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Kenya vs. Uganda

Economy

KenyaUganda
Economy - overviewKenya is the economic, financial, and transport hub of East Africa. Kenya’s real GDP growth has averaged over 5% for the last eight years. Since 2014, Kenya has been ranked as a lower middle income country because its per capita GDP crossed a World Bank threshold. While Kenya has a growing entrepreneurial middle class and steady growth, its economic and development trajectory could be impaired by weak governance and corruption. Although reliable numbers are hard to find, unemployment and under-employment are extremely high, and could be near 40% of the population.

Agriculture remains the backbone of the Kenyan economy, contributing one-third of GDP. About 75% of Kenya’s population of roughly 44.2 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production.

Inadequate infrastructure continues to hamper Kenya’s efforts to improve its annual growth to the 8%-10% range so that it can meaningfully address poverty and unemployment. The KENYATTA administration has been successful in courting external investment for infrastructure development. International financial institutions and donors remain important to Kenya's economic growth and development, but Kenya has also successfully raised capital in the global bond market. Kenya issued its first sovereign bond offering in mid-2014. Nairobi has contracted with a Chinese company to construct a new standard gauge railway connecting Mombasa and Nairobi, with completion expected in June 2017. In 2013, the country adopted a devolved system of government with the creation of 47 counties, and is in the process of devolving state revenues and responsibilities to the counties. Inflationary pressures and sharp currency depreciation peaked in early 2012 but have since abated following low global food and fuel prices and monetary interventions by the Central Bank. Drought-like conditions in parts of the country have pushed 2017 inflation above 8%. Chronic budget deficits, including a shortage of funds in mid-2015, hampered the government’s ability to implement proposed development programs, but the economy is back in balance with many indicators, including foreign exchange reserves, interest rates, and FDI moving in the right direction. Underlying weaknesses were exposed in the banking sector in 2016 when the government was forced to take over three small and undercapitalized banks. In 2016, the government enacted legislation that limits interest rates banks can charge on loans and set a rate that banks must pay their depositors. This measure led to a sharp shrinkage of credit in the economy.

Tourism holds a significant place in Kenya’s economy. A spate of terrorist attacks by the Somalia-based group al-Shabaab reduced international tourism earning after their deadly 2013 attack on Nairobi’s Westgate mall, which killed 67 people, but the sector is now recovering. In 2016, tourist arrivals grew by 17% while revenues from tourism increased by 37%.
Uganda has substantial natural resources, including fertile soils, regular rainfall, small deposits of copper, gold, and other minerals, and recently discovered oil. Agriculture is the most important sector of the economy, employing more than one-third of the work force. Coffee accounts for the bulk of export revenues. Uganda has a small industrial sector that is dependent on imported inputs like oil and equipment. Overall productivity is hampered by a number of supply-side constraints, including underinvestment in an agricultural sector that continues to rely on rudimentary technology. Industrial growth is impeded by high-costs due to poor infrastructure, low levels of private investment, and the depreciation of the Ugandan shilling.

Since 1986, the government - with the support of foreign countries and international agencies - has acted to rehabilitate and stabilize the economy by undertaking currency reform, raising producer prices on export crops, increasing prices of petroleum products, and improving civil service wages. The policy changes were especially aimed at dampening inflation while encouraging foreign investment to boost production and export earnings. Since 1990, economic reforms ushered in an era of solid economic growth based on continued investment in infrastructure, improved incentives for production and exports, lower inflation, and better domestic security.

The global economic downturn in 2008 hurt Uganda's exports; however, Uganda's GDP growth has recovered due to past reforms and a rapidly growing urban consumer population. Oil revenues and taxes are expected to become a larger source of government funding as production starts in the next five to 10 years. However, lower oil prices since 2014 and protracted negotiations and legal disputes between the Ugandan government and oil companies may prove a stumbling block to further exploration and development.

Uganda faces many economic challenges. Instability in South Sudan has led to a sharp increase in Sudanese refugees and is disrupting Uganda's main export market. High energy costs, inadequate transportation and energy infrastructure, insufficient budgetary discipline, and corruption inhibit economic development and investor confidence. Between 2015 and 2017, the Uganda shilling depreciated 50% against the dollar.

