Geoffrey Odundo: An Overview of the Kenyan Economy and its Main Sectors

Geoffrey Odundo, Chief Executive of the Nairobi Securities Exchange (NSE), gives an overview of the economy in Kenya and explains what are the most relevant sectors boosting the Kenyan economy at the moment.

“Kenya is currently at a very transformative state in terms of economic development. We are seeing accelerated growth in many key sectors. Our economy is projected to grow by 5.9 percent in the next financial year, from 2016 to 2017. A key driver for this economic sector will be telecommunications. We have a very robust telecom sector, largely driven by a growing population, especially among the youth. The penetration rate in the mobile telephone sector is in excess of 23 million Kenyans who are currently using their mobile sets. The biggest story for Kenya in the telecom sector is mobile money. Under the M-PESA platform, we have had a huge e-commerce evolution, especially with making utility payments, and transactions for business and products. This payment system has become a way of life in this country now and is supporting our growth in the telecom sector. Coupled with that is our infrastructure development. We are now in an advanced stage of the standard gauge railway running from Mombasa to the west side of the country. The standard gauge railway will be a major transmission line for goods and services. We will be able to save time. There will be quick delivery not only to Kenya but also to the hinterland surrounding the country. It will save us in infrastructure costs that are currently going towards road maintenance. Even the cost of time for people to move up and down will be greatly reduced. So within the telecom and transport sector we are seeing major growth and very aggressive development. Another sector that is driving the economic growth is the building and construction sector. Walking around Kenya and Nairobi today, there are a number of cranes and construction and buildings coming up. Much of this is being driven by private equity investors that are coming to build commercial and residential properties. Mall developments are also coming up very aggressively. Given the county structure of Kenya today, there has been a lot of urban-rural migration. Normally we have rural-urban migration, but we are seeing now that many people are going to live and work in the counties. This is calling for the development of residential properties and middle class income properties. In the mainstay sectors, such as agriculture, our tea horticulture exports have been growing fairly well. Tourism is also picking up now, even though there were insecurity challenges early and late last year. Today, there is an improvement in security levels. In summary, there has been a general shift upwards in economic growth which is why the predictions are very strong. Kenya is not a commodity country in terms of minerals and oil. So the impact of the oil price reductions are benefitting us because we are a bit insulated. It is our key import so that is why our figures are a bit higher compared to other markets in Africa”, says Geoffrey Odundo.