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Kenya: Market Profile

1. Overview

Kenya has made significant political, structural and economic reforms that have largely driven sustained economic growth, social development and political gains over the past decade. Kenya’s recent political reform stemmed from the passage of a new constitution in 2010 that introduced a bicameral legislative house, devolved county government, a constitutionally tenured Judiciary and electoral body. Devolution remains the biggest gain from the August 2010 constitution, which ushered in a new political and economic governance system. It is transformative and has strengthened accountability and public service delivery at local levels. However, the country’s key development challenges still include poverty, inequality, climate change and the vulnerability of the economy to internal and external shocks.

Sources: World Bank, Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

July 2010
Kenya joined its neighbours in forming a new East African Common Market, intended to integrate the region's economy.

August 2010
The country’s new constitution came into effect, it was designed to devolve power to the regions as approved in the referendum.

September 2010 - June 2011
East Africa hit by worst drought in 60 years.

March 2012
Oil was discovered.

March 2013
President Uhuru Kenyatta, the son of Kenya's first president, won presidential election with just over 50% of the vote.

August - October 2017
President Kenyatta was declared winner of the presidential election in August as well as the re-run in October.

The Kenya-Ethiopia electricity transmission interconnector is likely to be ready in mid-2019, completing the first phase of the East African power pool project.

Sources: BBC country profile – Timeline, Fitch Solutions

3. Major Economic Indicators

Graph: Kenya real GDP and inflation
Graph: Kenya real GDP and inflation
Graph: Kenya GDP by sector (2017)
Graph: Kenya GDP by sector (2017)
Graph: Kenya unemployment rate
Note: IMF has no unemployment data on Kenya
Graph: Kenya unemployment rate
Note: IMF has no unemployment data on Kenya
Graph: Kenya current account balance
Graph: Kenya current account balance

e = estimate, f = forecast
Sources: IMF, World Bank, Fitch Solutions
Date last reviewed: October 20, 2018

4. External Trade

4.1 Merchandise Trade

Graph: Kenya merchandise trade
Graph: Kenya merchandise trade

Sources: WTO, Fitch Solutions
Date last reviewed: October 20, 2018

Graph: Kenya major export commodities (2017)
Graph: Kenya major export commodities (2017)
Graph: Kenya major export markets (2017)
Graph: Kenya major export markets (2017)
Graph: Kenya major import commodities (2017)
Graph: Kenya major import commodities (2017)
Graph: Kenya major import markets (2017)
Graph: Kenya major import markets (2017)

Sources: Trade Map, Fitch Solutions
Date last reviewed: October 17, 2018

4.2 Trade in Services

Graph: Kenya trade in services
Graph: Kenya trade in services

e = estimate
Source: WTO
Date last reviewed: October 5, 2018

5. Trade Policies

  • Kenya has been a WTO member since January 1, 1995 and a member of GATT since February 5, 1964.

  • Kenya is a member of the East African Community (EAC) which gives businesses in the country access to a large market with reduced trade costs. EAC Member States have signed a Protocol to establish a common Customs Union. It is also a member of the Common Market for Eastern and Southern Africa (COMESA), where exports and imports within member countries enjoy preferential tariff rates. Burundi, Rwanda, Tanzania and Uganda are on the UN's list of Least Developed Countries (LDCs), while Kenya is a non-LDC.

  • Import duty is levied under the EAC Customs Management Act. Imported goods are generally subject to import duty at varied rates, including 0% for raw materials and capital goods (also exempt from value-added tax (VAT)), 10% for intermediate goods, and 25% for finished goods. However, a different rate of duty can be prescribed by the Council of Ministers of the EAC partner states. Enterprises established in an Export Processing Zones (EPZ) are exempt from customs duty on machinery and inputs for products manufactured for export while licensed oil and gas contractors with a Production Sharing Contract (PSC) with the government of Kenya are exempt from customs duty on importation of machinery, spares, and inputs used in exploration activities, excluding motor vehicles.

