Kenya is located along the Indian Ocean and is bordered by Tanzania to the south, Uganda to the west, South Sudan to the northwest, Ethiopia to the north, and Somalia to the northeast. The capital city of Kenya is Nairobi, and the official languages are Swahili and English. The official currency is the Kenya shilling (KES).
Kenya promulgated a new Constitution on 27 August 2010 and carried out its first elections under this new Constitution on 4 March 2013; following which, a new system of government, comprising a national government and devolved system of 47 counties, came into effect.
The 2018 Budget Policy Statement (BPS) set out the government’s priority programmes and reforms to be implemented over the next five years (2018 through 2022). The programmes and policies are anchored under the Medium Term Plan III of the Kenya Vision 2030. These priority programmes will build on the achievements realised under the Economic Transformation Agenda, which has been under implementation since 2014. The implementation of the programmes and policies under the Economic Transformation Agenda has strengthened the resilience of Kenya’s economy and laid a solid foundation for Kenya’s industrialisation as envisaged in the Vision 2030.
Building on the progress made thus far and to accelerate industrialisation, the Kenyan government’s aim is to address the remaining bottlenecks that continue to hold the Kenyan economy from achieving its full potential by focusing on 'The Big Four' Plan over the next five years. As such, 'The Big Four' Plan targets to:
- Support value addition and raise the manufacturing sector’s share of gross domestic product (GDP) to 15% by 2022. This will accelerate economic growth, create jobs, and reduce poverty.
- Focus on initiatives that guarantee food security and nutrition to all Kenyans by 2022 through expansion of food production and supply, reduction of food prices to ensure affordability, and support value addition in the food processing value chain.
- Provide universal health coverage, thereby guaranteeing quality and affordable healthcare to all Kenyans.
- Provide at least 500,000 affordable new houses to Kenyans by 2022, and thereby improve the living conditions for Kenyans.
Kenya’s economy is estimated to have expanded by 5.8% in 2018 compared to a growth of 4.9% in 2017. The slowdown in the performance of the economy in 2017 was partly attributable to a prolonged electioneering period coupled with adverse effects of weather conditions. The global economic recovery experienced in 2018 is expected to continue in 2019, with the World Bank forecasting a further expansion of 5.8% in 2019.
The projected growth in 2019 is based on Kenya’s macroeconomic performance, which has remained broadly stable with overall inflation within target, short-term interest rates remaining low and stable, as well as a stable exchange rate of the Kenya shilling to other currencies.
However, the downside risk to global growth has risen due to elevated policy uncertainty following the recently announced trade measures in the United States on imports from China, suppressed activities in the Euro Area and United Kingdom in early 2018, tighter financial conditions, and high oil import bill among emerging markets and developing economies. Despite the global challenges, growth in sub-Saharan Africa is on the rise due to higher commodity prices and improved capital markets access, with growth expected to accelerate to 3.8% in 2019, up from an estimated 3.1% in 2018.
Kenya participates in several regional initiatives and is a member of the East African Community (EAC), Common Market for Eastern and Southern Africa (COMESA), Intergovernmental Authority on Development (IGAD), and the Commonwealth, amongst others.
PwC in Kenya provides integrated audit, tax, and advisory services across all industries in Kenya. Our Tax Services division provides our clients with a broad range of tax services, including transfer pricing, value-added tax (VAT), customs and excise, corporate tax planning and compliance, personal tax advisory and compliance, reward and remuneration, regulatory compliance and advisory, and immigration services.