED PRIORITIES  

There is need for enhanced technical assistance in implementation activities in the areas of intellectual property, antidumping and countervailing duties.

Source: Commonwealth Yearbook 2005, World Fact Book, WTO Secretariat.