  • In addition, enterprises that are established under the special economic zones (SEZs) enjoy import duty exemption. Where raw materials that are not subject to 0% import duty are used to manufacture goods for use locally within the EAC and for export outside the EAC, one may apply for remission under the EAC duty remission scheme. This is subject to a requirement for proof of export, and one may be required to execute a bond/bank guarantee. Further, assemblers of motor vehicles and motor cycles, among others, enjoy import duty remission under the scheme.

  • Deepening regional integration at the EAC, COMESA, Tripartite Free Trade Area (TFTA) and the Africa Continental Free Trade Area (AfCFTA) are part of the country's long-term goals that will yield benefits for the trading environment.

  • There is increasing emphasis on improving intra-regional trade and the Kenyan government has been at the forefront of major regional infrastructure development to realise this aim. In a fresh bid to open up their borders and facilitate investment and trade, Kenya and Ethiopia's leaders agreed to remove various barriers that impede business development and intra-regional trade. Changes made include relaxed rules on residence for investors, streamlined application procedures for Kenyan companies seeking to invest in Ethiopia, as well as relaxed work permits. Over the medium term, Kenyan investors venturing into Ethiopia should expect fewer restrictions to their business once an agreement signed by the two countries is implemented.

  • In addition, in 2017, Kenya and Tanzania opened the modern Holili/Taveta border post to facilitate regional trade. This marks the first modern border post to be operated among the 13 one-stop border posts in East Africa and South Sudan. Authorities from both countries expect that the facility will reduce the cost of doing business by 40% and accelerate regional integration and economic growth among the East African member states. While non-tariff barriers remain a major challenge across the borders, the facility will enhance integrated border management to increase the free flow of movement and goods. In addition, further changes were implemented, such as opening the port of Mombasa for 24 hours and reducing the frequency of road blocks, which reduce import and export lead times and costs.

  • In October 2016, South Africa and Kenya moved to soften trade and visa barriers between the two regional powerhouses as part of ongoing efforts to boost low levels of commerce within SSA. Kenya brought forward issues, such as the need for reduced taxes on Kenyan products and improved labour mobility between the two states.

  • Kenya has also signed bilateral trade agreements with several countries, including Argentina, Bangladesh, Nigeria, Bulgaria, China, Comoros, Congo (DRC), Djibouti, Egypt, Hungary, India, Iraq, Lesotho, Liberia, Netherlands, Pakistan, Poland, Romania, Russia, Rwanda, Somalia, South Korea, Swaziland, Tanzania, Thailand, Zambia, and Zimbabwe. Additional agreements are under negotiation with several additional countries, including Belarus, Czech Republic, Ethiopia, Eritrea, Iran, Kazakhstan, Mauritius, Mozambique, and South Africa. Increasing trade partners will provide a solid basis for durable export and import growth in the long run.

  • In addition, a Railway Development Levy has been in place since 2013, imposing a 1.5% tariff on all imported products. Non-tariff barriers to trade, including high levels of bureaucracy, delays at customs clearance and port congestion, adding further costs to imports for businesses.

  • Non-tariff barriers include the requirement to obtain a Certificate of Conformity from a Kenya Bureau of Standards appointed pre-export verification of conformity (PVoC) partner and the obligation to obtain an Import Standards Mark (ISM) for a list of sensitive products imported into Kenya. Foreign firms may find packaging and labelling requirements difficult to meet.

  • Kenya applies tariffs based on the international harmonised system (HS) of product classification, and applies duties and tariffs of the EAC Common External Tariff. In general, customs duty is levied at rates between 0% and 100%. Imports into Kenya are subject to a standard VAT rate of 16%, levied on the sum of the CIF value, duty, and other applicable taxes. The average tariff rate in Kenya stands at 8.9% which is the fourth highest in East Africa (after Sudan, Djibouti and Ethiopia).

  • In September 2016, Kenya's Parliament ratified the Economic Partnership Agreement (EPA) with the European Union (EU) that will allow Kenya to export its agricultural products to Europe in a move to securing duty-free market access to the EU.

