Page 40

AFRICA MACRO

ANALYSIS AND STRATEGY

Kenya Kenya has great potential, but that potential has yet to be realized. The country has an atrocious reputation concerning corruption, weak protection of property rights, the judiciary is prone to political interference, the customs system is inefficient, regulations can be burdensome, the bureaucracy is inefficient, the port of Mombasa, which is the largest in East Africa, is dysfunctional, copyright protection is often problematic, the infrastructure is inadequate, the shilling is weak and the government owns or holds shares in several financial institutions and, as a result, influences the allocation of credit. An April 2008 survey, conducted by the Kenya Association of Manufacturers (which is the foremost business association), concluded that the business climate is “hostile.” An analysis of the tax system by the World Bank, International Finance Corporation, and PriceWaterhouseCoopers that was released in early December 2008 indicated that Kenya had the least friendly tax regime in East Africa.

2011 Population: 41,943,504 2011 % Change GDP: 5.3 2012 % Change GDP: 6.1 2011 GDP (Billions USD): 36.102 2012 GDP (Billions USD): 40.638 2011 GDP Per Capita (USD) : 882 2012 GDP Per Capita (USD): 965 2011 Inflation: Avg. Consumer Price Change (%): 12.1 2012 Inflation: Avg. Consumer Price Change (%): 7.4 2011 Current Account Balance (% of GDP): -8.9 2012 Current Account Balance (% of GDP): -8.5

Kenya’s image was severely tarnished by the fraudulent election of December 2007 that sparked a wave of brutal tribal violence which killed about 800 people and displaced 600,000. A national unity government was formed following the violence and a new constitution was written. It was approved in a referendum in August 2010. The next Presidential election is scheduled for August 14. Kenya’s economic fundamentals are poor. Inflation was 17.3% in the year to September and the IMF is projecting the current account deficit will be 8.9% of GDP in 2011 and the gross government budget shortfall will be 5.9% of GDP. The economic picture, however, is not totally bleak. Despite all of its problems and the difficulties of doing business, the economy still managed to grow at a 4.2% average annual rate between 2002 and 2011. Kenya has one of the most developed financial sectors in Africa, its stock exchange is the eighth largest in terms of capitalization on the continent, Nairobi is the regional headquarters for many multinational companies and cell phone use is above the African average. th Kenya is the ninth most populous nation in Africa and the 11 largest economy in Africa. It is too big to ignore.

Source: IMF, all 2012 data are forecasts

Joab’s Technologies and Research, Natu Court Flat B.

Page 40 of 104

Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  

Economic analysis of Africa as a whole, as well as of particular countries and sectors, with special regard to their potential as investment...

Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  

Economic analysis of Africa as a whole, as well as of particular countries and sectors, with special regard to their potential as investment...

Advertisement