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Contact at AFI team is Enoch Randy Aikins
This entry was last updated on 24 August 2022 using IFs v7.63.

In this entry, we first describe the Current Path forecast for Kenya as it is expected to unfold to 2043, the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term vision for Africa.

The Current Path forecast is divided into summaries on demographics, economics, poverty, health/WaSH and climate change/energy. A second section then presents a single positive scenario for potential improvements in stability, demographics, health/WaSH, agriculture, education, manufacturing/transfers, leapfrogging, free trade, financial flows, infrastructure, governance and the impact of various scenarios on carbon emissions. With the individual impact of these sectors and dimensions having been considered, a final section presents the impact of the Combined Agenda 2063 scenario.

We generally review the impact of each scenario and the Combined Agenda 2063 scenario on gross domestic product (GDP) per person and extreme poverty, except for Health/WaSH, which uses life expectancy and infant mortality.

The information is presented graphically and supported by brief interpretive text.

All US$ numbers are in 2017 values.

Summary

  • Current Path forecast
    • Kenya is a lower middle-income country in East Africa with an estimated population of 52.8 million in 2019. Life expectancy in Kenya is around 68.5 years. The country has a high disease burden from both communicable and non-communicable diseases. Kenya’s GDP per capita in 2019 stood at US$3 454, and about 24.6 million people lived below the benchmark poverty line of US$3.20 for lower middle-income countries. Jump to forecast: Current Path
    • Kenya’s population is set to increase to 84.2 million people by 2043. Urbanisation will increase, but the country will not achieve parity in rural–urban settlement and by 2043, only 39.9% of the population is expected to reside in urban areas. Jump to Demographics: Current Path
    • GDP is expected to increase significantly, reaching US$235.5 billion by 2043. GDP per capita will be at US$5 696 by then. The size of the informal sector is set to decrease and will likely contribute 19.4% to GDP by 2043, down from 21.6% in 2019. The reliance on the service sector for job creation will increase, and the sector is expected to grow its contribution to GDP to US$133.1 billion (56.5%). Jump to Economics: Current Path
    • By 2043, 18.1 million people (21.5% of the population) are expected to live below the poverty threshold of US$3.20. Jump to Poverty: Current Path
    • Carbon emissions are expected to reach 9.7 million tons by 2043. Jump to Carbon emissions/Energy: Current Path
  • Sectoral scenarios
    • The Stability scenario will improve Kenya’s score on the governance security index to 0.88 in 2043, and simultaneously increase GDP per capita to US$5 842, reducing the proportion of people living below the poverty line to 20.5% of the population. Jump to Stability scenario
    • Kenya will achieve its demographic dividend by 2029 in the Demographic scenario and increase GDP per capita to US$5 962. Jump to Demographic scenario
    • The Health/WaSH scenario will increase life expectancy to 75.5 years by 2043 and reduce infant mortality to 14.4 per 1 000 live births. Jump to Health/Wash scenario
    • In the Agriculture scenario, Kenya’s yield per hectare will rise to 9 metric tons. However, the country will remain a net importer of agricultural products, with an import dependency of 14.4% by 2043. Jump to Agriculture scenario
    • The Education scenario will result in GDP per capita being at US$5 878 by 2043. The poverty rate will decline to 19.7% of the population. Jump to Education scenario
    • In the Manufacturing/Transfers scenario, government welfare transfers to households will increase to US$31.2 billion by 2043. Jump to Manufacturing/Transfers scenario
    • The Leapfrogging scenario will increase mobile broadband subscriptions from 56.6 per 100 people in 2019 to 152 by 2043. Access to electricity will increase to 95.2% of the population. Jump to Leapfrogging scenario
    • In the Free Trade scenario, GDP per capita will increase to US$6 429 by 2043, and the proportion of poor people in Kenya will reduce to 17.4% of the population. Jump to Free Trade scenario
    • The Financial Flows scenario will increase the amount of foreign aid as a percentage of GDP, while decreasing the contribution of FDI to Kenya’s economy to 1.52% by 2043. Jump to Financial Flows scenario
    • The Infrastructure scenario will increase the percentage of the rural population living within 2 km of an all-weather road to 67.7% by 2043. Jump to Infrastructure scenario
    • The Governance scenario will increase GDP per capita to US$5 824 by 2043. Jump to Governance scenario
    • While Kenya’s carbon emissions are projected to increase in all scenarios, Free Trade will have the greatest effect, resulting in 11.5 million tons of carbon being emitted by 2043. Jump to Impact of scenarios on carbon emissions
  • Combined Agenda 2063 scenario  
    • GDP per capita is set to increase to US$9 014 by 2043, with the Free Trade and Agriculture scenarios having the greatest impact. The economy is expected to grow to US$428.3 billion by 2043, compared with a projection of US$235.5 billion in the Current Path forecast. In the Combined Agenda 2063 scenario, only 3.8 million people (4.8% of the population) are expected to live below the poverty line. The scenario forecasts a significant increase in carbon emissions, reaching 9.7 million tons by 2043. Jump to Combined Agenda 2063 scenario

All charts for Kenya

Chart 1: Political map of Kenya
Chart
Kenya: Current Path forecast

Kenya: Current Path forecast

This page provides an overview of the key characteristics of Kenya along its likely (or Current Path) development trajectory. The Current Path forecast from the International Futures forecasting (IFs) platform is a dynamic scenario that imitates the continuation of current policies and environmental conditions. The Current Path is therefore in congruence with historical patterns and produces a series of dynamic forecasts endogenised in relationships across crucial global systems. We use 2019 as a standard reference year and the forecasts generally extend to 2043 to coincide with the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term development vision.

Kenya, a lower middle-income country in East Africa, is bordered by South Sudan to the north-west, Ethiopia to the north, Somalia to the east, Uganda to the west, Tanzania to the south, and the Indian Ocean to the south-east. As a member of the Intergovernmental Authority on Development (IGAD), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA), Kenya is a critical commercial hub on the continent and its economy is the largest in eastern Africa. It is also the third largest economy in sub-Saharan Africa. The official languages of the country are English and Swahili, despite a number of different ethnicities.  

The country covers an area of 580 367 km2 and had a population of about 52.8 million in 2019. Its geography and climate vary widely, including cold, snow-capped mountaintops, vast forests with abundant wildlife, fertile agricultural regions and temperate climates in western and Rift Valley counties, arid and semi-arid areas that are less fertile, and absolute deserts.  

Kenya transitioned from a de jure one-party state in 1982 to a multiparty political system in 1992, with elections held every five years. Administratively, it is divided into 47 semi-autonomous counties that are headed by governors. The capital of Kenya and its largest city is Nairobi, but there are also other significant and large cities, such as Mombasa (the oldest city and original capital), Kisumu City, Nakuru and Eldoret. 

Some of the agricultural commodities produced in Kenya include corn, tea, coffee, rice, wheat, sugar, livestock, cut flowers and vegetables. Principal exports from Kenya include tea, cut flowers, refined petroleum, gold and coffee.

Chart 1: Political map of Kenya
Chart
Demographics: Current Path

Demographics: Current Path

In 2019, Kenya was the third most populous country in East Africa and the seventh most populous in Africa. The population had more than doubled between 1990 and 2019, increasing from 23.7 million to 52.57 million. On the Current Path, the population of the country is projected to rise to 84.2 million by 2043, equivalent to an increase of 60.2%. At that point Kenya will be the sixth most populous country in Africa, having overtaken Uganda. 

Although Kenya’s population growth rate has declined from 3.4% per annum in 1990 to 2.5% in 2019 and is set to decline to 1.3% by 2043, population growth is still very rapid because of the country’s youthful population. In 2019, 39.1% of Kenya’s population was below the age of 15 years, 28.9% in the age group 15–30 years and 29% aged 30–65. The large youthful population poses a potential challenge for youth employment in the country. In 2016, the unemployment rate among people between 15 and 24 years was five times the national rate, with an annual influx of an estimated 800 000 people into the labour market.[1Institute of Economic Affairs Kenya, Youth unemployment in Kenya: Policy gaps analysis, 17 January 2020.] A high unemployment rate like this can be a catalyst for potential instability in the country. By 2043, the median age is expected to increase to 27.5 years, and the proportion of people under the age of 15 will decline to 27.9%. Consequently, the share of the adult population aged 30 years and older will increase from 32% in 2019 to 46% by 2043. 