  • In 2016, Kenya had a safeguard in operation that allows it to limit imports of duty-free sugar to 350,000 tonnes annually. The safeguard was designed to allow the Kenyan government to increase the competitiveness of its sugar industry, though this has not happened. In February 2016, this safeguard was extended again.

Sources: WTO – Trade Policy Review, Fitch Solutions

6. Trade Agreement

6.1 Trade Updates

Changes introduced by the EAC Gazette Notices: The EAC Gazette Notice in June 2017 that introduced budgetary changes for all EAC partner states brought with it a number of changes, including a decrease in the import duty rates for worn clothing and other worn articles from 35% or 0.4 United States dollars USD/kg to 35% or USD0.2/kg, whichever is higher; rice in the husk, husked brown rice, semi milled or wholly milled rice, and broken rice from 75% or USD345/MT to 35% or USD200/MT, whichever is higher; and poly vinyl alcohol (form of plastic used in various industries other than beverage) from 10% to 0%, among others. This has the effect of incentivising some key sectors of the economy and addressing a shortage of some commodities in the local market.

On the other hand, the import duty rate increased for various products, including the following: structures of iron and steel from 25% to 25% or USD250/MT, whichever is higher; liquid petroleum gas (LPG) cylinders from 0% to 25%; road tractors for semi-trailers (tractor heads that pull semi-trailers) from 10% to 25%; and paper and paperboard products from 10% to 25%. The overall effect of these changes is to boost the local industries by protecting them from cheap imports.

The Gazette also granted remission of duty on some items for further manufacturing in Kenya, including wheat grain, with the applicable rate being 10% instead of 35%. A full duty remission on raw sugar for manufacture of sugar for industrial use has been granted on condition that if the finished product is sold within the EAC, then such goods shall attract duties, levies, and other charges provided in the EAC Common External Tariff (EACCET).

Other products to be imported at 0% duty rate include inputs for ship assembly, inputs for assemblers of equipment specifically designed for the use by disabled, blind, and physically handicapped persons, raw materials and equipment to be used in the manufacture of textiles and footwear, iron and steel products of HS.7228.20.00 imported for the manufacturer of automobile bolts, nuts, and leaf springs, and inputs for the manufacture of filters. In addition, various assemblers of motor cycles (24 motor cycle assemblers) have been authorised to import specific quantities of completely knocked down (CKD) kits for manufacture of motor cycles at a duty rate of 10% for 12 months under the duty remission scheme.

The Gazette also amended the Fifth Schedule of the EAC Customs Management Act (EACCMA) by removing electrical energy saving bulbs for lighting (compact fluorescent bulbs) from the exemption schedule. Separately, machinery and inputs imported for use in the distribution of oil, gas, and geothermal have been included in the exemption schedule. The exemption was previously restricted to machinery or inputs used in oil, gas, and geothermal exploration and development only and not the machinery or input used for the distribution of these products.

Following the review and modification of the Harmonised Commodity Description and Coding System (HS Code) Version 2012 by the World Customs Organisation (WCO), the Council has reviewed the EACCET into a 2017 version in line with the modified WCO HS Code. This move ensures that the EACCET is up-to-date with regards to global advancement in technology and innovation.

In addition to the above WCO HS Code update, in the EAC, the HS Code is usually updated every five years to include new products introduced in international trade that are not accommodated by the existing tariff codes, remove products that are no longer traded, and to take into account the concerns and feedback from international trade players. In this regard, the EACCET has released the new CET 2017.

6.2 Multinational Trade Agreements


  1. COMESA: Kenya is part of COMESA, a collective of 19 countries under a free trade area, with most members having an open border for traded goods and services. Notably this group comprises of Kenya, Burundi, Comoros Islands, DRC, Djibouti, Egypt, Eritrea, Ethiopia, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.

  2. EAC: Kenya is a member of the EAC, which gives businesses in the country access to a large market with reduced trade costs. EAC Member States have signed a Protocol to establish a common Customs Union. The Customs Union aids regional trade flows and allows businesses to use Kenya as an entry point for the East African market. Trade with neighbouring states is substantial.

