Kenya: Current Situation

Now, to take a look at the recent political and economic situation to give more context to our
thinking.

Politically, Kenya currently has one of the more stable systems in the area, however, Kenya has had a host of its own problems. Largely dominated by a single party system until the 1990’s Kenya has only recently started open and fair elections. 2002 marked the end of a 24-year rule by a single person/party. The 2002 elections were a huge step in a less corrupt election and allowed the incoming president to make some real strides in changing policies because of a strong public backing. After a great start, the 2002 presidency lost legitimacy and another election took place in 2007. The 2007 election was a disaster and lead to claims of the current president rigging the election votes. This caused mass protesting and fighting between tribes. These protest ended with over 1,000 deaths and left much turmoil behind. One of the solutions for change during this time was the re-establishment of the prime minister; this took place in 2008. Then Kenyan’s voted and passed new changes to the constitution, adding more checks and balances to their government system in 2010.

Kenya is the most stable economy in East Africa. In 2002 Kenya not only saw a change in the political environment but also saw a large economic recovery. At the same time that the economy of Kenya was increasing from 2002 to 2007, large disparities in equalities were also increasing. Kenya saw the rich get richer and the poor stay poor, corruption reached new levels, crime in the urban areas increased, and tribal feuds got worse. After the post-election violence in 2007 the economy also took a downturn. This downturn was worsened by the drought and the larger global economic downturn. The government helped to stimulate the economy again in 2008 with the privatization of some large companies such as the electric company and a large phone service provider. The government has in place a plan with goals for a 2030 Kenya but has many more steps to take to get to an improved Kenya. Kenya also saw in 2009 an increase in exports from crops and an increase in tourism, which has helped to increase the economic
situation. A key safety net for a large portion of Kenyan families, despite the increase in work and economic situation of the country, is remittances from abroad. The Kenyan economy is expected to grow another 5% in 2011 according to the World Bank. Kenya has also become a major player in the cell phone industry, participating in an innovative new market tool called mobile money. Mobile money allows people to transfer money to others and pay their bills through their cell phones. This has greatly impacted the economy and is expected to continue to positively impact the economy. A large majority of these new economic breakthroughs have been caused by constitutional changes (the government releasing power over companies) and as more constitutional changes take effect after the 2010 election, we should see a continued positive growth in the Kenyan economy.

Kenya receives a lot of outside foreign aid. China, Russia and a variety of Western countries have poured aid into Kenya. Currently, as much as 60% of all industry in Kenya is still owned by foreign interests. Kenya is also receiving a significant amount of investment from the World Bank and the European Development Fund. A significant amount for Kenyan dependence on foreign investment can be linked back to the end of British colonization. During the transition to independence, a lot of corrupt asset transfers occurred by the British, which destined Kenya for dependence on foreign aid and sent a large majority of the population into poverty. The US has had a relationship with Kenya since its independence and it is expected that the relationship will only strengthen as the Kenyan people have passed the new constitution and are moving more towards a democracy like that of the US government.

Information from:

https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/KENYAEXTN/
0,,contentMDK:22600594~pagePK:141137~piPK:141127~theSitePK:356509,00.html

http://www.state.gov/r/pa/ei/bgn/2962.htm

http://en.wikipedia.org/wiki/History_of_Kenya#Moi_regime.2C_1978-2002

http://en.wikipedia.org/wiki/Economy_of_Kenya#Foreign_economic_relations

http://www.businessweek.com/news/2010-06-08/u-s-to-boost-kenya-investment-after-new-
constitution-update1-.html