However, Kenya’s total fertility rate is decreasing more rapidly than the average for lower middle-income countries in Africa, and is expected to decline from 3.5 births per woman in 2019 to 2.2 by 2043. As a result, Kenya’s youth bulge (the portion of its adult population below 29 years of age) is also declining more rapidly than its peer group. In 2019, it stood at about 47.5%, with a median age of 19.9, but is set to decline to 36.3% and a median age of 27.5 years by 2043.

Kenya has a large rural population. In 1990, 19.8 million Kenyans, constituting 83.3% of the total population, lived in rural areas. By 2019, this figure had declined to about 72.6%, representing a 10.7 percentage point decline and equivalent to 38.5 million people. This suggests that the country has experienced slower urbanisation than most African countries. Even by 2043, the country will not achieve rural–urban parity, with 60% of its population expected to still be living in rural areas. 


Some of the drivers of urbanisation in Kenya include the pursuit of employment and social amenities, which are more readily available in urban areas. Some internal migration from the north-eastern part of the country neighbouring Somalia to urban centres has also been because of instability in that region.[2Kenyaplex, Rural to urban migration in Kenya, 27 June 2013.] On the Current Path, the rural proportion is expected to represent 60.1% of the population (50.6 million people) by 2043, a decline by 12.5 percentage points from the 2019 figure. Although Kenya will proportionally still have a larger rural population than many other countries in the region by then, its urbanisation is speeding up.

The total land area of Kenya is approximately 580 367 km². It was the ninth most densely populated country in East Africa and 18th most densely populated country in Africa by 2019. By 2019, the estimated population density was 0.93 per hectare, which was much higher than the average for Africa (0.45 per hectare) and East Africa (0.64 per hectare). 

The capital, Nairobi, is the most populous city in the country, with an estimated population of about 3 million people.[3Statista, Population of Kenya by largest cities.] The county of Nairobi has a population density of 4 515 people/km2, followed by Mombasa (4 292 people/km2). In contrast, the county of Marsabit has a population of only approximately 290 000 people.[4P Vidija, Nairobi, Mombasa and Vihiga counties most densely populated - Census, The Star, 21 February 2020.]

Chart 4: Population density map for 2019
Chart
Economics: Current Path

Economics: Current Path

Kenya has the largest and most diverse economy in East Africa. Its GDP almost tripled between 1990 and 2019, going from US$23.4 billion to US$70.1 billion. In this period, the average annual GDP growth rate was about 3.5%. The government instituted economic reform and liberalisation activities since 1993, such as removing exchange rate and price controls, privatising state-owned enterprises and adopting conservative fiscal and monetary policies. This resulted in average annual growth above 4% between 1994 and 1996. However, the economy has slowed down since 1997, partly owing to adverse weather conditions and the inability of the government to meet its commitment on governance reforms required by the International Monetary Fund (IMF), which led to IMF lending facilities and a US$90 million structural adjustment credit facility from the World Bank being suspended for three years. The government subsequently undertook reforms such as establishing the Kenyan Anti-Corruption Commission, which led to the IMF and World Bank support and programmes being restored. 

Growth improved again between 2003 and 2008, mainly owing to reforms that increased government revenue and reduced national debts, releasing more funds for development projects. However, post-election violence in 2008 further slowed down the economy which was already affected by the global financial crisis of 2007/08 and earlier droughts. 

On the Current Path, the country’s GDP is expected to reach US$235.5 billion in 2043, up from US$70.1 billion in 2019, constituting an increase of 236%.

Although many of the charts in the sectoral scenarios also include GDP per capita, this overview is an essential point of departure for interpreting the general economic outlook of Kenya.

From 1990 to 2019, Kenya's GDP per capita increased by US$895, from US$2 559 to US$3 454, equivalent to an increase of 35%. Although the average GDP growth was about 3.5% over the period, population growth in the same period was 2.8%. However, despite rapid growth, Kenya’s GDP per capita has grown more slowly than the average for lower middle-income countries in Africa, which increased from US$4 423 in 1990 to US$6 989 in 2019. As a result, the gap between the two is widening. Whereas the GDP per capita of Kenya was 58% of the average for lower middle-income Africa in 1990, it fell to 50% in 2019.  

With the projected increase in GDP and reduction in population growth, GDP per capita is set to reach US$5 696 by 2043, although this will be below the Current Path average of US$9 142 for lower middle-income countries in Africa.

The Kenya Vision 2030 underscores the importance of the informal sector in creating employment and driving the growth and productivity of the country. Over 80% of all jobs are created in the informal sector, and about 41% of youth employment occurs in this sector.[5Institute of Economic Affairs Kenya, Youth unemployment in Kenya: Policy gaps analysis, 17 January 2020. ] The size of the Kenyan informal sector amounted to US$13.9 billion in 2019, equivalent to 21.6% of GDP, which was below the average of 29.2% for lower middle-income African countries. This means that in terms of formalisation of the economy, Kenya is performing better than its income peers on the continent, despite facing some challenges. The country’s First Medium Term Plan (MTP I, 2008-2012) under the Vision 2030 identified low productivity, limited technological transfer, inadequate market access, information asymmetry and poor health and occupational safety measures as factors hindering the growth of the informal economy 

On the Current Path, the size of the informal economy will increase to US$41.9 billion by 2043, although its contribution to GDP will have declined to 19.4% of GDP by then. The number of people employed by the informal sector as a percentage of total labour will decline from 38.3% in 2019 to 31.5% in 2043 and the informal economy’s contribution to GDP will subsequently also decline over this period. The size of the informal sector in Kenya will be 7 percentage points lower than the Current Path average of 26.4% for lower middle-income African countries.

The IFs platform uses data from the Global Trade and Analysis Project (GTAP) to classify economic activity into six sectors: agriculture, energy, materials (including mining), manufactures, services and information and communications technology (ICT). Most other sources use a threefold distinction between only agriculture, industry and services with the result that data may differ.

By 2019, the three largest contributors to GDP in Kenya were services, agriculture and manufacturing. The service sector contributed US$34.3 billion, equivalent to 48.9% of GDP. This is expected to almost quadruple, to US$133.1 billion, by 2043, which will represent 56.5% of GDP. The agriculture sector, which is currently the second largest contributor to GDP, contributed US$20.9 billion, equivalent to about 30% of GDP. Manufacturing contributed US$8.6 billion (12.3% of GDP) in 2019. 

By 2043, the manufacturing sector will overtake agriculture as the second largest contributor and contribute 5.7 percentage points more. This will correspond to contributions of US$43.6 billion and US$30.2 billion for manufacturing and agriculture, respectively. The growth in the share of manufacturing relative to agriculture is consistent with the economic transformation of an economy and can lead to job creation. However, the decline in the agriculture sector raises concerns about Kenya’s future food security.

The data on agricultural production and demand in the IFs forecasting platform initialises from data provided on food balances by the Food and Agricultural Organization (FAO). IFs contains data on numerous types of agriculture, but aggregates its forecast into crops, meat and fish, presented in million metric tons. Chart 9 shows agricultural production and demand as a total of all three categories.

Agriculture forms an integral part of the Kenyan economy, serving as a source of livelihood for about 40% of the population and 70% of rural dwellers.[6 International Trade Administration, Kenya - Country commercial guide, 13 September 2021.] Total agricultural land was 28 million hectares in 2019, constituting over 48% of the total land in the country.[7Statista, Agricultural land in Kenya from 2010 to 2019.] Challenges facing the sector in Kenya include a poor infrastructure network in the rural areas, poor climatic conditions and the over-reliance on maize as the dominant food crop. 