  3. EAC-the United States: The United States is a major export market and the Trade and Investment Framework Agreement and Africa Growth and Development Act (AGOA) removed tariffs for some product exports to the United States (such as textiles), reducing trade barriers. Kenya qualifies for duty free access until 2025 to the United States market under AGOA. Some of Kenya's major products that qualify for export under AGOA include textiles, apparels, and handicrafts. Under the Generalized System of Preferences, a wide range of Kenya's manufactured products are entitled to preferential duty treatment in the United States, Japan, Canada, New Zealand, Australia, Switzerland, Norway, Sweden, Finland, Austria, and other European countries. In addition, no quantitative restrictions are applicable to Kenyan exports on any of the 3,000-plus items currently eligible for GSP treatment.

Under Negotiation

  1. EAC-EU EPA: The East African Community (Burundi, Kenya, Rwanda, Tanzania, and Uganda) finalised the negotiations for an EPA with the EU on October 16, 2014. Kenya and Rwanda signed the EPA in September 2016, and Kenya has ratified it. For the EPA to enter into force, the three remaining EAC members need to sign and ratify the agreement. EU states are key trade partners and the Economic Partnership Agreement facilitates access to this large market. Exports from Kenya entering the EU are entitled to duty reductions and freedom from all quota restrictions. Trade preferences include duty-free entry of all industrial products as well as a wide range of agricultural products, including beef, fish, dairy products, cereals, fresh and processed fruits, and vegetables.

  2. The AfCFTA is a trade agreement between 44 African Union member states with the goal of creating a single market followed by free movement and a single currency union. The AfCFTA was signed in Kigali, Rwanda on March 21, 2018. Signing the Agreement does not yet establish the AfCFTA. It will function as an umbrella to which protocols and annexes will be added. Once all documents are concluded and ratified by 22 states, the FTA will formally exist. Negotiations will continue in 2018 with Phase II, including Competition Policy, Investment and Intellectual Property Rights. A draft shall be submitted for the January 2020 AU Assembly. Kenya and Ghana were the first countries to deposit the ratification instruments on May 10, 2018 after ratification through their parliaments.

Sources: WTO Regional Trade Agreements database, COMESA, PwC

7. Investment Policy

7.1 Foreign Direct Investment

Graph: Kenya FDI stock
Graph: Kenya FDI stock
Graph: Kenya FDI flow
Graph: Kenya FDI flow

Sources: UNCTAD, Fitch Solutions
Date last reviewed: October 5, 2018

7.2 Foreign Direct Investment Policy

  1. Foreign ownership of financial services and telecommunications companies is capped at 78% and 80%, respectively, though the state permits telecommunications companies three years in which to find local investors to meet the ownership requirements. The Private Security Regulations Act (2016) restricts foreign participation in the private security sector by requiring that at least 25% of shares in private security firms be held by Kenyans.

  2. Kenya Investment Authority (KenInvest) is a statutory body established in 2004 through an Act of Parliament (Investment Promotion Act No. 6 of 2004) with the main objective of promoting investments in Kenya. It is responsible for facilitating the implementation of new investment projects, providing After Care services for new and existing investments, as well as organizing investment promotion activities both locally and internationally. The core functions of KenInvest include; Policy Advocacy; Investment Promotion; Investment Facilitation which includes Investor Tracking and After Care Services.

  3. The minimum foreign investment to qualify for investment incentives is USD100,000.

  4. Foreigners cannot own land in Kenya, though they can lease it in 99-year increments.

  5. Where a company pays dividends out of profits that have not been subject to corporate income tax (CIT), the company will be liable to pay a compensating tax. The compensating tax rate is 42.8%. The aim of this tax is to ensure that all dividends are paid out of profits that have suffered income tax.

  6. The National Construction Authority introduced a construction levy for all construction works that commenced after 6 June 2014. The levy is payable at the rate of up to 0.5% of the contract value of any construction project whose construction value exceeds KES5 million. The levy is in relation to all construction projects relating to buildings, roads, water works, electrical works, and other works that require the service of a contractor.

