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State initiatives and infrastructure development support Kenyan tourism

Kenya | Tourism

After some challenging years, Kenya’s tourism industry is recovering, with the country becoming an increasingly attractive destination as stability and confidence have returned, travel connections have improved and relevant government programmes have come into effect. The authorities are adopting increasingly innovative policies to encourage growth, which appear to be yielding results, with tourism arrivals and sector earnings both on the rise in recent years.

Historical Context

Tourism has been a key element in the economy for more than a century. The country first saw large numbers of visitors in the late 19th century and became an especially popular destination in the 1920s. The colonial government, noting the value of the natural landscapes, passed a series of laws to manage these assets and properly administer them, such as the Game Preservation Proclamation of 1920 and the Game Ordinance of 1921. Colonial authorities also expanded the reserves and national parks. Furthermore, the founding of the East African Tourist Travel Association in 1948 – an early effort to promote tourism – was well timed, as long-distance commercial air travel was becoming more practical, bringing Kenya well within reach of most European travellers. By 1964 the country was receiving 65,450 annual tourists, more than three times the amount seen in 1948, and the most by far in East Africa.

After the country won independence in 1963, efforts continued. The new nation was in need of foreign exchange earnings, and tourism was seen as an effective avenue to balance the national accounts. Kenya spent heavily on sector promotion, opening tourism offices in New York, London and Frankfurt, and forming the Kenya Tourist Development Corporation in 1965. After a period of rapid expansion, it began to stagnate in the 1990s as competition increased and internal problems made visitors more wary of the country.

The early 2000s and 2010s also saw various challenges. Monthly tourism numbers peaked at 143,556 in July 2011. The troubles of 2013 and subsequent terror attacks made security a major concern, leading to significant reductions in arrivals. For a country with such strong natural attractions, Kenya has relatively few visitor arrivals in both regional and global terms. Morocco and South Africa, for instance, both have more than 10m annual visitors; Egypt and Tunisia receive more than 5m; and Zimbabwe and Algeria over 2m.

Improving Performance

However, improvements have been noted more recently, with the sector performing robustly in 2017 despite it being an election year. In the past, elections have been problematic for tourism, with figures falling from 1.69m to 1.14m at the time of the 2007-08 contest. Contrary to this trend, 2017 saw totals increase by 8.1%, from 1.34m to 1.45m.

According to figures from the Kenya National Bureau of Statistics, this uptick in arrivals was accompanied by a 20.3% increase in the direct value of the sector, reaching KSh119.9bn ($1.2bn). However, in its “Power and Performance 2018” report, the World Travel & Tourism Council noted that with indirect markets taken into account, tourism contributed $7.43bn, or 9.7% of GDP, in 2017. This placed Kenya 71st out of 185 countries. According to the “Travel & Tourism Economic Impact 2018” report by the UN’s World Tourism Organisation, total sector contribution to GDP is set to record 5.5% real growth in 2018, and average 5.1% expansion per annum over the 2018-28 period, placing it third in sub-Saharan Africa behind Tanzania (7.1%) and Namibia (5.4%).

Beneath the headline figures, other encouraging trends have arisen. According to the Ministry of Tourism and Wildlife, in 2017 US arrivals grew by 17% to 114,507, while those from the UK were up 11.1% to 107,078. Meanwhile, there were 4m bed-nights reported, up from 3.5m in the previous year, suggesting a strengthening market. Growth is expected to continue, with arrivals anticipated to increase by 16% in 2018.

Source Markets

Along with the uptick in numbers, changes in the make-up of the market have been observed, with traffic becoming more diverse. In 2016, for instance, the US overtook the UK, and it has been a strong and rising source of visitors. This placed the UK second, and Uganda came in third.

African nations are accounting for a larger share of visitors to Kenya, with 95,845 collective arrivals from Uganda, Tanzania and Rwanda in 2017, up significantly from 80,841 and 58,032 in 2016 and 2015, respectively. The share of visitors coming from Uganda increased from 3.9% in 2015 to 6.4% in 2017. This is driven by not only the economic prosperity and expanding middle class, but also supportive policy in the region. Africa is becoming a place of relatively open borders, which is facilitating tourism. Ugandans and Rwandans can travel freely to Kenya using only their ID cards, and all citizens of the EAC can travel to the country without visas. A multi-entry single tourist visa programme has been in effect since February 2014, allowing travellers visiting Kenya, Uganda or Rwanda to move among all three countries under a single permit, though Tanzania and Burundi are not included in this.