Some of the agricultural commodities produced in Kenya include corn, tea, coffee, rice, wheat, sugar, livestock, cut flowers and vegetables. In 1990, agricultural production in Kenya exceeded domestic demand by 310 000 metric tons, meaning that the country had a surplus of agricultural commodities and was technically food sufficient. However, since then, domestic demand has outgrown production, and by 2019, agricultural demand exceeded domestic production by 4.5 million metric tons. The increased food insecurity in the country according to a 2018 UNICEF report was a result of severe drought conditions. Although yield per hectare is projected to increase from 4.7 to 6.2 metric tons between 2019 and 2043 and thereby increasing domestic production to 53.2 million metric tons, it will still not be enough to meet domestic demand: by 2043, agricultural demand will surpass domestic production by 20.3 million metric tons (38%). This means that the country faces the risk of food shortages in the future if drastic measures are not adopted to revamp the agriculture sector and to increase domestic production.

Poverty: Current Path

Poverty: Current Path

There are numerous methodologies and approaches to defining poverty. We measure income poverty and use GDP per capita as a proxy. In 2015, the World Bank adopted the measure of US$3.20per person a day (in 2011 international prices), also used to measure progress towards the achievement of Sustainable Development Goal 1 of eradicating extreme poverty. To account for extreme poverty in richer countries occurring at slightly higher levels of income than in poor countries, the World Bank introduced three additional poverty lines in 2017:

  • US$3.20 for lower middle-income countries
  • US$5.50 for upper middle-income countries
  • US$22.70 for high-income countries.

Kenya is a lower middle-income country, and therefore uses the US$3.20 benchmark for extreme poverty. In 2019, 24.6 million Kenyans lived below this threshold, equivalent to 46.5% of the population. The high levels of poverty in the country have been attributed to long-lasting corruption in the form of bribery, fraud and tribal favouritism within the government.[8E Ray, Why is Kenya poor? Looking at poverty in Kenya, The Borgen Project, 8 August 2017. ] The number of people in extreme poverty is set to peak at 26.9 million by 2029, before starting to decline. By 2043, the number of people in extreme poverty in Kenya is expected to stand at 18.1 million, constituting 21.5% of the population. This corresponds to a decrease of 25 percentage points in the number of poor people over 24 years. The proportion of poor people in Kenya is lower than the average for lower middle-income countries in Africa throughout the forecast period, such that by 2043, the poverty rate in Kenya will be 16.8 percentage points lower than the projected Current Path average of 38.3 % for lower middle-income countries in Africa.

Carbon Emissions/Energy: Current Path

Carbon Emissions/Energy: Current Path

The IFs platform forecasts six types of energy, namely oil, gas, coal, hydropower, nuclear and other renewables. To allow comparisons between different types of energy, the data is converted into billion barrels of oil equivalent. The energy contained in a barrel of oil is approximately 5.8 million British thermal units (MBtus) or 1 700 kilowatt-hours (kWh) of energy.

Kenya relies greatly on renewable sources for its energy production. In 1990, Kenya produced 2 million barrels of oil equivalent (BOE) of hydro and other renewable energies, which represented 43% and 57% of total energy production, respectively. By 2019, the production of other renewables had grown significantly to 53 million BOE, constituting 95% of total energy production. The remaining 5% was sourced from the production of hydropower, which was equivalent to 3 MBOE. Other renewable energy sources used in Kenya include geothermal, wind, solar, tidal and bioenergy.[9Energy and Petroleum Regulatory Authority, Renewable energy portal, Relevant information for operating a power plant based on renewable energy.] According to the International Renewable Energy Association, Kenya is the leading producer of geothermal energy in Africa and the fourth globally. 

On the Current Path, it is projected that by 2043, the production of other renewable energies will constitute about 98% of total energy production, which will correspond to 209 million BOE. This will be complemented by a projected 4 million BOE of hydropower produced in the same year.

Carbon is released in many ways, but the three most important contributors to greenhouse gasses are carbon dioxide (CO2), carbon monoxide (CO) and methane (CH4), with the latter having the biggest negative impact. Each has a different molecular weight. IFs uses carbon rather than CO2 equivalent.

Carbon emissions in Kenya are relatively low. In 1990, the country released about 1.6 million tons of carbon. By 2019, this had more than doubled, to about 3.5 million, representing an increase of about 118.8%. The agriculture sector is the leading source of carbon emissions, contributing about 62.8% of total emissions. It is followed by the energy, industrial processes and waste sectors, which contribute 31.2%, 4.6% and 1.4% of total emissions in the country, respectively.[10Climatelinks, Greenhouse gas emissions factsheet: Kenya, 30 April 2017. ] On the Current Path, carbon emission is projected to increase to 9.7 million tons by 2043, constituting an increase of 177.1% relative to the 2019 figures. 

In 2019, opposition from local communities and civil society resulted in the Kenyan courts cancelling the environmental licence for the planned 1 050 MW Lamu Coal Power Station on the shoreline of Manda Bay, close to Lamu Old Town, a UNESCO World Heritage site. The following year, the Industrial and Commercial Bank of China announced that it had withdrawn plans to finance the US$2 billion coal-fired power plant, a first in Kenya and closely linked to the Lamu Port–South Sudan–Ethiopia Transport (LAPSSET) Corridor mega-infrastructure project.[11Staff writer, Business & Human Rights Resource Centre, Kenya: Lamu Coal Power Plant, 6 February 2022.]

Stability scenario

Stability scenario

The Stability scenario represents reasonable but ambitious reductions in risk of regime instability and lower levels of internal conflict. Stability is generally a prerequisite for other aspects of development and this would encourage inflows of foreign direct investment (FDI), among others. Better governance through the accountability that follows substantive democracy is modelled separately.

The intervention is explained here in the thematic part of the website.

Kenya transitioned from a de jure one-party state in 1982 to a liberal multiparty political system in 1992, with elections held every five years. The country has been relatively peaceful and stable until political crises in 2007/08 after former President Mwai Kibakhi was declared the winner of the 2007 presidential election. The main opposition leader at the time, Raila Odinga, made allegations of vote-rigging and refused to concede defeat, which eventually led to widespread violence, the displacement of about 600 000 people and the death of about 1 100.[12Kenya since 2007–2008 post-election violence, Nation, 6 August 2017.] The post-violence period led to constitutional reforms that culminated in the promulgation of a new constitution in 2010. The new constitution created 47 counties as part of an effort to deepen decentralisation and the devolution of power in the country. The county form of government came into effect in 2013, moving the country away from the centralised form of governance that had been in place since independence. Since the reforms, the country has been stable, except for the threat of terrorism from militants linked to Al Shabaab.

Kenya scored 0.74 on the governance security index for 2019, slightly above the average of 0.72 for lower middle-income countries in Africa. In the Stability scenario, Kenya's index score is projected to be 0.07 points (or 9%) above the Current Path forecast by 2043 and 0.12 points above the Current Path average of 0.76 for lower middle-income Africa in the same year.

In 2019, GDP per capita in Kenya was US$3 454, which was lower than the average of US$6 989 for lower middle-income countries in Africa. In the Stability scenario, GDP per capita is projected to rise to US$5 842 by 2043, representing a 3% increase over the Current Path forecast for that year. This estimated value is US$146 higher than the Current Path forecast of US$5 696, but US$3 300 lower than the Current Path average of US$9 142 for lower middle-income countries in Africa. The anticipated growth in GDP per capita in the Stability scenario is associated with regime stability, good governance and reduced corruption attracting larger inflows of foreign investment, which eventually promotes economic growth.

In 2019, the number of poor people living on less than US$3.20 in Kenya stood as 24.6 million, constituting 46.5% of the population. In the Stability scenario, this number is projected to decline to 17.2 million (equivalent to 20.5% of the population), compared with the Current Path projection for 2043 of 18.1 million people (21.5%). This means that the Stability scenario could result in 930 000 fewer people living in extreme poverty. The projected rate in the Stability scenario is 17.8 percentage points lower than the average (38.3%) for lower middle-income countries in Africa in 2043.