  7. Every person who carries on a business in Kenya is required to apply for a business permit from the relevant local authority. The business permit is usually based on the size of one's business and is renewable on an annual basis.

  8. The new Mining Act (2016) restricts foreign participation in the mining sector. Among other restrictions, it reserves the acquisition of mineral rights to Kenyan companies, and requires 60% Kenyan ownership of mineral dealerships and artisanal mining companies. Companies providing engineering services in the mining sector must be entities primarily of a Kenyan origin and registered with the designated contracting bodies, or foreign engineering consultants working in collaboration with local entities licenced to provide such engineering services in Kenya. The newly imposed requirements emphasise that expatriate or foreign engineering companies cannot be directly contracted anymore without the consent of the Cabinet Secretary for Mining and the Engineering Board of Kenya.

  9. In scenarios when there are no qualified local Kenyan entities capable of providing the necessary engineering services, the Cabinet Secretary of Mining alongside other relevant regulatory bodies might permit the direct contracting of foreign/expatriate engineering entities to take place. Reconnaissance, retention and prospecting licence holders will also be required to have their exploration reports prepared and signed by a geologist recognised by the Geologists Registration Board of Kenya.

  10. The Kenya Insurance Act (2010) restricts foreign capital investment to two thirds with no single person controlling more than 25% of an insurer's capital. As according to the new regulation, insurance can no longer be placed offshore without the written approval of the Insurance Regulatory Authority of Kenya.

  11. In 2015, the government established regulations requiring that Kenyans own at least 15% of the share capital of derivatives exchanges, through which derivatives such as options and futures can be traded.

  12. Public Procurement – In January 2016, the new Public Procurement and Asset Disposal Act (2015) came into force offering preferences to firms owned by Kenyan citizens and to products manufactured or mined in Kenya. For tenders funded entirely by the government with a value of less than KES50 million (approximately USD500,000), the preference for Kenyan firms and goods is exclusive. Where the procuring entity seeks to contract with non-Kenyan firms or procure foreign goods, the act requires a report detailing evidence of an inability to procure locally. The act also calls for at least 30% of government procurement contracts to go to firms owned by women, youth, and persons with disabilities. The act further reserves 20% of procurement contracts tendered at the county level to residents of that county. With the support of the World Bank and in collaboration with the Kenya ICT Board, the Public Procurement Oversight Authority (PPOA) is developing a web-based Market Price Index to increase transparency in public procurement and implementation of the new act.

  13. Privatisation is carried out through public bidding.

  14. While Kenya's EPZ are focused on encouraging production for export, the not yet fully established SEZs are designed to boost local economies by offering benefits for goods that are consumed both internally and externally. The Second Medium-Term Plan of Kenya's Vision 2030 economic development agenda calls for establishing SEZs in Mombasa, Lamu, Kisumu, and eventually to additional towns throughout the country. A SEZ near Naivasha is also under consideration. It would be located near the Olkaria geothermal power plant where manufacturers would benefit from cheaper and reliable power. The SEZs will allow for a wider range of commercial ventures, including primary activities, such as farming, fishing, and forestry, plus manufacturing, business process outsourcing, and resources supporting science and technology. The SEZs Regulations that came into effect in August 2016 state that the Special Economic Zone Authority (SEZA) must maintain an open investment environment to facilitate and encourage business by the establishment of simple, flexible, and transparent procedures for investor registration. More importantly, new rules also empower county governments to set aside public land for establishment of industrial zones. These are broadly longer-term development goals as the SEZs remain in the planning stage (in 2018).

