CONFIDENTIAL

FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY

BUSINESS OPPORTUNITIES

IN KENYA

FACT PACK

Business Sweden in Nairobi

2017

EXECUTIVE SUMMARY

Kenya was recently declared a middle income country

by the World Bank and aims to be an industrialised

nation by 2030, for which it has drafted a long-term

development plan dubbed Kenya Vision 2030

Kenya is expected to be among the fastest growing

countries in the world in 2017, with a GDP growth rate

expected at 6%. The country’s GDP amounted to USD

63,4 billion in 2015, to which the services sector is the

largest contributor

Kenya’s growth plans are driven by major projects in

infrastructure, energy and ICT in which large business

opportunities for Swedish companies can be found. The

healthcare sector and procurement by the United

Nations in Nairobi are other areas interesting for

Swedish companies

BUSINESS SWEDEN IN KENYA

Business Sweden’s office in Nairobi has twelve employees

with extensive market knowledge and long experience of

promoting Swedish business on foreign markets

We cover the Eastern African region and have, since we

established the office in 2007, supported Swedish business

entries in various sectors, such as energy, ICT, healthcare,

industrial processing, packaging, textile, transport systems

as well as in doing business with the United Nations

With its central location and ease of using Nairobi as a

business hub, Kenya can be the natural base to cover the

Eastern African market – a region with more than 250

million inhabitants

Welcome to Kenya and Eastern Africa!

22 FEBRUARY, 2017 BUSINESS SWEDEN 2

KENYA - THE EASTERN AFRICAN HUB AMONG THE

WORLD’S FASTEST GROWING ECONOMIES IN 2016

Robin Pettersson

Trade Commissioner East Africa

BASIC FACTS

Population: 46,1 million (2015)

Area: 582,645 sq. km

Capital: Nairobi

Languages: Swahili (official), English

(official), numerous indigenous

languages

Currency: Kenya Shilling (KES)

GDP: USD 63.4 billion (2015)

GDP growth: 5.6 % (2015)

Inflation: 6.6% (2015)

Exports: USD 5.9 billion (2015)

Imports: USD 16.1 billion (2015)

Swedish Export: SEK 429 million (2015)

Swedish Import: SEK 291 million (2015)

MAP OF KENYA

22 FEBRUARY, 2017 BUSINESS SWEDEN 3

KENYA IS THE NATURAL HUB IN THE REGION BECAUSE

OF ITS STRATEGIC LOCATION

SOURCES: WORLD BANK, NATIONAL BOARD OF TRADE – KOMMERSKOLLEGIUM, BUSINESS MONITOR

INTERNATIONAL, KNBS, EUROMONITOR INTERNATIONAL

KENYA

Nairobi

KENYA

Nairobi

UGANDA

TANZANIA

SOUTH SUDAN

ETHIOPIA

SOMALIA

RW

BUR

BUSINESS SWEDEN 22 FEBRUARY, 2017 4

SINCE 1963, KENYA HAS FACED CHALLENGES, BUT IS

NOW SHOWING POSITIVE DEVELOPMENT

1963 2002 2007 2008 2010 2000 2015

Kenyatta dies

in office,

succeeded by

Vice-President

Daniel arap

Moi

Kenya gets

independence

from United

Kingdom

Mwai Kibaki wins

presidential elections

ending Daniel arap

Moi's 24-year rule

Mwai Kibaki

wins 2nd term in

disputed

presidential

elections

Moi 24 year rule begins

Kenya officially

declared a one-party

state

GDP growth

declines due to

effects of the

PEV and global

financial crisis

Treaty Establishing

the East African

Community (EAC)