Demographic scenario

Demographic scenario

This section presents the impact of a demographic scenario, which aims to hasten and increase the demographic dividend where relevant through reasonable but ambitious reductions in the communicable-disease burden for children under five, the maternal mortality ratio and increased access to modern contraception.

The intervention is explained here in the thematic part of the website.

Demographers typically differentiate between a first, second and even a third demographic dividend. We focus here on the contribution of the size of the labour force (between 15 and 64 years of age) relative to dependants (children and the elderly) as part of the first dividend. A window of opportunity opens when the ratio of the working-age population to dependants is equal to or surpasses 1.7.

In 2019, the ratio of the working-age population to dependants in Kenya was 1.4, which means that on average, for every dependant, there were only 1.4 persons of working age (15–64 years of age). This is low but higher than the average of 1.32 for lower middle-income countries in Africa. Kenya will achieve the minimum ratio of 1.7 by 2029 in the Demographic scenario and by 2030 in the Current Path forecast, after which it enters a potential period of higher economic growth given its larger labour force relative to dependent children and elderly. 

By 2043, the ratio of the working-age population to dependants is projected to be 2.37 in the Demographic scenario. This will be higher than the Current Path forecast of 1.95 and the projected Current Path average of 1.59 for lower middle-income countries in Africa. The increased demographic dividend in Kenya follows from the projected decline in population growth due to a reduction in fertility rates.

The infant mortality rate is the number of infant deaths per 1 000 live births and is an important marker of the overall quality of the health system in a country.

Pneumonia, malaria, diarrhoea and undernutrition are leading causes of child mortality in Kenya In 2019, the infant mortality rate in Kenya was 30.8 deaths per 1 000 live births. This was lower than the average of 46.4 deaths for lower middle-income countries in Africa. 

In the Demographic scenario, Kenya’s infant mortality rate will fall to 12.3 deaths per 1 000 live births by 2043. This is three deaths less than in Kenya’s Current Path forecast and 17.4 fewer deaths than the Current Path average for lower middle-income countries in Africa

In the Demographic scenario, Kenya’s GDP per capita is projected to increase to US$5 962, which is US$266 (or 5%) above the projected value of US$5 696 on the Current Path in the same year. The gain is associated with the expected decline in fertility rates, which will cause a reduction in population growth and an increase in the ratio of working-age persons to dependants, translating to a demographic dividend. Together with the anticipated economic growth, the dividend increases GDP per capita. However, the projected GDP per capita in the Demographic scenario will still be US$3 446 below the Current Path average of US$9 142 for lower middle-income countries in Africa.

In the Demographic scenario, the number of Kenyans living in extreme poverty is projected to decline to 15.2 million people by 2043, equivalent to 19.4% of the population. This means that the Demographic scenario will reduce extreme poverty in the country by 2.9 million people (or 16% below the Current Path forecast) over the forecast period. The difference is 2.1 percentage points below the Current Path forecast and 18.9 percentage points below the Current Path average for lower middle-income countries in Africa. The reduction in extreme poverty in the Demographic scenario follows from the decline in fertility rate and Kenya’s smaller population compared with its Current Path forecast.

Health/WaSH scenario

Health/WaSH scenario

This section presents reasonable but ambitious improvements in the Health/WaSH scenario, which includes reductions in the mortality rate associated with both communicable diseases (e.g. AIDS, diarrhoea, malaria and respiratory infections) and non-communicable diseases (NCDs) (e.g. diabetes), as well as improvements in access to safe water and better sanitation. The acronym WaSH stands for water, sanitation and hygiene.

The intervention is explained here in the thematic part of the website.

Expenditure by the Kenyan government on health as a percentage of GDP is one of the highest on the continent and greater than that of the average lower middle-income African country. Substantial allocations from international donors are included. This huge investment has impacted positively on the country’s health infrastructure and outcomes. Between 2005 and 2012, the country constructed over 1 500 health facilities and increased the number of clinics from 6 200 to about 8 500. The Vision 2030 plan seeks to eliminate deaths from communicable diseases in Kenya, halt the increase of NCDs, reduce exposure to health risk factors and strengthen collaboration with sector providers.[13Government of Kenya, Ministry of Health, Sector Plan for Health 2013–2017, 2013.] However, challenges such as corruption, shortages of essential medical equipment and medications, and health worker strikes continue to plague healthcare delivery in the country.[14KeCrunch, 7 major challenges facing health care system in Kenya, 14 January 2022.]

In 2019, the average life expectancy at birth in Kenya was 68.5 years, which was above the average of 67.5 years for lower middle-income countries in Africa. This relatively higher life expectancy can be explained by the country’s success in reducing deaths due to communicable diseases. Between 2003 and 2019, deaths from communicable diseases declined from 227 400 to 142 500. Women generally have a higher life expectancy (70.9 years) than men (66.1 years). 

In the Health/WaSH scenario, life expectancy will increase to 75.5 years by 2043, which is higher than the country’s Current Path forecast of 75.1 years and the Current Path average of 73.3 years for lower middle-income African countries. In both the Current Path forecast and the Health/WaSH scenario, women will continue to have a higher life expectancy than men by 2043. By then, life expectancy for women will be 5.7 years more than for men. The difference is similar in the Current Path forecast and the Health/WaSH scenario.

In 2019, the infant mortality rate in Kenya was 30.8 per 1 000 live births, lower than the average of 46.4 for lower middle-income countries in Africa. By 2043, infant mortality in the country will be 14.4 in the Health/Wash scenario and 15.3 in the Current Path forecast. Also, the projection for infant mortality in the Health/Wash scenario is lower than the Current Path forecast of 29.7 for lower middle-income countries in Africa. However, the reduction in infant mortality in the Health/WaSH scenario is slower than in the Demographic scenario. 

Agriculture scenario

Agriculture scenario

The Agriculture scenario represents reasonable but ambitious increases in yields per hectare (reflecting better management and seed and fertiliser technology); increased land under irrigation; and reduced loss and waste. Where appropriate, it includes an increase in calorie consumption, reflecting the prioritisation of food self-sufficiency above food exports as a desirable policy objective.

The intervention is explained here in the thematic part of the website.

The data on yields per hectare (in metric tons) is for crops, but does not distinguish between different categories of crops.

The average crop yield per hectare was 4.7 metric tons in 2019, which was below the average of 5.1 metric tons per hectare for lower middle-income countries in Africa. This means that Kenya has not been able to adopt modern farming practices effectively as its income peers to improve yields.  

In the Current Path forecast, yields per hectare will increase to 6.2 metric tons by 2043. In the Agriculture scenario, yield per hectare will increase faster, such as that by 2043, it will reach 9 metric tons, 2.8 metric tons (or 45%) above the projections of the Current Path. As a result, annual crop production in Kenya will increase from 28 million tons in 2019 to 55.76 million tons in the Agriculture scenario by 2043. This will be 17.64 million tons above the Current Path forecast for that year.

In 2091, Kenya’s net agricultural import was 13.3% of agricultural demand, which was equal to the average for lower middle-income countries in Africa. Although the country exports agricultural commodities such as tea, coffee, cut flowers and vegetables, it also imports large amounts of wheat, palm oil, sugar and rice to make up for the shortage in domestic production.[15International Trade Administration, Export.gov, Kenya - Agriculture, 13 August 2019. ] Compared with the Current Path forecast, net agricultural imports will increase to 28.4% of total demand by 2043, signalling a growth in the importation of agricultural goods, also due to changes in dietary preferences. The Agriculture scenario mitigates this situation, such that by 2043, import dependency is projected to reach 14.4%. Although this is quite high, it will be far below the projected Current Path average of 36.8% for lower middle-income countries in Africa.