  15. Businesses operating in the country stand to benefit from a host of other incentivising measures. The Kenyan government provides the right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity. In an effort to encourage foreign investment, Kenya repealed regulations in 2015 that imposed a 75% foreign ownership limitation for firms listed on the Nairobi Securities Exchange, allowing such firms now to be 100% foreign-owned. The Kenyan government also allows all locally financed materials and equipment for use in construction or refurbishment of tourist hotels to be zero-rated for purposes of vat calculation – excluding motor vehicles and goods for regular repair and maintenance. The National Treasury principal secretary, however, must approve such purchases. Aircraft and aircraft parts, tractors, inputs for solar manufacturing, and services relating to goods in transit are fully exempt from VAT.

  16. Qualifying investments exceeding KES200 million incurred outside Nairobi or the municipalities of Mombasa or Kisumu are allowed an investment deduction of 150%. All other qualifying investments are allowed a 100% investment deduction in the year the asset is put into use.

  17. Companies located in an approved EPZ principally to export goods, are taxed at a 0% CIT rate for ten years from its commencement and at a rate of 25% for the next ten years.

  18. Investors in metal manufacturing and products and the hospitality services sectors are able to deduct from their taxes a large portion of the cost of buildings and capital machinery. The government's Manufacturing Under Bond (MUB) program, provides a 100% tax deduction on plant machinery and equipment and raw materials imported for production of goods for export. The program is also open to Kenyan companies producing goods that can be imported duty-free or goods for supply to the armed forces or to an approved aid-funded project.

  19. Telecommunications regulator Communications Authority requires 20% Kenyan shareholding within three years of receiving a license.

Sources: WTO – Trade Policy Review, ITA, US Department of Commerce, PwC, Government websites

7.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
Kenya's EPZ and SEZ offer special incentives for firms operating within their boundaries. By the end of 2015, Kenya had 57 designated EPZs with 89 companies. The proposed Textile City, to be set up at the Athi River EPZ, is expected to attract more than 100 textile investments, but progress on the project has been slow.- Businesses in EPZs must be export-focused and will pay normal tariffs and duties on goods distributed to the domestic market. Companies operating within an EPZ benefit from a 10-year corporate-tax holiday and a 25% tax thereafter.
- A 10-year Withholding Tax (WHT) holiday and Stamp Duty exemption
- 10-year WHT exemption on dividends and remittances paid to non-residents
- 100% investment deduction on capital expenditure for 20 years
- Exemption from customs duties on imported inputs
- VAT exemption on industrial inputs
- Streamlined licensing procedures under EPZ Authority
- Expedited customs procedures
- 24-hour security
 SEZs (proposed)Companies operating in SEZs will receive the following benefits:
- All SEZ supplies of goods and services to companies and developers will be exempted from VAT
- The corporate tax rate for enterprises, developers, and operators will be reduced from 30% to 10% for the first 10 years and 15% for the next 10 years
- Exemption from taxes and duties payable under the Customs and Excise Act (2014), the Income Tax Act (1974), the EAC Customs Management Act (2004), and stamp duty
- Exemption from advertisement and license fees levied by county governments

Sources: US Department of Commerce, Government of Kenya, Fitch Solutions

8. Taxation – 2018


9. Foreign Worker Requirements

9.1 Localisation Requirements

Though there are no strict performance requirements (even in SEZs) - labour regulations generally continue to restrict the employment of foreign nationals, particularly in low-skilled sectors - despite a large increase in the country's migrant population. The National Construction Authority Act (2011) imposes local content restrictions on foreign contractors, defined as companies incorporated outside Kenya or with more than 50% ownership by non-Kenyan citizens. The act requires foreign contractors to enter into subcontracts or joint ventures assuring that at least 30% of the contract work is done by local firms.

9.2 Obtaining Foreign Worker Permits

Work permits are required for all foreign nationals intending to work in Kenya. Recent policy changes also mandate assured income of at least USD24,000 annually for the issuance of a work permit. Firms in agriculture, mining, manufacturing, or consulting sectors can avoid this with a special permit. Work permits are classified in different categories that are in some cases further subdivided into sub-categories. Work permit fees can cost up to USD3,000 and do not distinguish between foreigners and EAC citizens. However, Kenya and Rwanda have exempted EAC citizens from work permit fees. Although businesses may choose to transfer these costs to the employee, other permit costs are less avoidable.