The budget is dominated by energy and road infrastructure spending, while relying on donor support for long-term drivers of growth, including agriculture, health, and education. The largest infrastructure projects are externally financed through low-interest concessional loans. As a result, debt servicing for these loans is expected to rise.
GDP (purchasing power parity)$163.4 billion (2017 est.)
$155.6 billion (2016 est.)
$147 billion (2015 est.)
note: data are in 2017 dollars
$88.61 billion (2017 est.)
$84.84 billion (2016 est.)
$82.91 billion (2015 est.)
note: data are in 2017 dollars
GDP - real growth rate5% (2017 est.)
5.8% (2016 est.)
5.7% (2015 est.)
4.4% (2017 est.)
2.3% (2016 est.)
5.7% (2015 est.)
GDP - per capita (PPP)$3,500 (2017 est.)
$3,400 (2016 est.)
$3,300 (2015 est.)
note: data are in 2017 dollars
$2,400 (2017 est.)
$2,300 (2016 est.)
$2,300 (2015 est.)
note: data are in 2017 dollars
GDP - composition by sectoragriculture: 35%
industry: 17.6%
services: 47.7% (2017 est.)
agriculture: 24.5%
industry: 23.2%
services: 52.3% (2017 est.)
Population below poverty line43.4% (2012 est.)
19.7% (2013 est.)
Household income or consumption by percentage sharelowest 10%: 1.8%
highest 10%: 37.8% (2005)
lowest 10%: 2.4%
highest 10%: 36.1% (2009 est.)
Inflation rate (consumer prices)8% (2017 est.)
6.3% (2016 est.)
5.8% (2017 est.)
5.5% (2016 est.)
Labor force19.82 million (2017 est.)
20.05 million (2017 est.)
Labor force - by occupationagriculture: 61.1%
industry: 6.7%
services: 32.2% (2005 est.)
agriculture: 71.9%
industry: 4.4%
services: 23.7% (2013 est.)
Unemployment rate40% (2013 est.)
40% (2001 est.)
9.4% (2013 est.)
Distribution of family income - Gini index42.5 (2008 est.)
44.9 (1997)
39.5 (2013)
45.7 (2002)
Budgetrevenues: $15.37 billion
expenditures: $20.18 billion (2017 est.)
revenues: $4.019 billion
expenditures: $5.268 billion (2017 est.)
Industriessmall-scale consumer goods (plastic, furniture, batteries, textiles, clothing, soap, cigarettes, flour), agricultural products, horticulture, oil refining; aluminum, steel, lead; cement, commercial ship repair, tourism
sugar processing, brewing, tobacco, cotton textiles; cement, steel production
Industrial production growth rate7% (2017 est.)
6.5% (2017 est.)
Agriculture - productstea, coffee, corn, wheat, sugarcane, fruit, vegetables; dairy products, beef, fish, pork, poultry, eggs
coffee, tea, cotton, tobacco, cassava (manioc, tapioca), potatoes, corn, millet, pulses, cut flowers; beef, goat meat, milk, poultry, and fish
Exports$6.397 billion (2017 est.)
$5.747 billion (2016 est.)
$3.172 billion (2017 est.)
$2.921 billion (2016 est.)
Exports - commoditiestea, horticultural products, coffee, petroleum products, fish, cement
coffee, fish and fish products, tea, cotton, flowers, horticultural products; gold
Exports - partnersUganda 10.1%, Tanzania 8.6%, US 7.7%, Netherlands 7.4%, UK 7.3%, UAE 4.6%, Pakistan 4.5% (2016)
Kenya 20.9%, UAE 11.2%, Rwanda 9.5%, Democratic Republic of the Congo 8.9%, Italy 4.5% (2016)
Imports$14.52 billion (2017 est.)
$13.64 billion (2016 est.)
$4.592 billion (2017 est.)
$4.326 billion (2016 est.)
Imports - commoditiesmachinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastics
capital equipment, vehicles, petroleum, medical supplies; cereals