By 2043, GDP per capita in the Agriculture scenario will have increased from US$3 454 in 2019 to US$6 212, constituting an increment of about 79.8%. This is US$516 (or 9%) more than the country’s Current Path estimate, but still far lower than the Current Path average of US$9 142 for lower middle-income countries in Africa. 

In 2019, Agriculture contributed almost 30% to GDP in Kenya, reflecting the extent to which its economy relies on the sector, also for employment. Therefore, an improvement in agricultural efficiency (e.g. improved farming methods) will impact the economy greatly.

In the Agriculture scenario, extreme poverty in Kenya is forecast to reduce from 24.6 million to 14.3 million, representing 17.1% of the population, by 2043. This is a decline of 4.4 percentage points from the Current Path forecast of 21.5% for the same year and 21.2 percentage points below the Current Path average for lower middle-income countries in Africa. Because Kenya’s population is predominantly rural and with over 70% of the rural population[16USAID, Agriculture and food security, 10 March 2022.] depending on the agriculture sector for their livelihood, the Agriculture scenario has the potential to reduce extreme poverty in Kenya by 3.8 million people. This underlines the importance of prioritising an agricultural revolution.

Education scenario

Education scenario

The Education scenario represents reasonable but ambitious improved intake, transition and graduation rates from primary to tertiary levels and better quality of education. It also models substantive progress towards gender parity at all levels, additional vocational training at secondary school level and increases in the share of science and engineering graduates.

The intervention is explained here in the thematic part of the website.

Various efforts have been made to improve education in Kenya. Free universal basic education was introduced in 2003, which increased enrolment significantly. In 2018, Kenya moved to the 2-6-6-3 learning model (2 years of pre-primary, 6 years of primary, 6 years of secondary and 3 years tertiary education). However, challenges such as inadequate funding, a shortage of teaching and learning materials, an insufficient number of teachers, inadequate educational infrastructure and low teacher remuneration still need to be addressed.[17Tafuta Kenya, Challenges facing education in Kenya and solutions.]

In 2019, the mean years of adult education in Kenya was estimated to be 6.6 years, which was lower than the average of 7.2 for lower middle-income countries on the continent. In terms of gender parity, the mean years of education for men was 7.1, one year more than for women. However, this gap is lower than the average of 1.3 years for lower middle-income countries in Africa, meaning that Kenya has performed relatively better at closing the gender gap in access to education. 

In the Education scenario, the mean years of adult education will rise to 8.5 by 2043, which will be equal to the average for lower middle-income countries in Africa and 0.2 years above the Current Path forecast. By 2043, men are expected to receive 0.7 more years of education than women in both the Current Path forecast and the Education scenario. This will be lower than the gap of 0.9 years between men and women in lower middle-income African countries by then.

In 2019, primary education quality in Kenya was above the average for lower middle-income Africa and set to improve considerably. Secondary education quality, currently slightly below the average for its peer group, is set to improve rapidly in the Current Path forecast. 

The average test score for primary learners in Kenya for 2019 was 35.2, higher than the average of 33.6 for lower middle-income countries in Africa. The Education scenario will increase average test scores for primary learners, so that by 2043, the average will be 16% above the Current Path forecast. In addition, the quality of primary education in the Education scenario will be 8.6 points higher than the Current Path average of 35.3points for lower middle-income African countries.

By 2043, the average test scores for secondary learners in the Education scenario will improve by 19% relative to the Current Path forecast and be substantially higher than the Current Path average for lower middle-income countries in Africa.

By 2043, GDP per capita will increase to US$5 878 in the Education scenario, representing an increase of US$190 from the Current Path forecast in the same year. This translates to an improvement of 3%. The contribution of education to economic growth follows from its contribution to human capital formation, which is a significant factor for economic growth. However, this impact takes time to materialise. The projected GDP per capita in the Education scenario will still be below the Current Path average of US$9 142 for lower middle-income countries in Africa.

By 2043, the Education scenario will lead to the number of extremely poor people reducing to 16.6 million, equivalent to 19.7% of Kenya’s population. The scenario will therefore result in over 1.6 million fewer people living in extreme poverty by 2043 than projected by the Current Path forecast. This is comparable to a decline of 1.8 percentage points in extreme poverty. Education equips people with the requisite skills to either start a business or acquire jobs that help to improve their income, thereby improving their standard of living. The poverty rate for Kenya in the Education scenario will be 18.6 percentage points below the average for lower middle-income countries in Africa in the Current Path forecast by 2043.

Manufacturing/transfers scenario

Manufacturing/transfers scenario

The Manufacturing/Transfers scenario represents reasonable but ambitious manufacturing growth through greater investment in the economy, investments in research and development, and promotion of the export of manufactured goods. It is accompanied by an increase in welfare transfers (social grants) to moderate the initial increases in inequality that are typically associated with a manufacturing transition. To this end, the scenario improves tax administration and increases government revenues. 

The intervention is explained here in the thematic part of the website.

Chart 30 should be read with Chart 8, which presents a stacked-area graph on the contribution to GDP and size, in billion US$, of the Current Path economy for each of the sectors.

The three sectors that contributed the most to Kenya’s GDP in 2019 were services (49%), agriculture (30%) and manufacturing (12.3%). In the Current Path forecast, the service sector increases its contribution to 56.5%, agriculture declines to 12.8% and manufacturing increases to 18.5%. In the Manufacturing/Transfers scenario the service sector is projected to contribute US$11.6 billion more to GDP by 2043, which will be 0.18 percentage points above the Current Path forecast. The manufacturing sector is also projected to contribute an additional US$4.9 billion to GDP in this scenario by then, equivalent to 0.48 percentage points above the Current Path forecast. ICT is set to contribute an extra US$1.8 billion to GDP by 2043, comparable to 0.17 percentage points over the Current Path forecast. The contribution of the agriculture sector to GDP will decline to 0.85 percentage points below the Current Path forecast in the Manufacturing/Transfers scenario. This will translate into an absolute contribution of US$300 million by 2043.

In 2019, welfare transfers to Kenyan households amounted to a total of US$7.1 billion. In the Manufacturing/Transfers scenario, this will more than quadruple, to US$31.2 billion, by 2043, constituting an increase of about 339% between 2019 and 2043. This exceeds the projected US$21.9 billion in the Current Path forecast, meaning that the Manufacturing/Transfers scenario leads to an additional US$9.3 billion in government welfare transfers relative to the Current Path forecast by 2043. 

GDP per capita in the Manufacturing/Transfers scenario will reach US$6 020 in 2043. This is 6% (or US$324) higher than in the Current Path forecast for that year. The growth of the manufacturing sector is historically the largest provider of jobs and allows for the structural transformation of economies towards higher productivity and knowledge, with spillover effects to other sectors. It is therefore not surprising that the Manufacturing/Transfers scenario leads to such an improvement in GDP per capita. However, the GDP per capita for Kenya in this scenario will still be US$3 122 lower by 2043 than the average of US$9 142 projected for lower middle-income countries in Africa in the Current Path forecast.

In the Manufacturing/Transfers scenario, the total number of extremely poor people in Kenya will be 14.6 million by 2043, representing 17.4% of the country’s population. This is 3.6 million fewer people than forecast for 2043 on the Current Path (18.1 million) and represents a reduction of 19.6%. It means that Kenya can reduce poverty by aggressively pursuing a low-end manufacturing growth path that includes associated investments in research and development, and promoting trade. However, such a growth path will need to be accompanied by increases in welfare transfers.

Leapfrogging scenario

Leapfrogging scenario

The Leapfrogging scenario represents reasonable but ambitious adoption of and investment in renewable energy technologies, resulting in better access to electricity in urban and rural areas. The scenario includes accelerated access to mobile and fixed broadband and the adoption of modern technology that improves government efficiency and allows for the more rapid formalisation of the informal sector.

The intervention is explained here in the thematic part of the website.

Fixed broadband includes cable modem Internet connections, DSL Internet connections of at least 256 KB/s, fibre and other fixed broadband technology connections (such as satellite broadband Internet, ethernet local area networks, fixed-wireless access, wireless local area networks, WiMAX, etc.).