The larger region is also trending towards liberalisation, with Seychelles, Namibia, Ghana, Rwanda, Mauritius, Nigeria and Benin all having no-visa policies for other African countries, while the African Union introduced the idea of a continental passport in 2016.

Points of Origin

Although the authorities have made moves to facilitate tourism within Africa, the majority of visitors are intercontinental. In 2017, 35% of people entering the country come from Europe, 29% from Africa, 15% from Asia and 15% from the Americas. In addition to intracontinental tourism, Kenya is putting a larger emphasis on encouraging domestic tourism, a segment that grew by 15.9% in 2017.

Related industries have similarly been growing rapidly, serving as major drivers of the economy. The accommodation and restaurant segment has recorded the strongest rates of expansion for a number of years, at 13.3% in 2016, 14.7% in 2017, 13.5% in the first quarter of 2018 and 15.7% in the second quarter of that year.

The authorities continue to work to support further expansion. When President Uhuru Kenyatta first came into office in 2013, he announced that his administration would work to attract 3m tourists a year, and he has called for easier travel throughout the EAC in support of this. Also in the works is a longer-term master plan that aims to increase the number of annual visitors to 5m.

Master Plan

In June 2018 the government released a plan to achieve the country’s long-term vision to develop its tourism industry. The National Tourism Blueprint (NTB) 2030 aims to transform the sector, dealing with all components of the value chain to create a comprehensive set of offerings that both increase visitor numbers and assure sustainability.

The country aims to hit 5m yearly tourist arrivals by 2030, KSh200bn ($2bn) of public revenue and 3m jobs in the sector. It is also seeking to expand domestic tourism, with 26.4m visitors per year by 2030. The NTB focuses on four key areas: product strategy, tourism marketing, investment promotion and infrastructure. A number of sub-strategies have been identified, which broadly aim to improve, diversify, refresh and innovate the sector.

The initiative will be carried out in various stages. First, the authorities aim to jump-start existing products and upgrade the traditional markets, making over the existing framework. Second, new markets and offerings will be explored to build on the successful foundations in place. According to the NTB, the first stage will occur over the 2018-23 period, before the authorities begin to diversify in 2021. The government plans to invest in ongoing maintenance of the sector throughout the 13 years of the programme.

A total of 14 strategic initiatives have been identified, with specific plans to construct a six-lane highway to parallel the Madaraka Express and 13 new hotels. The blueprint also calls for institutional development through the establishment of a National Tourism Council, which will help with the formulation and implementation of tourism initiatives. A number of other new boards and bodies are also envisioned, including regional tourism councils and a tourism transformation fund, as well as subsidiary directorates.

The plan also calls for some large-scale, complex infrastructure works. Under the NTB, Kenya will create seven so-called branded corridors on 2500 km of roads, which are set to provide visitors with access to beach and mountain experiences alike. Secondary airports have also been targeted as part of the strategy. In terms of marketing, it is hoped that the country shifts from the traditional model and starts to embrace more online strategies. A so-called Brand Kenya will be created, and the sales system will be upgraded to make the country a preferred partner for the industry while engaging overseas representatives. Incentive programmes are set to include a refurbishment fund, the promotion of an international branded hotel, the Shanzu Creek Development City and resort cities. Cruise terminals and innovation centres are also in the NTB, as are airline incentive programmes, urban tourism and the commercialisation of beadwork.

Connectivity

Kenya’s land, sea and air connectivity continue to improve. Tourists are able travel quickly and affordably into and within the country with increasing ease. This is likely to stimulate tourism by improving travel patterns and removing bottlenecks that once made more creative itineraries impractical.

Much of the new activity is local, regional and low-cost in nature, helping shift the sector’s reputation from catering primarily to wealthy US citizens and Europeans to accommodating a wider range of individuals. A patchwork of micro-markets and short-haul networks is also developing. For example, Jambojet – Kenya Airway’s low-cost carrier (LCC) subsidiary founded in 2014 – introduced a new twice-daily service between Nairobi and Entebbe in February 2018. It is utilising a Bombardier Q400 and pricing seats at KSh11,330 ($111). With a fleet of four aircraft flying to seven destinations, the airline has noted increased demand on domestic routes.

Fly Tristar Services, another LCC, began operating along the coast of Kenya in summer 2018, and it is set to continue offering discounted fares of KSh4333 ($42) through to early 2019. The airline offers a route between Wilson and Mombasa three days per week. It also services Ukunda, Lamu and Malinidi on a charter basis. Founded in 2004, Safarilink is an older market player and utilises 11 smaller aircraft, Dash-8s and Cessnas to transport passengers to about 13 domestic destinations, such as Kilimanjaro, from its base at the Wilson International Airport in Nairobi.