Imports - partnersChina 24.1%, India 11.2%, UAE 7.7%, Japan 5.4% (2016)
China 17.9%, India 17.2%, UAE 9.5%, Kenya 9.2%, Japan 5.2%, South Africa 4.5%, Saudi Arabia 4.4% (2016)
Debt - external$24.99 billion (31 December 2017 est.)
$22.6 billion (31 December 2016 est.)
$7.163 billion (31 December 2017 est.)
$6.408 billion (31 December 2016 est.)
Exchange ratesKenyan shillings (KES) per US dollar -
104 (2017 est.)
101.504 (2016 est.)
101.504 (2015 est.)
98.179 (2014 est.)
87.921 (2013 est.)
Ugandan shillings (UGX) per US dollar -
3,606 (2017 est.)
3,420.1 (2016 est.)
3,420.1 (2015 est.)
3,234.1 (2014 est.)
2,599.8 (2013 est.)
Fiscal year1 July - 30 June
1 July - 30 June
Public debt52.6% of GDP (2017 est.)
53.5% of GDP (2016 est.)
38.2% of GDP (2017 est.)
37.8% of GDP (2016 est.)
Reserves of foreign exchange and gold$7.592 billion (31 December 2017 est.)
$7.601 billion (31 December 2016 est.)
$3.045 billion (31 December 2017 est.)
$3.034 billion (31 December 2016 est.)
note: excludes gold
Current Account Balance-$4.75 billion (2017 est.)
-$3.653 billion (2016 est.)
-$1.476 billion (2017 est.)
-$1.09 billion (2016 est.)
GDP (official exchange rate)$78.4 billion (2016 est.)
$26.39 billion (2016 est.)
Stock of direct foreign investment - at home$6.196 billion (31 December 2017 est.)
$5.317 billion (31 December 2016 est.)
$NA
Stock of direct foreign investment - abroad$NA (31 December 2017 est.)
$NA (31 December 2016 est.)
$NA
Market value of publicly traded shares$26.16 billion (31 December 2014 est.)
$22.09 billion (31 December 2013 est.)
$14.79 billion (31 December 2012 est.)
$7.294 billion (31 December 2012 est.)
$7.727 billion (31 December 2011 est.)
$1.788 billion (31 December 2011 est.)
Central bank discount rate11.5% (20 January 2016)
7% (31 December 2010)
14% (December 2014)
17% (30 March 2016)
Commercial bank prime lending rate14.3% (31 December 2017 est.)
16.58% (31 December 2016 est.)
19.1% (31 December 2017 est.)
23.89% (31 December 2016 est.)
Stock of domestic credit$36.59 billion (31 December 2017 est.)
$29.88 billion (31 December 2016 est.)
$4.772 billion (31 December 2017 est.)
$3.989 billion (31 December 2016 est.)
Stock of narrow money$13.03 billion (31 December 2017 est.)
$12.77 billion (31 December 2016 est.)
$2.543 billion (31 December 2017 est.)
$2.167 billion (31 December 2016 est.)
Stock of broad money$29.29 billion (31 December 2017 est.)
$22.86 billion (31 December 2016 est.)
$4.331 billion (31 December 2017 est.)
$3.674 billion (31 December 2016 est.)
Taxes and other revenues19.6% of GDP (2017 est.)
15.2% of GDP (2017 est.)
Budget surplus (+) or deficit (-)-6.1% of GDP (2017 est.)
-4.7% of GDP (2017 est.)
GDP - composition, by end usehousehold consumption: 77%
government consumption: 13.7%
investment in fixed capital: 17.1%
investment in inventories: -0.1%
exports of goods and services: 13.9%
imports of goods and services: -21.7% (2017 est.)
household consumption: 71.7%
government consumption: 10%
investment in fixed capital: 23.9%
investment in inventories: 0.3%
exports of goods and services: 18.8%
imports of goods and services: -24.7% (2017 est.)
Gross national saving15.4% of GDP (2017 est.)
15.5% of GDP (2016 est.)
10.9% of GDP (2015 est.)
19.8% of GDP (2017 est.)
20.1% of GDP (2016 est.)
17.7% of GDP (2015 est.)

Source: CIA Factbook