Kenya is generally recognised as a leader in mobile telephony, but its progress in fixed lines has lagged. In 2019, the total number of fixed broadband subscriptions in Kenya was estimated at about 2.3 per 100 people. This was lower than the average of 3.7 for lower middle-income countries in Africa on the Current Path. 

In the Current Path forecast, fixed broadband subscriptions will rise to 22.5 per 100 people by 2043. However, the Leapfrogging scenario will lead to a much larger increase, so that, by 2043, subscriptions will likely be at 45.5 per 100 people. In the Leapfrogging scenario, the number of subscriptions for 2043 will also be greater than the average of 26.5 per 100 people for lower middle-income African countries.

Mobile broadband refers to wireless internet access delivered through cellular towers to computers and other digital devices.

Kenya is a leader in mobile telephony in Africa. In 2019, Kenya had a mobile broadband subscription rate of 56.6 per 100 people, which was greater than the Current Path average of 49.1 for lower middle-income countries on the continent. Because the Current Path forecast is very aggressive, getting to 111 subscriptions by 2024, the Leapfrogging scenario has only a marginal impact. Both the Current Path forecast and the Leapfrogging scenario get to 152 subscriptions per 100 people by 2043, which is higher than the average of 147.6 for Africa’s lower middle-income countries.

Kenya relies heavily on renewable energy for producing electricity, although total production is quite small. In 2015, it was estimated that geothermal and hydro energy constitute 46% and 39% of electricity production, respectively. The remaining energy sources were biofuels, oil and wind.[18 International Energy Agency, Kenya.] 

In 2019, 34.3 million people had access to electricity, representing 69.7% of the Kenyan population. This was above the average of 66.3% for lower middle-income countries in Africa. In contrast to 90.8% of urban residents, 61.7% of rural dwellers had access to electricity in 2019, depicting a location disparity in favour of urban residents. In the Leapfrogging scenario, 89.7%% of the population will have access to electricity by 2043, compared with 82.6% of the population) in the Current path forecast. The percentage of people with access to electricity in the Leapfrogging scenario in 2043 is higher than the average of 81.7% for lower middle-income countries in Africa on the Current Path. 

By 2043, 96.8% of urban residents will have access to electricity in the Leapfrogging scenario, compared with 92.3% in the Current Path forecast., The proportion of people in rural areas who will have access to electricity is estimated to be 84.8% and 76.1% in the Leapfrogging scenario and the Current Path forecast, respectively.

Kenya’s GDP per capita is estimated to increase to US$5 941 by 2043 in the Leapfrogging scenario. This is an increase of US$245 (or 4%) compared with the Current Path forecast of US$5 696 for 2043. However, this will still be US$3 201 less than the average of US$9 142 for lower middle-income countries in Africa. 

Broadband accessibility has the potential to increase GDP through its effect on reducing transaction costs for businesses. It can also help firms adopt efficient technologies, which can improve productivity and ultimately lead to growth.

In the Leapfrogging scenario, 16.2 million people are projected to be living in extreme poverty by 2043, representing 19.3% of the population. This is 1.9 million fewer people than in the Current Path forecast for 2043 (18.1 million). The proportion of people living in extreme poverty projected by the Leapfrogging scenario in Kenya will be 2.2 percentage points lower than the Current Path forecast in 2043 and 19 percentage points below the Current Path average of 38.3% for  lower middle-income countries in Africa. Extending electricity access, especially to rural areas, and adopting modern technology, including mobile telephony, can help to reduce poverty by increasing productivity and improving the output of micro- and small businesses, especially in the informal sector.

Free Trade scenario

Free Trade scenario

The Free Trade scenario represents the impact of the full implementation of the African Continental Free Trade Area (AfCFTA) by 2034 through increases in exports, improved productivity and increased trade and economic freedom.

The intervention is explained here in the thematic part of the website.

The trade balance is the difference between the value of a country's exports and its imports. A country that imports more goods and services than it exports in terms of value has a trade deficit, while a country that exports more goods and services than it imports has a trade surplus.

One of the goals of Kenya’s Vision 2030 is to achieve an export sector that constitutes 29% of GDP by 2022. Kenya’s top exports include tea, cut flowers, refined petroleum, coffee and legumes to countries such as the US, UK, Uganda, the Netherlands and Zambia. It imports large amounts of refined petroleum, packaged medicines, video displays and delivery trucks from countries such as China, Japan, India, Tanzania and South Africa.[19Observatory for Economic Complexity, Kenya.] Although the country imports mostly finished or processed goods, most of its exports are raw materials, with little or no value addition and consequently resulting in low export revenues. The country is therefore a net importer of goods and services, and operates a trade deficit.  

In 2019, Kenya’s trade deficit represented 6.1% of GDP, which is slightly below the average of 6.6% for lower middle-income African countries on the Current Path. Between 2024 and 2038, the Free Trade scenario leads to a faster improvement in trade balance than the Current Path forecast, peaking at a deficit of 1.4% of GDP by 2033. In the same year, the Current Path forecast will result in a deficit of 4.5% of GDP. The trend starts to reverse from 2040, so that by 2043, the Current Path forecast leads to a slightly lower deficit (5.3%) than in the Free Trade scenario (5.7%). These figures suggest that trade liberalisation will improve Kenya’s trade balance in the short term, but worsen it in the long term. This underlines the importance of additional measures to improve competitiveness, particularly in growing the country’s manufacturing and agriculture sectors.

In the Free Trade scenario, Kenya’s GDP per capita will increase to US$6 429 by 2043, which represents an increase of US$733 (or 13%) compared with the projections on the Current Path in 2043. This means that Kenya has considerable potential to increase GDP if it takes advantage of the full implementation of the AfCFTA. Trade between African countries has the benefit of increasing Kenya’s exports, as it provides access to a much larger market and so can improve the country’s manufacturing sector. This will lead to more rapid economic growth and increased employment in key sectors. However, despite the positive effect of the Free Trade scenario, average GDP per capita will still be lower than the average of US$9 142 projected on the Current Path for lower middle-income African countries.

Trade openness will reduce poverty in the long term after initially increasing it due to the redistributive effects of trade. Most African countries export primary commodities and low-tech manufacturing products, and therefore a continental free trade agreement that reduces tariffs and non-tariff barriers across Africa will increase competition among countries in primary commodities and low-tech manufacturing exports. Countries with inefficient, high-cost manufacturing sectors might be displaced as the AfCFTA is implemented, thereby pushing up poverty rates. In the long term, as the economy adjusts and produces and exports its comparatively advantaged (lower relative cost) goods and services, poverty rates will decline.

The impact of the Free Trade scenario is an initial small increase in extreme poverty between 2028 and 2033, followed by a rapid reduction compared with the Current Path forecast. This may be attributed to the redistribution and displacement effect of trade in the short term, in which some sectors initially could initially be worse off as a result of increased trade. In the Free Trade scenario, 14.7 million people are expected to be living in extreme poverty by 2043, representing 17.4% of the population. This is 4.1 percentage points lower than the Current Path forecast, equivalent to a reduction of 3.5 million people. A smaller percentage of Kenyans are projected to be living in extreme poverty in the Free Trade scenario than the average of 38.3% projected for lower middle-income countries in Africa on the Current Path.

Financial Flows scenario

Financial Flows scenario

The Financial Flows scenario represents a reasonable but ambitious increase in worker remittances and aid flows to poor countries, increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows. We also reduced outward financial flows to emulate a reduction in illicit financial outflows.

The intervention is explained here in the thematic part of the website.


