3 Chapter Economic Environment
Kenya is the country with the greatest economic development in the East Africa region. Major industries are agriculture where exports such as tea and horticultural crops are thriving, tourism industry which has been developed against the background of rich nature, and other manufacturing and finance are the most advanced in this area. Since early acceptance of the market mechanism, because English is the official language because it is the former British colony, economic management that emphasizes external connection has been done because of the large number of overseas migrant workers. The population continues to increase by 1 million per year annually, reaching approximately 45 million in 2014. As the population of the young population is thick and the population bonus period is expected to continue for a long time, further economic growth can be expected.
This region is the most active in regional economic integration in Africa. The East African Community (EAC: East African Community) formed in 2001 by Kenya, Tanzania and Uganda, plus Luanda and Burundi in 2007, is a large economic zone with a population of about 170 million people (2014) There is it. Kenya is a central country in the regional economy, and it also enhances its presence as a hub connecting Uganda and other landlocked countries with Arab countries and the international Ocean and other overseas markets. There was a "Kenyan crisis" after the election in 2007-2008, but the political situation became stable as the general election in 2013 was carried out peacefully. However, terrorist attacks such as shopping mall raids by the Islamic fundamentalism organization "Al Shaverb" based in neighboring Somalia, where civil warfare continues, are occurring frequently, which is a stumbling block for tourists and investment. The key to future economic development can be said to be restoration of security.
■ GDP and Economic Growth Rate In the domestic "Kenyan crisis", internationally, Lehman shock was 0.2% in 2008 and 3.3% in 2009, except for the rest, the high growth rate of 4.6% or more over the past 10 years We are maintaining. Private consumption that accounts for 80% of GDP is favorable, driven by a strong expansion of domestic demand that is commensurate with population growth. In agriculture which accounts for 25% of GDP, production is easy to be influenced by the weather, and tea and coffee have instability factors which are easily affected by international price trends. In addition, the tourism industry, one of the major industries, has been sluggish due to concerns of terrorism. On the other hand, in recent years, the construction industry due to growing demand for infrastructure, the transportation and warehousing business centered on Mombasa port, the financial industry due to the spread of mobile phones and electronic money transfer, etc. are strong and are a new driving force for economic growth .
Per capita GDP has increased 2.5 times in 10 years, exceeding World Bank's medium income country standard of 1,136 US dollars. It can be said that the fact that the thickness of the intermediate layer became thick led to vigorous consumption. However, in Kenya, it is said that nearly half of them live below the international poverty line, and there are indications that the disparity of rich and poor, which expanded with economic growth, is becoming an instability factor of society. 【Real GDP Growth Rate and Nominal GDP】 (Unit: 1 billion KSh,%)
* Forecasted IMF in 2015source:IMF「World Economic Outlook Database, October 2015」
【Trends in nominal GDP per capita】 (Unit: US dollar)
* Forecast of IMF in 2014 and 2015 Source: IMF "World Economic Outlook Database, October 2015" Inflation Since the beginning of the 21st century Kenya has suffered from high inflation. The characteristics of Kenya's economy are high dependence of energy resources such as petroleum overseas, the fact that fluctuations in imported consumer goods prices directly hit domestic consumer prices due to the vulnerability of domestic manufacturing industry, the impact on production volume and prices due to weather There are things that the biggest agriculture is the main industry.
After the "Kenya crisis" at the end of 2007, in addition to social turmoil, food prices and international crude oil prices surged, continuing high inflation in the 10% range except for 2010. It is said that the influence of 'East African Great Drought' which began in 2011 is also great. However, we succeeded in rebuilding the macro economy with the support of the IMF from 2011 to 2013. Due to the weather recovery and the decline in international crude oil prices, after 2013 it is settled within the inflation target set by the central bank of Kenya between 5-6%. 【Changes in consumer prices】 (Unit: Index,%)
* Forecasted IMF in 2015 ※ Consumer price index: Index with 2000 as 100 Source: IMF "World Economic Outlook Database, October 2015" ■ Finance The fiscal balance of Kenya continues to be in deficit on a regular basis. Tax revenues have increased with economic growth in recent years, revenues expanded nearly 4 times in 10 years. However, expenditure has sharply increased further, and the primary balance fell to the 2006 loss. Even after that, the budget deficit amount has expanded, and the ratio of GDP also exceeds 5% after 2012.