9.3 Special Skills

The Kenyan government issues permits for key senior managers and personnel with special skills not available locally. Firms seeking to hire expatriates must demonstrate that the requisite skills are not available locally through an exhaustive search, although the Ministry of Labour plans to replace this requirement with an official inventory of skills that are not available in Kenya. A permit can cost up to KES200,000. Firms must also sign an agreement with the government describing training arrangements for phasing out expatriates.

9.4 Visa/Travel Restrictions

The Kenyan government encourages investments in sectors that create employment, generate foreign exchange and create forward and backward links with rural areas. Some nationalities are required to have visas for tourist and business visits, although citizens of many African and Caribbean states do not need one. Citizens of the following countries do not require a visa for up to 90-day stays in Kenya (30 days for Kenya and South Africa): The Bahamas, Barbados, Belize, Botswana, Brunei Darussalam, Burundi, Cyprus, Dominica, Fiji, The Gambia, Ghana, Grenada, Jamaica, Kiribati, Lesotho, Maldives, Malawi, Kenya, Malta, Mauritius, Namibia, Nauru, Papua New Guinea, Rwanda, Tanzania, Tonga, Trinidad & Tobago, Tuvalu, Samoa, Seychelles, Sierra Leone, Singapore, Solomon Islands, South Africa, St Kitts and Nevis, St Vincent and the Grenadines, St Lucia, Swaziland, Uganda, Vanuatu, Zambia and Zimbabwe.

9.5 Regional Travel

In addition, residents of the EAC can obtain an East African passport that allows them multiple entries to EAC member states (Kenya, Uganda, Tanzania, Burundi and Rwanda) for renewable six-month periods. The EAC Common Market Protocol also provides for the mutual recognition of academic and professional qualifications. Various professional bodies such as those regulating accounting have developed mutual recognition agreements to enable labour mobility in professional services. In addition, the Inter-University Council for East Africa has developed an East Africa Qualifications Framework to assist with the harmonisation of education and training systems, skills competencies and qualifications.

Sources: Government websites, Fitch Solutions

10. Risks

10.1 Sovereign Credit Ratings

Rating (Outlook)Rating Date
B2 (stable)13/02/2018
Standard & Poor'sB+ (stable)19/11/2010
Fitch RatingsB+ (stable)18/10/2018

Sources: Moody's, Standard & Poor's, Fitch Ratings

10.2 Competitiveness and Efficiency Indicators

World Ranking
Ease of Doing Business Index
Ease of Paying Taxes Index
Logistics Performance Index
Corruption Perception Index
IMD World CompetitivenessN/AN/AN/A

Sources: World Bank, IMD, Transparency International

10.3 Fitch Solutions Risk Indices

World Ranking
Economic Risk Index Rank99/202
Short-Term Economic Risk Score 50.842.3
Long-Term Economic Risk Score 50.5 49.552.3
Political Risk Index Rank115/202
Short-Term Political Risk Score 53.8 45.452.9
Long-Term Political Risk Score 53.9 58.958.9
Operational Risk Index Rank132/201
Operational Risk Score 40.2 39.941.8

Source: Fitch Solutions
Date last reviewed: October 20, 2018

10.4 Fitch Solutions Risk Summary

Kenya's relatively low economic risk ratings are the result of large deficits in its current and fiscal accounts. Furthermore, the shilling is susceptible to periods of high volatility that can feed through into inflation and undermine investor sentiment. That said, Kenya dominates the EAC trade bloc and serves as the region's logistics hub, which will allow it to leverage the region's rising prospects in the coming years.

Kenya is set to consolidate its status as a key regional trade hub and we expect it will become an increasingly attractive location for investment in East Africa in the long term. Our positive medium-long term outlook is supported by the government's commitment to implementing bureaucratic reforms and large-scale infrastructure development projects aimed at boosting regional integration and economic diversification. In addition, Kenya boasts a large and diverse labour pool and deeper financial markets than its regional peers. However, the country performs less competitively on a global scale, largely due to the country's fragile security landscape and the prevalence of corruption. In addition, businesses operating in the country face globally uncompetitive operating costs due to high legal risks, unreliable utilities underscored by considerable infrastructure gaps, as well as increasing levels of government intervention, particularly in the banking sector.