entered into force

New constitution

is promulgated

on 27th August

1978 2003

Completion of new

draft constitution

Thousands killed in

Post Election

Violence (PEV) due

to disputed elections

GDP expands by 25% after the

state rebased its calculations based

on key sectors such as real estate

and telecoms

Kenya is categorised as a middle-

income economy by World Bank

2013

Uhuru Kenyatta

wins peaceful,

presidential

elections

KENYA'S ECONOMIC GROWTH IS ATTRIBUTED TO KEY SECTORAL BOOMS IN REAL ESTATE, ICT, FINANCE AND AGRICULTURE EXPORTS

2017

Presidential

elections

scheduled to be

held 8th of

August

SOURCE: WORLD BANK, BUSINESS DAILY, KENYA NATIONAL BUREAU OF STATISTICS, EAST AFRICA

COMMUNITY SECRETARIAT

Kenya has a long-term development plan named Vision 2030 which aims to transform the country into be an

industrialised nation by year 2030

The plan comprises of three key pillars: economic, social and political development

BUSINESS SWEDEN 22 FEBRUARY, 2017 5

KENYA AIMS TO BE AN INDUSTRIALISED NATION BY

2030

SOURCE: KENYA VISION 2030

Enablers and Macro-Foundations

Economic Pillar

Aims to achieve an average

economic growth rate of 10% per

annum until 2030

Macroeconomic stability, infrastructural development, science, technology and innovation, land reforms, human

resources development, security and public sector reforms

Social Pillar

Seeks to create just, cohesive and

equitable social development in a

clean and secure environment

Political Pillar

Aims to realise an issue-based,

people-centred, result-oriented and

accountable democratic system

KENYA’S KEY ONGOING PROJECTS ARE GUIDED BY THIS VISION, WHICH IS AIMED AT GENERATING ECONOMIC GROWTH

CONTRIBUTION TO GDP BY SECTOR (2015)

CHARACTERISTICS

The services sector that contributes largely to Kenya’s GDP

comprises of industries including electricity and water

supply, wholesale and retail trade, tourism, financial

intermediation, public administration, education, health and

real estate (with a significant boom in the latter industry)

The second largest sector contributor being agriculture is

made up of agriculture, forestry and fishery. The bedrock of

Kenya's agricultural sector include the tea, coffee, and

horticultural industries. Kenya constitutes the world’s

largest exporter of black tea

The manufacturing, mining and construction sectors that

make up the industry sector has its contribution attributed

to activity in the private sector and the rollout of public

infrastructure projects

The ICT sector contributes to the economy partly due to

Kenya’s vibrant ICT sector referred to as the “Silicon

Savanna”