While Kenya is well served by smaller fleets and LCCs, and a number of these are expanding their offerings, it is nonetheless an evolving business. AirKenya, for instance, announced that it will be discontinuing its coastal routes connecting Diani, Lamu and Malindi from 2019 to develop other services, such as a planned route between Mara and Entebbe starting June 2019.

Larger Carrier

Kenya Airways is in the midst of a recovery and restructuring programme that could help boost the tourism sector by offering improved direct connections and services. Founded in 1977, the airline has had a mixed history, expanding too rapidly at first and suffering from market volatility in recent years. The company reported the largest corporate loss in Kenyan history in FY 2015/16. While it continued to record losses, performance has since improved, with 3.1% revenue growth recorded in the first half of 2018.

In 2017 the carrier underwent a restructuring to put the airline on sound footing. In a massive debt-to-equity swap the government increased its stake from 29.8% to 48.9%, and the banks agreed to convert about $400m to stock. The Air France-KLM holding was reduced from 26.7% to 7.8%, while the International Finance Corporation and retail investors were all significantly diluted. Overall, the government and 11 local banks ended up taking over approximately 90% of the company.

With the restructuring has come changes to routes, which could provide the broader sector with a welcome boost. Kenya Airways – the sixth-largest carrier in Africa with 4.45m passengers in FY 2016/17 – will add an additional weekly flight to Mauritius beginning in November 2018. It also began code-sharing with Delta Airlines for routes from Nairobi to Europe, as well as for some routes beyond Nairobi, and it increased the frequency of flights to Amsterdam. Spokespeople for the airline said it was considering adding 20 new services – including a European and Asian route – over 2018-23 period as a part of its recovery efforts. The airline will also take back five aircraft it had sublet.

These initiatives have seen passenger numbers rising, while load factors are returning to healthy levels. Passengers numbers have increased by 71% over a decade, and in FY 2016/17 the load factor hit 72.3%, up from a low of 63.6% in FY 2014/2015 and approaching its recent peak of 73.6% in FY 2007/08. Transatlantic services are anticipated to further bolster this performance, supported by agreements signed by President Kenyatta and US President Donald Trump in 2018. After receiving a number of key approvals since 2017, the airline is beginning to offer direct services between New York and Nairobi on October 28, 2018. Tickets for the daily service went on sale early in the year, with prices as low as KSh87,000 ($852).

Kenya Airways believes that the flights will play a significant role in its future success, forecasting the service will help increase earnings by 10% in 2019. For tourists from the US the direct connection will make a significant difference, reducing travel time from 25 hours to 15, thus more conveniently linking Kenya with its biggest single source for tourists. This is also set to improve trade of certain perishable items. In addition to its large domestic carriers, Kenya is working to attract international LCCs, such as Ryanair and easyJet, to expand inexpensive and direct connections from the UK to its beaches and safari areas.

Ground Transport

The Standard-Gauge Railway project, which ended its first phase in January 2018 and is receiving KSh74.7bn ($732m) for the second phase, is helping the development of safari tourism, with tour operators telling industry press that this will reduce road traffic, and that they would use rail instead of air travel on trips to Tsavo National Park. The local market is a source of increased demand. With the opening of the twice-daily Madaraka Express train connecting Nairobi and Mombasa, the rise of LCCs, the improvement of various roads and the upgrading of airstrips, vacations are now more within reach for citizens of all income levels. In addition to land and air travel, cruise tourism is an area of focus. The Kenya Ports Authority noted an increase in arrivals during the 2017-18 cruise season, with six ships docking at Mombasa between October 2017 and March 2018. A cruise terminal is being built at Mombasa with the help of TradeMark East Africa to allow for the simultaneous docking of two ships. However, its anticipated completion date has been delayed from August 2018 to July 2019.

The government’s Kenya Tourism Board (KTB) anticipates the 2018 Kenya Open Golf Championship to promote the country as a golf tourism destination. The competition has been held since 1967, but the prize was increased by 127% in 2018 to KSh62.5m ($612,000). It now offers the highest monetary award in the European Challenge Tour, and this is set to double to KSh126m ($1.2m) in 2019. Betty Radier, CEO of the KTB, noted that the championship demonstrates Kenya’s strong golf history and tradition, with more than 40 golf courses, long days and favourable weather.