Source: Fitch Solutions
Date last reviewed: October 21, 2018

10.5 Fitch Solutions Political and Economic Risk Indices

Graph: Kenya short term political risk index
Graph: Kenya short term political risk index
Graph: Kenya long term political risk index
Graph: Kenya long term political risk index
Graph: Kenya short term economic risk index
Graph: Kenya short term economic risk index
Graph: Kenya long term economic risk index
Graph: Kenya long term economic risk index

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Economic and Political Risk Indices
Date last reviewed: October 21, 2018

10.6 Fitch Solutions Operational Risk Index

Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Kenya Score41.844.245.4
East Africa Average32.640.733.232.823.6
East Africa Position (out of 11)2321
SSA Average34.838.335.333.532.0
SSA Position (out of 48)9
Global Average49.649.749.9
Global Position (out of 201)132135126

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index

Graph: Kenya vs global and regional averages
Graph: Kenya vs global and regional averages
Operational Risk Index
Labour Market Risk Index
Trade and Investment Risk IndexLogistics Risk IndexCrime and Security Risk Index
South Sudan20.534.421.921.24.5
Regional Averages32.640.732.833.223.6
Emerging Markets Averages46.848.047.545.746.0
Global Markets Averages49.649.7

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: October 20, 2018

11. Hong Kong Connection

11.1 Hong Kong’s Trade with Kenya

Graph: Major export commodities to Kenya (2017)
Graph: Major export commodities to Kenya (2017)
Graph: Major import commodities from Kenya (2017)
Graph: Major import commodities from Kenya (2017)

Note: Graph shows the main Hong Kong exports to/import from Kenya (by consignment)

Graph: Merchandise exports to Kenya
Graph: Merchandise exports to Kenya
Graph: Merchandise imports from Kenya
Graph: Merchandise imports from Kenya

Note: Graph shows Hong Kong exports to/import from Kenya (by consignment)
Exchange Rate HK$/US$, average
7.76 (2013)
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
Source: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: October 20, 2018

Growth rate (%)
Number of Kenyan residents visiting Hong Kong5,976-13.0

Visitor Source: Hong Kong Tourism Board
Date last reviewed: October 21, 2018

11.2 Commercial Presence in Hong Kong

Growth rate (%)
Number of Kenyan companies in Hong KongN/A
- Regional headquarters
- Regional offices
- Local offices

11.3 Treaties and Agreements between Hong Kong and Kenya

Hong Kong has concluded airline income treaties with Kenya.

Source: Fitch Solutions

11.4 Chamber of Commerce (or Related Organisations) in Hong Kong

Honorary Consulate of the Republic of Kenya in Hong Kong
Address: Suite 1201A, 12/F, Tower 1, Admiralty Centre, 18 Harcourt Road, Admiralty, Hong Kong
Email: visasection@kenyaconsulate.org.hk / general@kenyaconsulate.org.hk
Tel: (852) 2520 5000
Fax: (852) 2520 1600

Source: Honorary Consulate of the Republic of Kenya in Hong Kong

11.5 Visa Requirements for Hong Kong Residents

Hong Kong country is not in the exempt country list for Kenya visa, so Kenya visa is required, type of visa:

  • e-Tourist Visa 90 days, single-entry
  • Business Visa 90 days, single-entry
  • Transit Visa 72 hours, single-entry

Application fees:

  • Single Entry Visa (Visit / Business) – USD50
  • Transit Visa – USD20
  • Referred Visa – USD10 as initial reference fee (when a referred visa is approved, the proper visa fee shall be charged)

Source: Honorary Consulate of the Republic of Kenya in Hong Kong

Content provided by Picture: Fitch Solutions – BMI Research
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