22 FEBRUARY, 2017 BUSINESS SWEDEN 6

THE SERVICE SECTOR IS THE LARGEST CONTRIBUTOR

TO KENYA'S ECONOMIC OUTPUT

SOURCES: BUSINESS SWEDEN ANALYSIS, KENYA NATIONAL BUREAU OF STATISTICS, KENYA BUSINESS DAILY,

EUROMONITOR INTERNATIONAL

Services 41%

Agriculture 32%

Industry 17%

ICT 1%

Other 9%

THE GROWTH OF THE SERVICE SECTOR IS DECREASING THE DEPENDENCY ON AGRICULTURE

63,4 67,1

71,3 75,9

80,5 85,6

0

10

20

30

40

50

60

70

80

90

2015 2016e 2017e 2018e 2019e 2020e

NOMINAL GDP 2015-2020

CURRENT USD BILLION

MAIN DRIVERS OF THE ECONOMY

22 FEBRUARY, 2017 BUSINESS SWEDEN 7

KENYA’S ECONOMY IS EXPECTED TO GROW AT AN

AVERAGE RATE OF 6.2% UNTIL 2020

SOURCES: BUSINESS SWEDEN ANALYSIS, WORLD BANK, KENYA BUSINESS DAILY, BLOOMBERG,

EUROMONITOR INTERNATIONAL, DELOITTE

CAGR*

With a projected GDP growth of 6% in 2017, Kenya is

among the world’s fastest growing countries

Medium term economic growth is forecasted at 6.5%

The growth in the economy has been supported by good

weather conditions, large public investments, increase in

private consumption and a pick-up in tourism

Construction, services and manufacturing are expected to

be key drivers of future growth together with the recovery

of the travel, transport, and business services sector

Greater regional integration and continued reliance on the

Mombasa port as main regional port will strengthen growth

in the transportation sector and boost current account

Infrastructural upgrades, which positions Kenya as regional

trade hub through planned projects such as the Lamu Port

and Southern Sudan-Ethiopia Transport corridor and the

new Mombasa-Kampala-Kigali standard-gauge railway is

expected to boost overall growth

FUTURE GROWTH WILL BE DRIVEN BY LARGE INFRASTRUCTURE PROJECTS AND GREATER REGIONAL INTEGRATION

*COMPOUND ANNUAL GROWTH RATE

SWEDISH EXPORTS TO KENYA, 2011-2015

USD million*

SWEDISH IMPORTS FROM KENYA, 2011-2015

22 FEBRUARY, 2017 BUSINESS SWEDEN 8

SWEDISH EXPORTS INCREASED BY 38% FROM 2014 TO

2015

SOURCE: UN COMTRADE, KOMMERSKOLLEGIUM

97,0

59,9

41,4 38,2 52,6

0

20

40

60

80

100

120

2011 2012 2013 2014 2015

SWEDISH EXPORTS TO KENYA, 2015

Paper and pulp

39% Other manu-

factured goods 32%

Machinery and devices

29%

46,5

56,4

35,7 33,4 33,4

0

10

20

30

40

50

60

2011 2012 2013 2014 2015

SWEDISH IMPORTS FROM KENYA, 2015

Food, beverages

and tobacco 85%

Crude materials and fuel

10%

Manu-factured goods

5%

USD million*

* CONVERTER: 1 USD = 8 SEK

* MAINLY COFFEE, TEA, FRUITS AND CUT FLOWERS

CURRENT AND PLANNED PROJECTS ARE FOCUSING ON INFRASTRUCTURE, ENERGY AND TRANSPORT

BUSINESS SWEDEN 22 FEBRUARY, 2017 9

KENYA’S GROWTH PLANS ARE DRIVEN BY MAJOR

PROJECTS IN VARIOUS LOCATIONS

SOURCES: BUSINESS SWEDEN ANALYSIS, BUSINESS DAILY, KENYA PORTS AUTHORITY,

KENYA AIRPORTS AUTHORITY, KENYA ICT AUTHORITY

Standard Gauge Railway 2013 – 2017

Construction of the Mombasa-Malaba standard

gauge railway will involve construction of a 500km

railway line from Mombasa to Nairobi at an

estimated cost of 3.8 BUSD. The Mombasa-

Nairobi line is expected to be extended to Malaba,

western Kenya, into Uganda and ultimately to

Kigali, Rwanda

Nairobi

Railway Cities – TBD

The USD 2,1 billion initiative will include the

redevelopment of existing rail stations into mini

cities which include business parks for light

manufacturing, hotels, shopping arcades,

restaurants and parking garages. The project

will be launched in Nairobi, Mombasa and

Kisumu Lamu

Mombasa

Konza Technology City 2008 – TBD

The USD 9.2 billion project* has been identified

as one of the key drivers of the achievement of

Vision 2030. The technology park will be built

on a 64 square-mile stretch covering about

5,000 acres of land in Machakos county

Machakos

City Tram 2016 – TBD

Kenya’s City Tram project is being implemented

in the larger metropolitan area of the capital

Nairobi which has a population of over 3 million

people. The passenger train is in the initial

phase expected to transport 300,000 people on

a daily basis. The projects estimated budget is

USD 145 million

Lamu Port and Southern Sudan-Ethiopia