Further events are being planned, such as the first-ever international film festival in the country, set to be held in Malindi in Kilifi County in late 2018. Additionally, the return of flamingos to Lake Nakuru National Park is helping improve tourism in the North Rift area. Hotels report increased bookings, especially from Asian countries and within Kenya itself. The KSh5bn ($49m) Chemususu Dam Project has helped the lake recover and encouraged the birds to return.

Wildlife & Conversation

In early 2018 the wildlife remit was moved from the Ministry of Environment and Natural Resources to the newly established Ministry of Tourism and Wildlife. This move recognises that conservation is central the country’s success as a tourist destination. The shift in wildlife management marks a return to the country’s historical norms, with natural features marketed along with other attractions. In support of this changing view of conservation as a measure to benefit tourism, public-private partnerships are being explored. With the cooperation of the Chinese firm Alibaba, Kenya will be using cloud computing, artificial intelligence and the internet of things to manage the 13,500-sq-km Tsavo East and West National Parks. The technologies will use data collected from sensors, drones and traps to analyse wildlife in the parks, as well as reduce poaching and other illegal activity.

County Plans

The KTB has called for county governments to contribute to a national calendar of events to help diversify away from safari and beach tourism. “Kenya cannot rely only on safaris and beach tourism,” Hashim Mohamed, principal and CEO of Kenya Utalli College in Nairobi, told OBG. “Tourist destinations are about experiences that are unique and authentic, and every country should develop niche products that are unique and marketable.” County officials have said they would like to take the lead in their marketing efforts, as they are better suited to publicising what their respective regions have to offer. Although tourism remains a largely centralised endeavour, they are campaigning to bring devolution to the sector.

Hotel Infrastructure

According to global consultancy PwC, Kenya’s hospitality sector is set to grow by 8% in 2018 and receive 2.06m visitors in 2022. The country plans to add 1800 rooms to the market by 2020 and 2600 rooms by 2022, bringing the total number to 21,700. This would represent a 14% rise from the 17,000 hotel rooms at the end of 2017. That year, hotels had an occupancy rate of 47.3%, down from 52.9% in 2016.

Some areas are still facing difficulties. As the number of visitors to the coastal regions has declined, hotels have also closed, and many establishments have been put up for sale. Meanwhile, some properties have seen an uptick as improved transport links have helped boost domestic tourism. Others choose to market themselves as meeting, incentive, convention and exhibition centres. Groups attending these events book in large numbers and well in advance, which helps boost bookings. Hotels in Watamu, Kilifi County, recorded 50% occupancy in early 2018, up from 30% in the same period a year prior. Some hotels reported occupancy rates as high as 90%, with most visitors coming from Europe.

The trend in the tourism sector is clearly positive. After a difficult period, the numbers are climbing towards new heights. However, connectivity is an area with potential for development. “There is room for improvement on issues of connectivity and the product,” Susan M Ongalo, CEO of the Kenya Tourism Federation, an association of private sector players, told OBG. “We have been doing the same thing for so long and getting the same results, hence it is time to place more effort on diversification.”

In an effort to achieve this diversification, the country is looking to offer a more contemporary experience, combining traditional attractions with new offerings. If players rely solely on conventional measures, they will face natural limits. However, Kenya has major-destination potential if it builds on its already solid foundations.

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Kenya woos EAC peers with infrastructure in tourism growth plan

Uganda and tanzania are kenya’s second and third top market sources for international visitors..

•Last year, visitors from Uganda totaled 80,067 while Tanzania arrivals were 74,051 with business and MICE being the main reason.

•The country is seen to diversify from the traditional beach and safari products it has been competing with Tanzania for years.

An aerial view of Nairobi City.

Kenya is fronting its infrastructure and investment by global brands in the country as part of its attractiveness, in a move seeking to increase visitor numbers from the region.

This is in addition to the traditional beach and safari products, which it is competing for the market with neighbouring Tanzania.

Kenya Tourism Board is also marketing Kenya as a medical tourist destination in the region, together with over 40 signature experiences among them mountaineering, humpback whale watching, mountaineering and running with the country’s renowned athletes.

KTB regional marketing manager Alex Tunoi said the country has invested heavily in infrastructure, which has made its four cities easy to access and navigate.

These includes investment in key airport facilities among them JKIA, Moi Airport (Mombasa), Kisumu, Eldoret, Malindi, Lamu and Ukunda, and and an expansive rail and road network.

The Sh87.9 billion Nairobi Expressway which is nearing completion will  make it convenient for travellers to move between the Jomo Kenyatta International Airport ,hotels and tourist attraction cites in the city.