Kenya received US$2.4 billion of foreign aid (equivalent to 3.7% of GDP) in 2019. This was significantly higher than the average of 1.7% for lower middle-income countries in Africa. Most of the aid to Kenya is channelled into the health sector and the results are reflected in the Health/Wash scenario jump to Health/Wash scenario. In addition, initiatives such as security, peace building and conflict management have all received support. For example, between 2010 and 2018 Kenya received more than US$700 million in aid from the US to strengthen its counter-terrorism activities.[20J Custer and S Patterson, U.S. contributions to Kenya estimated at over $3 billion annually, according to new AidData research, AidData, 17 June 2020.] Although the absolute value of foreign aid is projected to increase in both the Financial Flows scenario (US$3.4 billion) and the Current Path forecast (US$3.3 billion), aid as a percentage of GDP will decline. By 2043, total aid will amount to 1.52% of GDP in the Financial Flows scenario and 1.54% in the Current Path forecast. This will be above the projected 0.54% for average lower middle-income countries in Africa on the Current Path. 

The total amount of FDI received by Kenya in 2019 was equivalent to 1.6% of GDP, constituting US$10.8 billion, which was lower than the average of 2.6% for lower middle-income African countries. In an attempt to attract more FDI into the country, the Kenyan government has embarked on a number of reforms aimed at improving its regulatory environment and the ease of doing business. The country recently passed the Tax Laws Amendment (2018) and the Finance Act 2019, which introduced the iTax platform to facilitate tax payment. The cost of construction permits has also been reduced, the process for registering a micro, small or medium business has been simplified and a ‘one-stop’ border post system has been implemented to expedite the movement of goods across borders.[21US Department of State, 2021 Investment climate statements: Kenya.] The result is that Kenya improved its ranking from 61 (in 2019) to 56 in 2020 according to the World Bank’s Ease of Doing Business report. However, various restrictions for foreign investment remain, in areas such as aviation, insurance, telecommunications, financial institutions, mining, engineering and architecture.[22M Leiva, The state of play: FDI in Kenya, 29 October 2021, Investment Monitor.] 

FDI is expected to increase to 2.3% of GDP in the Financial Flows scenario by 2043. This will be above the projected 2.0% of the Current Path forecast for that year, but lower than the Current Path average of 3.5% for lower middle-income countries on the continent.

In 2019, Kenya received US$2.1 billion in remittances, which constituted 3.0% of GDP. This was higher than the average of 2.6% for lower middle-income African countries. By 2043, total remittances in the Financial Flows scenario will come to US$12 billion, constituting 4.9% of GDP. This will be higher than the US$10.8 billion (4.6% of GDP) projected in the Current Path forecast. The projections in both the Current Path and Financial Flows scenarios are higher than the average (2.0% of GDP) for lower middle-income countries on the Current Path.

In the Financial Flows scenario, Kenya’s GDP per capita is estimated to have risen to US$5 840 by 2043. This represents an increase of US$144 (or 2.5%) above the Current Path forecast. This estimate is below the average for lower middle-income countries in Africa, which is projected to be US$9 142 by 2043. Remittances, aid and FDI inflow are positively associated with economic growth through the multiplier effect on businesses and household expenditure.

In the Financial Flows scenario, 17.0 million Kenyans are expected to be living in extreme poverty by 2043, equivalent to 20.2% of the total population. This represents a decline of 1.2 million people (1.3 percentage points) from the Current Path forecast for that year. The projected percentage is also lower than the Current Path average of 38.3% for lower middle-income countries in Africa.

Infrastructure scenario

Infrastructure scenario

The Infrastructure scenario represents a reasonable but ambitious increase in infrastructure spending across Africa, focusing on basic infrastructure (roads, water, sanitation, electricity access and ICT) in lower middle-income countries and increasing emphasis on advanced infrastructure (such as ports, airports, railway and electricity generation) in higher-income countries.

Note that health and sanitation infrastructure is included as part of the Health/WaSH scenario and that ICT infrastructure and more rapid uptake of renewables is part of Leapfrogging. The interventions there push directly on outcomes, whereas those modelled in this scenario increase infrastructure spending, indirectly boosting other forms of infrastructure, including that supporting health, sanitation and ICT.

The intervention is explained here in the thematic part of the website.

In 2019, 34.3 million people in Kenya had access to electricity, constituting 64.8% of the population. This is projected to increase to 85.4% of the population by 2043 in the Infrastructure scenario. This will exceed the Current Path forecast of 82.6% of the population. It will also be higher than the average of 81.7% forecast for lower middle-income countries in Africa. 

By 2043, 95.1% of the urban population will have access to electricity in the Infrastructure scenario, compared with 73.4% of rural dwellers. In the Current Path forecast, electricity access for urban residents will constitute 92.3% of the population compared with 76.1% access for the rural population. This suggests that the Infrastructure scenario will increase the disparity in electricity access in favour of the rural population.

Indicator 9.1.1. in the Sustainable Development Goals refers to the proportion of the rural population who live within 2 km of an all-season road and is captured in the Rural Access Index.

Access to rural areas is essential for improving the integration and interaction between rural and urban economies, which is important for spurring local economic development. However, the impact of the Infrastructure scenario on rural road access is quite limited. In 2019, the proportion of Kenyans who lived within 2 km of an all-weather road was about two percentage points higher than the average for lower middle-income Africa (63.3% versus 61.4%), but the latter group will overtake Kenya by 2037. In the Infrastructure scenario, the proportion of the rural population with access to an all-season road will rise to 67.7% by 2043, which is only marginally higher than the projected 67.2.% in the Current Path forecast. It is below the average of 67.8% for lower middle-income countries in Africa in that year

The impact of the Infrastructure scenario on GDP per capita is small, as most of the additional funds are allocated to improved water access and better sanitation. Kenya ’s GDP per capita is projected to rise to US$5 777 by 2043 in the Infrastructure scenario, which is US$81 (1%) more than the projected US$5 696 in the Current Path forecast for that year.

In the Infrastructure scenario, 17.7 million Kenyans are expected to live in extreme poverty by 2043 (21.1% of the population). This constitutes a reduction of 410 000 people (0.4 percentage point decline) from the Current Path forecast of 18.1 million (21.5% of the population). Compared with scenarios such as Agriculture, Free Trade and Education, Infrastructure has a minimal impact on poverty reduction in Kenya. However, the poverty rate in the Infrastructure scenario will still be lower than the average of 38.3% for lower middle-income countries in Africa by 2043.

Governance scenario

Governance scenario

The Governance scenario represents a reasonable but ambitious improvement in accountability and reduces corruption, and hence improves the quality of service delivery by government.

The intervention is explained here in the thematic part of the website.

As defined by the World Bank, government effectiveness ‘captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies’.

Chart 51 presents the impact of the interventions in the Governance scenario on government effectiveness.

Kenya does well on the World Bank government effectiveness index. The country scored 2.27 (out of 5) on the index in 2019, which was the fifth highest score among the 23 lower middle-income countries in Africa. Government effectiveness will improve in both the Current Path forecast and the Governance scenario. However, Kenya’s positive ranking is undermined by its poor ranking on corruption, having ranked among the five worst lower middle-income countries in Africa for this aspect in 2019. As a result, Kenya’s score for government effectiveness is projected to be only 2.65 in 2043, which will be a mere 0.01 points above the Current path forecast.

In the Governance scenario, Kenya’s GDP per capita is projected to increase to US$5 824 by 2043, constituting an increase of US$128 (or 2%) above the Current Path forecast of US$5 696. However, this number is still below the average of US$9 142 for lower middle-income countries on the continent in the same year. Good governance, in the form of adherence to the rule of law, reduced corruption and improved transparency and accountability would lead to more rapid economic growth in Kenya. 

In the Governance scenario, the proportion of people living on less than US$3.20 per day is expected to decline to 20.6% (17.3 million people) by 2043. This is lower than the 38.3% average for lower middle-income African countries. The reduction translates to about 830 000 fewer extremely poor people than the 18.1 million in the Current Path forecast for 2043.

Impact of scenarios on carbon emissions

Impact of scenarios on carbon emissions

This section presents projections for carbon emissions in the Current Path for Kenya and the 11 scenarios. Note that IFs uses carbon equivalents rather than CO2 equivalents.

