Economy
[dropcap]A[/dropcap]griculture remains the largest sector of the Kenyan economy providing a livelihood for approximately 75% of the population and accounting for 20% of GDP while generating 60% of foreign exchange earnings. There is considerable scope, within, the agricultural sector, for diversification and expansion, particularly in the area of non-traditional exports. There is a need, too, for improved agricultural support services in areas like high-quality seed production or the construction of dams and irrigation systems.
Tourism is Kenya’s the second largest foreign exchange earner. The enduring appeal of the country’s scenery, wildlife, climate and tropical coastline has allowed the establishment of a large hotel industry and a sound tourism base. There is a fairly pronounced seasonal pattern with a majority of tourists visiting during the northern hemisphere holiday period (July/August/September) and during the northern winter months (December/January/February). The rainy seasons in April/May and in November reduce the potential for visitors at these times.
Kenya has the best developed hotel industries in sub-Saharan Africa, offering on an average some 31,400 beds per night. This capacity is largely concentrated in Nairobi, the Coast ant the Parks. The high standard of services in Kenya hotels is assisted by the Utalii College which offers training programmes in all aspects of tourism and catering. Its capacity is, unfortunately well below industry requirements and plans are in place to expand it.
The average increase of visitors outstrips the available infrastructure and significant opportunities exist for providers of more specialised resorts, health spas, water-sports facilities and novelty attractions which develop the appeal of spectacular but hitherto relatively little visited parts of the country.
Most foreign investment in Kenya is governed by the Foreign Investments Protection Act (FIPA). Under this law, investments from abroad in particular industries or economic sectors can be granted a Certificate of Approved Enterprises (CAE). This allows for the repatriation of the initial capital investment and the remittance of dividends or interest. Amendments made to the Act in 1988 provide that new investments and capitalised profits can be designated in foreign currency. On disinvestment, balances not available for immediate repatriation can be invested in Government securities for 5 years.
There are no legal limitations on the percentage of foreign ownership but general preference is given to those projects with Kenyan participation, guaranteed export markets , potential for employment of labour , or those with a rural base . Priority sectors are export-oriented ventures, intermediate industry, and agro-processing.