The Standard Gauge Railway, regional and local airlines have also made it convenient to travel into the country and connect to the coastal city of Mombasa and parks around the country, Tunoi said.

High end hospitals and wellness facilities also make Kenya a medical tourism destination.

International brands have also set base in the country, mainly Nairobi, Tunoi said, making Kenya a leading shopping destination in the region.

“You don’t have to travel far to shop. Kenyan will give you an excellent shopping experience,” he said during a virtual meeting that brought together industry players from the East African Community, on Thursday.

The country is currently putting in place a strong post-Covid recovery strategy targeted at domestic, regional and international visitors.

Uganda and Tanzania are Kenya’s second and third top market sources for international visitors, respectively, after the US.

Last year, visitors from Uganda totaled 80,067 while Tanzania arrivals were 74,051 with business and MICE (meetings, incentives, conferences and exhibitions) being the main reason.

The US led with 136,981 as the sector showed recovery signs on international arrivals which increased 53.3 per cent, to 870,465, up from 567,848 in 202.

Meanwhile, the East African Community is keen to market the region to the international markets as a block, while increasing intra-regional tourism and travel.

“We must have an EAC strategy for post Covid recovery,” said Simon Kiarie, Principal Tourism Officer at the EAC secretariat, “We need to develop multi-destination packages.”

The region targets to attract at least 14 million international arrivals by 2025, with over 30 million people being able to travel across the EAC.

Tourism accounts for up to 10 per cent of the region’s GDP, creating over four million jobs.

During the pandemic, arrivals dropped by more than 70 per cent to 2.2 million with over two millions jobs lost.

Covid hit 1.2m jobs in Kenya’s tourism last year– report

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The construction industry in Kenya is driven primarily by two key infrastructure sectors: transportation and building/housing. The Ministry of Transport and Infrastructure is responsible for policy initiatives and actions with respect to roads, aviation, maritime, rail, housing, and urban development.

According to the Kenya Economic Survey 2022, the Kenyan construction industry grew by only 6.6% in 2021, a decline from 10.1% in 2020 and an indication of a slowdown in the short term. The sector is expected to maintain a growth rate of 6% in the near term as it shakes off the effects of the COVID-19 pandemic. This growth will be driven by large infrastructure projects in roads, ports, and airports in 2022 and beyond. Due to budgetary constraints, the GOK hopes to realize more infrastructure projects as PPPs.

In 2018, the GOK announced an ambitious development agenda dubbed “the Big Four” that aims at addressing issues related to affordable housing, universal healthcare, growing manufacturing, and food security. On affordable housing, the GOK’s goal of building 500,000 homes continues to take shape, albeit slowly, with only 431 units realized by the end of 2021.

Leading Sub-Sectors

U.S. firms have opportunities in the road and railway construction sectors and may also offer engineering design, consultancy, and supervision services in partnership with local firms.

Transport Infrastructure: Kenya enjoys an extensive but uneven infrastructure that remains superior to that of its neighbors. Nairobi is the transportation hub of eastern and central Africa and is the largest city between Cairo and Johannesburg. The Port of Mombasa is the most important deep-water port in the region, supplying the shipping needs of more than a dozen countries despite persistent deficiencies in equipment, inefficiency, and corruption. To remedy these deficiencies, the Port of Mombasa has been undergoing major expansion and rehabilitation.

According to the World Bank, Kenya needs to invest $4bn annually over the next decade to close the existing infrastructure deficit. The transportation infrastructure sector, however, requires additional private sector participation through PPPs to ease the debt burden on the government. To encourage investors, the National Treasury, through the PPP Unit, has strengthened the legal framework governing PPPs and has identified various infrastructure projects for implementation as PPPs. A list of the projects is available on the PPP Unit website  (http://portal.pppunit.go.ke/)

Road Infrastructure: Out of Kenya’s total 246,757 kilometers of road networks, both classified and unclassified, only about 21,583 kilometers are paved. To fast-track the development of rural bitumen roads, the Kenyan Government has earmarked 10,000 kilometers of roads countrywide for development under the Low Volume Seal Roads (LVSR) Program. So far, 4,400 kilometers have been completed, with major works underway to reach the target. In addition, Kenya’s Road Annuity Program recorded its first success with the attainment of financial close on two new roads to be developed as PPPs in central and western Kenya, with the World Bank’s MIGA providing guarantees.  The program, aimed at developing 10,000 kilometers of road through contractor-facilitated financing mechanisms, has been slow to take off due to local banks’ failure to fund the program. Eight lots are still listed for development under the annuity program on the PPP portal.