In 2019, Kenya emitted only 4 million tons of carbon, reflecting the extent of electricity production from hydro and other renewable sources instead of fossil fuels. As a result, future increases in emissions are modest and in some cases even below the Current Path forecast (e.g. in the Leapfrogging scenario, where additional electricity generation is from renewables).

By 2043, Kenya’s carbon emissions will increase most (to 11.5 million tons) in the Free Trade scenario, which also results in the largest economic growth. Emissions will be below the 2043 Current Path forecast in the Financial Flows, Manufacturing/Transfers, Demographic and Leapfrogging scenarios. 

The Agriculture and Education scenarios are projected to increase emissions to 10.1 million and 10 million tons, respectively. Conversely, in the Leapfrogging scenario, emissions are at only 3.1 million tons in 2043.

Combined Agenda 2063 scenario

Combined Agenda 2063 scenario

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The Combined Agenda 2063 scenario consists of the combination of all 11 sectoral scenarios presented above, namely the Stability, Demographic, Health/WaSH, Agriculture, Education, Manufacturing/Transfers, Leapfrogging, Free Trade, Financial Flows, Infrastructure and Governance scenarios. The cumulative impact of better education, health, infrastructure, etc. means that countries get an additional benefit in the integrated IFs forecasting platform, which we refer to as the synergistic effect. Chart 55 presents the contribution of each of these 12 components to GDP per capita in the Combined Agenda 2063 scenario as a stacked area graph. 

The scenario with the greatest impact on GDP per capita by 2043 is Free Trade, followed by Agriculture, and then the Manufacturing/Transfers and Infrastructure scenarios. This suggests that these sectors should be supported to unlock more rapid economic growth in the long term. In contrast, the Health/WaSH and Infrastructure scenarios will have the least impact on GDP per capita.

Whereas Chart 55 presents a stacked area graph on the contribution of each scenario to GDP per capita as well as the additional benefit or synergistic effect, Chart 56 presents GDP per capita in only the Current Path forecast and the Combined Agenda 2063 scenario.

Kenya’s GDP per capita is estimated to increase to US$9 014 by 2043 in the Combined Agenda 2063 scenario, representing an increase of 161% from 2019 to 2043. This will be US$3 318 higher than the projection of US$5 696 on the Current Path. It means that the Combined Agenda 2063 scenario could improve GDP per capita by 58.3% by 2043. However, Kenya’s GDP per capita in the Combined Agenda 2063 scenario will still be lower than the Current Path average of US$9 142 for lower middle-income countries in Africa in 2043. The Combined Agenda 2063 scenario is the aggregation of all the scenarios, and therefore it is not surprising that it has such a noticeable impact on GDP per capita.

In the Combined Agenda 2063 scenario, both the number and proportion of poor people in Kenya will significantly decline. By 2043, about 3.8 million people in the country, equivalent to 4.8% of the population, will be living in extreme poverty. This means that, compared with the Current Path forecast, 14.4 million more people could be lifted out of poverty by 2043 in this scenario. This is equivalent to a decline of 16.7 percentage points compared with the Current Path forecast for 2043. In addition, the projected proportion of poor people in Kenya in the Combined Agenda 2063 scenario is 33.5 percentage points lower than the average (38.3%) for lower middle-income African countries by 2043.

See Chart 8 to view the Current Path forecast of the sectoral composition of the economy.

In the Combined Agenda 2063 scenario, services, manufacturing and ICT will be the biggest contributors to GDP in the long term. By 2043, the Combined Agenda 2063 scenario will result in the service sector contributing an additional US$128.9 billion to GDP, equivalent to 4.7 percentage points above the Current Path forecast. Manufacturing is projected to contribute an additional US$26.6 billion in 2043, although its rate of contribution will decline so that by 2043, its contribution will be 2.1 percentage points below the Current Path forecast. ICT is projected to contribute about US$15.2 billion extra to the economy in this scenario, which will be 0.5 percentage points above the Current Path forecast. The large contribution from the ICT sector is particularly impressive.

GDP is projected to rise to US$428.3 billion in the Combined Agenda 2063 scenario, representing an increase of 511% between 2019 and 2043. This will exceed the Current Path estimates of US$235.5 billion, meaning that the Combined Agenda 2063 scenario will increase the size of the economy by an additional US$192.8 billion by 2043. This represents an increase of 81.9% from the Current Path forecast. The massive growth projected in the Combined Agenda 2063 scenario is due to the intersectoral impact of the policy interventions underpinning the various scenarios, which are necessary for achieving sustainable economic development in Kenya.

In 2019, Kenya was ranked 14th in terms of carbon emissions in Africa. In the Current Path forecast, it is set to drop to 18th position by 2043 given the country’s reliance on hydropower and other renewable energy sources. The advantage is clear, given that Kenya had the 10th largest economy in Africa in 2019 and is expected to have the ninth largest by 2043. 

Kenya releases little carbon compared with other African countries. On the Current Path, Kenya is projected to emit 9.7 million tons of carbon, representing a 177.1% increase from the 3.5 million tons recorded in 2019 and almost four times as much as what is estimated in the Combined Agenda 2063 scenario (2.5 million tons). However, carbon emissions come from a low base. This means that although achieving sustainable economic development in Kenya will come at an environmental cost. 


However Kenya can benefit from its huge potential for producing renewable energy (which already accounts for 75% of its electricity generation). For instance, with its large geothermal reserves, the country can increase its current installed capacity at least eight times.[23D Pilling,Can Africa grow without fossil fuels?, Financial Times, 1 June 2022.  ] As such, Kenya must push to fully transition to renewable energies to reduce the projected carbon emissions.

Endnotes

  1. Institute of Economic Affairs Kenya, Youth unemployment in Kenya: Policy gaps analysis, 17 January 2020.

  2. Kenyaplex, Rural to urban migration in Kenya, 27 June 2013.

  3. Statista, Population of Kenya by largest cities.

  4. P Vidija, Nairobi, Mombasa and Vihiga counties most densely populated - Census, The Star, 21 February 2020.

  5. Institute of Economic Affairs Kenya, Youth unemployment in Kenya: Policy gaps analysis, 17 January 2020. 

  6.  International Trade Administration, Kenya - Country commercial guide, 13 September 2021.

  7. Statista, Agricultural land in Kenya from 2010 to 2019.

  8. E Ray, Why is Kenya poor? Looking at poverty in Kenya, The Borgen Project, 8 August 2017. 

  9. Energy and Petroleum Regulatory Authority, Renewable energy portal, Relevant information for operating a power plant based on renewable energy.

  10. Climatelinks, Greenhouse gas emissions factsheet: Kenya, 30 April 2017.

  11. Staff writer, Business & Human Rights Resource Centre, Kenya: Lamu Coal Power Plant, 6 February 2022.

  12. Kenya since 2007–2008 post-election violence, Nation, 6 August 2017.

  13. Government of Kenya, Ministry of Health, Sector Plan for Health 2013–2017, 2013.

  14. KeCrunch, 7 major challenges facing health care system in Kenya, 14 January 2022.

  15. International Trade Administration, Export.gov, Kenya - Agriculture, 13 August 2019. 

  16. USAID, Agriculture and food security, 10 March 2022.

  17. Tafuta Kenya, Challenges facing education in Kenya and solutions.

  18.  International Energy Agency, Kenya.

  19. Observatory for Economic Complexity, Kenya.

  20. J Custer and S Patterson, U.S. contributions to Kenya estimated at over $3 billion annually, according to new AidData research, AidData, 17 June 2020.

  21. US Department of State, 2021 Investment climate statements: Kenya.

  22. M Leiva, The state of play: FDI in Kenya, 29 October 2021, Investment Monitor.

  23. D Pilling,Can Africa grow without fossil fuels?, Financial Times, 1 June 2022.  

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Cite this research

Enoch Randy Aikins (2022) Kenya. Published online at futures.issafrica.org. Retrieved from https://futures.issafrica.org/geographic/countries/kenya/ [Online Resource] Updated 24 August 2022.