Transport Corridor (LAPSSET) 2012 – 2030

The 22,8 BUSD project is hoped to trigger

economic activities and more than double Kenya’s

GDP. Components include the Lamu port, Lamu-

Ethiopia-South Sudan superhighway, Lamu-Juba-

Addis Ababa railway line, an oil refinery and a

2,240km oil pipeline connecting oil fields in South

Sudan to the refinery at the Lamu Port

Turkana Wind Power Project (LTWP) 2008 –

The 766 MUSD project aims to provide 300MW of

wind power to the Kenya national grid. It

comprises of 365 wind turbines and includes

upgrading of the existing road leading to the wind

farm site as well as an access road network in

and around the site

Turkana

county

*KES 900 BILLION, EXCHANGE RATE 97.8 (JUNE, 2015)

BUSINESS SWEDEN 22 FEBRUARY, 2017 10

THE ARE SEVERAL OPPORTUNITIES FOR SWEDISH

COMPANIES IN A NUMBER OF VIBRANT SECTORS

SOURCES: BUSINESS SWEDEN ANALYSIS, KENYA INVESTMENT AUTHORITY

Construction of terminals, runways,

hangars etc. and supply of good and

services as part of the expansion and

upgrade of international and regional

airports

The construction of a port, rail, roads,

airport, housing and utilities infrastructure

for LAPSSET

Consultancy and service providers for

MRT

Supply of buses and maintenance of

fleet, stations and terminals

Infrastructure

Supply of health information systems that

generate, validate and analyze health

information needed to centralize health

records

Provision of medical equipment and

diagnostics equipment to support the

health sector

Drug manufacture of vital health products

like vaccines and vital medicines

Healthcare

The UN in Africa is procuring goods

and services worth 28 billion SEK

annually

One of UN’s two main procurement

hubs in Africa is located in Nairobi

Large interest for Swedish solutions in

ICT, energy and environmental

technology, healthcare, prefabricated

shelter solutions, civil security and

water and sanitation

Business with the United Nations

Generation of geothermal energy

Small hydropower development

Oil and coal exploration

Transformer supply

Rural Electrification projects

Power Africa initiative to double energy

access

Wind and solar power generation

Energy

Business Process Outsourcing and IT

Enabled Services (ITES)

Software development

Construction of the proposed multi-billion

shilling Konza ICT Park

e-Business, e-Education and data

services

Communication Equipment in the

Security Sector

IT Security

ICT

Waste management systems to manage

large amount of waste in cities

Kenya’s minerals still remain largely

unexploited, e.g. due to lack of

inappropriate mining technologies,

opportunities for mineral exploitation and

value addition exist

Potential for consultancy in promotion of

conservation and compensation of

environmental services

Environment and minerals

Business Sweden’s assignment is to facilitate for Swedish companies to grow

internationally and for foreign investors to invest in Sweden

We promote Sweden as an attractive, innovative and competitive business partner. An

important part is to support Swedish companies in reaching export markets with their

products and services

We are jointly owned by the Swedish government and the private sector, represented

by the Ministry for Foreign Affairs and the Swedish Foreign Trade Association

Business Sweden offers a variety of consultancy services, for example the following:

FROM STRATEGIC ADVICE TO HANDS-ON ESTABLISHMENT SUPPORT

BUSINESS SWEDEN 22 FEBRUARY, 2017 11

BUSINESS SWEDEN IN EA CAN ASSIST YOU FURTHER

Our team in Eastern Africa

Robin Theresa Julia Brenda Anna-Paula Juliet Niclas

NAIROBI

Meshack Olive

Market Analysis

Deepen your knowledge

on local market dynamics

in your sector

Recruitment

We support in finding and

recruiting the right local

representatives

Visiting Programme

Searching and visiting

relevant partners, e.g.

distributors

Business Support

We offer office space and

administrative support on

the ground

CONTACT US

BUSINESS SWEDEN IN KENYA

Business Sweden Eden Square, 3rd floor, off Westlands road Box 13799, 00800 Nairobi T +254 20 3749760

kenya@business-sweden.se

www.business-sweden.se/kenya