Kenya has reintroduced toll roads with private sector participation, given the recent completion of the 27-kilometer Nairobi Expressway. In addition, four other major roads have been earmarked for tolling under a PPP plan, including the Nairobi-Nakuru-Mau Summit Highway currently under construction, Thika Road, Nairobi’s Southern Bypass, and a second Nyali bridge in Mombasa city. Finally, the Ministry of Transport and Infrastructure has identified five bus rapid transit (BRT) corridors for development within the Nairobi Metropolitan Area.  The Line Two pilot along Thika Superhighway is currently under construction, with the other lines to be developed as funding is made available.

Currently, there are various roadworks going on, including road construction, dualling, upgrading, and rehabilitation, and bridges and interchanges construction measuring 2,300 kilometers and being carried out at a total cost of $2.2 billion. 

Airport Infrastructure: Kenya has international airports in Nairobi, Mombasa, Eldoret, and Kisumu, and domestic airports in Nairobi, Malindi, Lamu, and Lokichogio (Turkana), in addition to another 463 aerodromes and airstrips. All public airport facilities are managed by the Kenya Airports Authority (KAA). The aviation industry took a big hit during the COVID-19 pandemic, which saw the industry grind to a halt.  However, the sector is rebounding as travel restrictions are lifted and travel and tourism resume globally.

Several of Kenya’s airports have been earmarked for expansion. An ongoing modernization program at Jomo Kenyatta International Airport (JKIA) will include the construction of modern terminals, a national airport masterplan, installation of integrated security systems at all major airports, installation of communication equipment, and institutional capacity building. JKIA is the busiest airport in east and central Africa and is the seventh busiest on the continent. Originally built in the 1970s to serve 2.5 million passengers annually, the ongoing modernization and expansion program at the airport is being done while the airport has seen its capacity increase to 7.5 million. The current projects aim to increase capacity to 20 million passengers by 2030. Kenya intends to build a second runway at JKIA and has received $160 million from the African Development Bank for this project.

Other airport expansion projects include the ongoing expansion or construction of the Malindi, Isiolo, and Lokichogio airports, the Suneka airstrip, and the rehabilitation of airstrips in all 47 counties. The Malindi Airport expansion, valued at $54 million, will enable the facility to handle international flights and includes an extension of the existing runway and apron, a modern terminal building, a control tower, fire and meteorological stations, and enhanced security features. Moi International Airport in Mombasa received $66 million from the French Development Agency (AFD) for rehabilitation and construction of airside pavements, airfield ground lighting, and upgrading of power and water supply.

Improvement works at Lokichogio, Lamu, Manda Island, and Isiolo Airports have been ongoing, with some of these airports already operational with scheduled flights. The provision of airport facilities will strengthen air transport and logistics services along the corridor in readiness for the construction of the three international airports at the three locations in the future.

Maritime Infrastructure: Kenya’s sole seaport in Mombasa is the largest port in east Africa and the second largest in Africa, serving both Kenya and neighboring countries, including Uganda, Rwanda, South Sudan, Tanzania, Burundi, and the Democratic Republic of Congo. The Kenya Ports Authority (KPA) is the government agency mandated to maintain, operate, and regulate scheduled seaports along Kenya’s coastline. The Port of Mombasa recently completed Phase 1 of the Mombasa Port Development Project (MPDP), which included the construction of a second container terminal, three additional berths, two ship-to-shore cranes and four rubber-tire gantry cranes. The project was funded by the Japanese Government at the cost of $217 million.

Construction of the Port of Lamu in northern Kenya under the Lamu Port-South Sudan-Ethiopia-Transport ( LAPSSET ) corridor is east Africa’s largest and most ambitious infrastructure project. Upon completion, the $5 billion project will consist of 32 berths. The first phase includes dredging and reclamation, construction of three berths and yards, a causeway and road, buildings, and utilities and is financed by China at a cost of $700 million. Berth 1 is already complete, while berths 2 and 3 are 70% complete. Kenya intends to develop the remaining 29 berths using a PPP model financed by the private sector.

Rail Infrastructure: Kenya’s total rail network has 2,778 kilometers of narrow meter gauge rail (MGR) and 545 kilometers of the Chinese-funded standard gauge rail (SGR) from Mombasa to Naivasha and is managed by the Kenya Railways Corporation (KRC), a state corporation mandated to provide rail and inland waterways transport.  