A series of expenditures related to security such as the Kenyan crisis and anti-terrorism measures against Islamic fundamentalist organizations have increased sharply, that civil servant salary continues to rise, fiscal stimulus for infrastructure improvement is increasing Causes such as structural issues and urgent countermeasures costs are complex. Now that the EAC is preparing for economic integration, fiscal consolidation is a necessity for the government of Kenya. Since the level of public debt has already exceeded 2 trillion KSh, both at home and abroad, it is the level to receive the warning of the IMF, which is where the fundamental fiscal reform is urgent. 【Trend of fiscal balance】 (Unit: 1 billion KSh)* Forecasted IMF in 2015 Source: IMF "World Economic Outlook Database, October 2015"
As the economy grows, Kenya 's trade value has increased sharply, but the import value is always in excess of the export value, and the trade balance has become a recurring deficit. The export value has doubled in the last 10 years, but the import value has increased by more than three times, and the trade deficit has continued to expand. The background of this trend is that high dependence of energy resources such as petroleum and natural gas is high overseas, that the domestic industry is weak against vigorous domestic consumption and must depend on imported goods, currency There are things such as the rise in import prices due to the depreciation and the rise in import prices.
[Free Trade Area, Free Trade Agreement] Kenya is one of Africa's countries with a strong interest in free trade and is active in establishing economic zones in collaboration with neighboring countries. In 2010, tariffs within the EAC were eliminated, and intra-regional trade became actively carried out. Furthermore, we are pursuing unification of various systems and aiming for East Africa's unified economic zone. There is also a movement to conclude an FTA in the South-East Africa Common Market (COMESA) including Egypt, Ethiopia, the Democratic Republic of the Congo and others. Between EAC and EU, EPA negotiations are in progress and agreed in October 2014. Export tax exemption to the EU has already been started ahead of schedule and it is in a state waiting for ratification and entry into effect.
【Changes in trade balance】 (Unit: US $ 1 billion)
* Based on customs clearance, estimated actual value in 2014 Source: JETRO [Imports and exports by country / region] The export destinations in 2014 on a customs basis including reexports are the top in Uganda of neighboring countries at 60.7 billion KSh. Similarly, neighboring countries Tanzania is second with 42.7 billion KSh, EAC total including Luanda and Burundi is 123.7 billion KSh, accounting for 23.4% of total exports. The US continues third with 38.2 billion KSh, followed by UK 35.8 billion KES, Pakistan 22 billion KSh, Democratic Republic of the Congo 21 billion KSh, UAE 20.1 billion KSh. Eastern African countries such as the EAC region and the Democratic Republic of Congo, ring which originated from Mombasa, Indian Ocean, Arab trade, etc. It is characterized by various export destinations.
The import is top in 264.5 billion KSh, India with deep economic trends. China is 248.6 billion KSh, followed by USA, UAE, Japan, South Africa, Saudi Arabia, Indonesia. In terms of imports, 47.1% from Asia, China, Japan etc. Asia accounts for nearly half of the total. In addition, imports from the Gulf countries such as UAE and Saudi Arabia, South Africa, which is one of the largest economic powers of Sub-Saharan, are also thriving. Although it differs greatly between export destination and import source, it also shows that it extends over various countries / regions. Imports from Japan mainly from industrial equipment such as automobiles and electric generators are also growing, and in 2014 it is the fifth largest importer.