Kenya has partnered with the United Kingdom to develop the Nairobi Railway City, a new rail hub within the Central Business District. UK firm Atkin Global won the bid to design a modern, eight-platform central rail station and a public space, which will anchor commercial and residential developments on a 425-acre spread that will host the Nairobi railway transit hub. Rail infrastructure will take up the lion’s share of the project. The initial phase of the project is being funded by the UK government while consulting firm KPMG is leading the search for investors into the projects that offer commercial viability such as residential homes, commercial buildings, and parking lots. The Railway City will be developed in three phases over 20 years. Construction of the railway station is expected to begin by the end of 2022.

Commercial Construction: The Kenyan construction sector will continue to be supported by the growing real estate sector, particularly hotels, offices, and retail developments, as investors continue to enter east Africa through Nairobi. Prominent hotel brands operating in the market or planning to enter in the near term include New York-based hotel group Carlson Rezidor, Hilton, JW Marriott, Pullman, Best Western, Starwood Hotels and Resorts Worldwide, and Swiss-based Movenpick Hotels and Resorts. Developments are focused on increasing bed capacity as well as providing conference facilities to adequately cater to rising domestic and international business demands. According to the Kenya Investment Authority, 27 global hotel brands have announced plans to open new or additional facilities by 2023.

Opportunities

Given Kenya’s current high debt burden, the government is increasingly looking to the private sector to implement infrastructure projects either under the Engineering Procurement and Construction (EPC)+Finance model or as PPP projects. Various types of PPPs are available and include management contracts; concessions; Build, Operate, and Transfer (BOT); Build, Own, Operate, and Transfer (BOOT); or Rehabilitate-Operate-Transfer (ROT). A comprehensive list of approved PPP projects is available on the PPP Unit website. In addition, companies are welcome to propose projects under the Privately Initiated Investment Proposal (PIIP) model.

The best prospects for U.S. exporters include the supply of new and used construction equipment, such as light and heavy earth-moving equipment, loaders, crawlers, tippers, excavators, compactors, graders, quarry mining equipment, low-cost road maintenance options, low-cost housing construction technology, consultancy, and development and planning services.

Kenya uses right-hand drive vehicles, so machines with controls in the center are better sellers.

Additional opportunities include:

  • A variety of road, bridge, and dam construction and rehabilitation projects.
  • Construction of a $370 million second runway at JKIA and expansion and modernization of several other airports. 
  • Development of commuter rail services for the cities of Nairobi, Mombasa, and Kisumu at a cost of $125 million.
  • Various infrastructure PPP projects earmarked by the National Treasury.
  • The 500,000 affordable housing program under the State Department for Housing. Kenya is looking for strategic partners to develop mass low cost and affordable housing. Details can be found on the Boma Yangu website .
  • Nairobi Metropolitan Transport Authority (NaMATA) – Bus Rapid Transport (BRT) facilities within five counties (Nairobi, Muranga, Machakos, Kiambu, and Kajiado). 
  • Opportunities also exist for consultancy and planning services.  

Local Trade Show

The Big 5 Construct Kenya

For more information on the infrastructure sector, contact:

Mary Masyuko Senior Commercial Specialist U.S. Commercial Service, U.S. Embassy Nairobi U.S. Department of Commerce | International Trade Administration Tel: +254 (20) 363-6063;  [email protected]

tourism infrastructure in kenya

Investing in Kenya's Tourism and MICE sectors offers a unique blend of untapped potential, economic stability, strategic location, and government support.

tourism infrastructure in kenya

Why Kenya For Tourism and MICE

tourism infrastructure in kenya

Untapped Potential

Kenya boasts diverse landscapes, including wildlife-rich national parks, pristine beaches, and cultural heritage sites. there is substantial untapped potential, especially in emerging markets and niche segments

Stable Economic Environment

Kenya has maintained a relatively stable economic environment in the region, fostering an attractive investment climate. The government's commitment to economic reforms and infrastructure development further enhances the stability of the investment landscape.

Strategic Location

Kenya's strategic location in East Africa makes it a gateway to the region, attracting tourists and businesses alike. With well-connected transportation infrastructure, including a modern international airport, investors can leverage Kenya as a hub for regional tourism and MICE activities.

Growing Middle Class and Disposable Income

Kenya's middle class is expanding, leading to an increase in disposable income. This rising middle class represents a growing market for domestic tourism, and as more Kenyans have the means to travel, the overall tourism and hospitality sectors are expected to see sustained growth.

Government Support and Incentives

The Kenyan government actively supports the tourism industry, recognizing its potential as a key driver of economic growth. Investors can benefit from various incentives, including tax breaks, grants, and initiatives aimed at promoting sustainable tourism practices.