[Import / export by item] Looking at exports by item, horticultural crops such as cut flowers are top with 97.1 billion KSh. Tea will then be 93.9 billion KSh, clothing and accessories 28.9 billion KSh, coffee beans 199 KSh, tobacco kind 16.8 billion KSh. Horticultural crops, tea, coffee beans and tobacco products, which are the major industries of agricultural flower-shaped exports, account for about half of the export value. Most of clothing and accessories are produced and exported in the export processing zone (EPZ) by the preferential treatment system such as tariff exemption of the African Growth Opportunity Act (AGOA) in the United States. Regarding imported goods, petroleum products are top with 296.6 billion KSh, followed by industrial machinery 256.6 billion KSh, aircraft and related equipment 129.5 billion KSh, and private cars 101.7 billion KSh.In Kenya, where dependence on energy imports is high, we have imported crude oil mainly in the Gulf countries, but Kenya Refinery (KPRL), the sole refinery in East Africa, has been shut down from 2013, We are importing all essential oil products. In recent years, however, oil field development has advanced in Uganda and Kenya, and it is expected that the supply system will go forward including the construction of refineries in the domestic and the region in the future. In addition, industrial machinery and other imports are thriving and will continue to be favorable as infrastructure development becomes active in the future. In 2014, aircraft imports have increased sharply, but this is due to the fact that Kenya Airways purchased five aircraft from Boeing (USA).
The industrial composition of Kenya is different from the monoculture of resources found in many developing countries and the manufacturing base of labor-intensive industries using low-wage labor. Percentages by industry in the GDP are 28% for the primary industry, 17% for the secondary industry and 55% for the tertiary industry, and industrialization centered on the manufacturing industry has not progressed sufficiently , It can be said that it is at a unique stage that tertiary industry develops. In Kenya's primary industry, agriculture accounts for 26.5% of GDP, about 60% of the working population, agricultural products account for most of the major export items, so Kenya is definitely an agricultural country .
In the secondary industry, manufacturing industry, such as light industry and cement, which is immature, is most developed in this area, and the construction industry based on infrastructure development is also increasing its presence. In recent years, the development of the tertiary industry is remarkable, the wholesale / retail industry, which is supported by the population increase due to economic growth and the purchasing power of the middle class, the financial industry and the communication industry by the spread of cellular phone and automatic remittance system , Transportation and warehousing business originated from Mombasa port are attracting attention as growth industry. However, although the tourism industry represented by hotels and restaurants is a major industry with strengths in the medium to long term, in recent years, due to the deterioration of security, the tourism industry is greatly recessed.
■ Agriculture In Kenya, various crops such as corn, wheat, rice and other cereals, beans and potatoes, sugarcane, fruits, cotton, etc. are produced mainly in central highlands and rift valleys, livestock such as cattle and sheep are thriving and many It is self-sufficiency farming by small farmers. In addition, production of cash crops such as tea and coffee in the beginning of the 20th century and cut flowers in the 1980s became popular. Cash crops bring cash income to farmers and bring foreign currency to Kenya. On the other hand, food self-sufficiency rate in urban areas such as Nairobi has declined greatly, in the rural area as large as seen in "East African Dreary" in 2011 A large famine is occurring. The Kenyan Government is promoting the expansion of agricultural infrastructure such as irrigation facilities, progress is noticeable. [Tea / coffee]Cultivation of tea and coffee began in the early twentieth century, both in the UK of the former religious country and in the exchange of capital and technology with India, which was deeply involved in terms of trading, both. African tea cultivation started in Kenya by British who watched the climate condition good on fertile land. Today it also spreads to Uganda, Tanzania, etc, has become a major production area of tea, the production of tea in Kenya is the third largest in the world (2012) after China and India. Previously it was based on large-scale plantation, but in recent years it is said that the production by small-scale farmers is also large, accounting for about 60% of cultivated area. Coffee is produced under the public control of the Kenya Coffee Bureau (CBK: Coffee Board of Kenya). CBK is in compliance with the rules of the coffee industry and brand marketing of Kenya coffee. In case[Horticultural crops (cut flowers, fresh vegetables)]
Under the support of the EU from the 1970s to the 1980s, cultivation of carnations and roses began in the cool central highland with long sunshine hours but high altitude. After that, the fact that high-quality agricultural chemicals became popular, that Kenya Flower Farmers' Association was formed, international price negotiation power was established, cold chain to Europe via Nairobi International Airport was improved, fresh vegetables, fruits, etc. The growing of horticultural industry has become a major industry in Kenya due to the wide cultivation including the possibility of including. Many export destinations in Europe such as the Netherlands leading the world cut flower market, but also began shipping to Asia via Dubai which opened a cut flower hub in 2005, the highest ever in 4214 tons, 42.8 million tons / 97.1 billion KSh has been recorded. In addition, worldwide production in South American countries such as Colombia, Zambia and Ethiopia and other neighboring countries has also become active, diversification is also proceeding with the production place and destination. The global competitive situation is expected to be increasingly severe in the future.
■ Sewing industry In the Kenya garment industry until the 1980s, small businesses were producing domestically and neighboring countries such as Uganda. However, when entering the 1990's, cheap clothing items are imported from Asia in large quantities along with trade liberalization, and the domestic sewing industry will be greatly recessed. However, dramatic changes came in 2000 when the US took tax exemption from the "African Opportunity Growth Act (AGOA)". The characteristic of AGOA is that the rules of origin are loose and it is possible to receive preferential treatment even if imported raw materials are used. Therefore, even in Kenya where upstream industries such as spinning and woven fabrics are not growing, imports of cheap fabrics from Asia and only the sewing industry are subject to preferential treatment and rapidly expanded production. Many of them were produced by relatively large-scale joint ventures of Asian capital and local capital such as India, China, Taiwan, etc., and they were produced in the export processing zone (EPZ) specialized for export for the US market. It is said that nearly 40,000 jobs were created by the growth of the labor-intensive sewing industry.
As the extension of AGOA (until 2025) was decided in 2015, it seems that garment products will continue to maintain one corner of major export items, but the production cost is higher than those of Asian countries such as Bangladesh and Cambodia It is said that there are many tasks in the Kenya garment industry that is requested by AGOA. ■ Tourism industry The Kenya tourism industry accounts for about 12% of GDP (2013), the second largest in agriculture. Among East Africa, Kenya has long focused on tourism for many years. Safari utilizing abundant nature is famous in Japan, but the resort on the coast of the Indian Ocean where many passengers come from Europe is also a tourism resource alongside safari.
Kenya sightseeing in the 21st century continued to grow steadily on the back of the high popularity of tourism in Kenya in Europe, being in English-speaking countries, diverse traditional culture and rich tourism resources by nature . The annual number of passengers exceeded one million, in 2007 it reached 1.18 million. In the following 2008, due to the impact of the European financial crisis, both passenger numbers and tourism revenues will start to increase again in 2009. Although the Kenya tourism industry, which showed steady recovery, it will suffer a great blow by the deterioration of public security caused by the "Kenyan crisis" that occurred at the end of 2011. Furthermore, in 2013, the terrorist attacks that hit the Nairobi shopping mall "Westgate" by the Islamic extremist group "Al Shabbab" occurred, and terrorism continues frequently afterwards. In response to a series of terrorist attacks, European countries are restricting travel restrictions, so the number of passengers in 2014 is 25% below the peak hour. In order to revive the full-fledged tourism industry, it will be necessary to go beyond the high hurdle of effective counterterrorism countermeasures. 【Trends in the number of overseas tourists】 (Unit: thousands)
Source: Kenya National Bureau of Statistics Economic Survey (2004 - 2015)
・IMF・ケニア共和国大使館・農林水産省・KPMG・海外建設協会 支部通信 2014年4-5月号・国際通貨研究所https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html?fieldkey=2046&term=Population%20below%20poverty%20line・JETRO「世界貿易投資報告」・静岡産業大学・京大アフリカセンター