Innovative Tourism Products

The industry is evolving to meet changing consumer preferences. Investments in innovative tourism products, such as eco-friendly resorts, adventure tourism, and cultural experiences, can attract a broader range of tourists and contribute to the sector's growth.

MICE Sector Growth

Kenya is emerging as a preferred destination for conferences, exhibitions, and business events in Africa. The MICE sector has witnessed significant growth, driven by world-class conference facilities, improved infrastructure, and the country's attractiveness as a business hub.

Sustainable Tourism Practices

There is a growing global demand for sustainable tourism, and Kenya is actively promoting eco-friendly practices. Investors focusing on sustainable tourism initiatives can tap into a conscientious market while contributing to the long-term preservation of Kenya's natural and cultural assets.

Investment Opportunities

tourism infrastructure in kenya

Investment opportunities in tourism in Kenya span various segments. Here are key areas where investors can explore opportunities.

Hospitality and Accommodation

Develop and invest in hotels, resorts, and lodges catering to diverse preferences, including luxury, eco-friendly, and budget accommodations.

Tour Operators and Travel Agencies

Establish or invest in tour operators and travel agencies to organize and facilitate tourist experiences, including wildlife safaris, cultural tours, and adventure packages

Conference and Exhibition Centres

Invest in state-of-the-art conference and exhibition facilities to capitalize on the growing demand for MICE events in the region.

Infrastructure Development

Contribute to infrastructure development, including transportation (roads, airports), to enhance accessibility to key tourist destinations and facilitate smooth travel experiences.

Adventure Tourism Ventures

Explore opportunities in adventure tourism, such as hiking, mountain biking, and water sports, capitalizing on Kenya's diverse landscapes.

Cultural and Heritage Tourism

Support projects that promote and preserve Kenya's rich cultural heritage, including investments in museums, cultural villages, and historical sites.

Wildlife Conservation Initiatives

Invest in wildlife conservation projects, supporting efforts to protect endangered species and promote sustainable tourism practices.

Eco-Friendly Resorts and Sustainable Practices

Develop or invest in eco-friendly resorts and initiatives promoting sustainable tourism, aligning with global trends and meeting the demand for environmentally conscious travel.

Technology and Digital Solutions

Explore opportunities in technology solutions for the tourism industry, such as mobile apps, online booking platforms, and virtual reality experiences.

Specialised Tourist Experiences

Create or invest in unique and specialised tourist experiences, including culinary tourism, wellness retreats, and agro-tourism

Community-Based Tourism Initiatives

Support community-based tourism projects that empower local communities, providing authentic experiences while contributing to local economies.

Investment in Training and Skill Development

Contribute to training programs and skill development initiatives to enhance the quality of service in the hospitality and tourism sectors.

Waste Management and Environmental Initiatives

Invest in projects that address waste management and environmental sustainability within the tourism industry, aligning with global green practices.

Investment in Marketing and Promotion

Support or engage in marketing and promotional activities to attract international and domestic tourists, enhancing the visibility of Kenya as a premier tourist destination

Real Estate Development

Explore opportunities in real estate development, including vacation homes, timeshares, and residential properties in tourist-friendly locations.

Other Investment Opportunities

Join us in unlocking the full potential of Kenya – a land of opportunity, innovation, and progress. Invest in Kenya, and together, let's build a future of shared prosperity.

tourism infrastructure in kenya

Financial Services

By investing in Kenya's financial services sector, investors not only position themselves at the forefront of financial innovation but also contribute to the country's journey towards economic prosperity and inclusivity.

tourism infrastructure in kenya

Kenya's ICT sector presents a compelling opportunity for forward-thinking innovators seeking sustainable growth, and a strategic entry point into Africa's growing digital landscape.

tourism infrastructure in kenya

Economic stability, infrastructure development, incentives for real estate developers, a rising mortgage market, and opportunities in tourism and hospitality further contribute to the potential in the sector.

Explore more Opportunities »

Testimonials

tourism infrastructure in kenya

Richard Quest

Business reporter, cnn.

I have traveled to many countries to report on business news, However nothing matches the business acumen and readiness for investment that I have observed in Kenya Including the world Bank optimism to a marvelous GDP growth. I must says Kenya is the new business Destination in Africa

tourism infrastructure in kenya

Christine Lagard

President, european central bank.

Kenya has emerged as one of Africa’s ‘frontier economies’, and I am very interested in learning how the  country’s leaders and people will build on this success moving forward

tourism infrastructure in kenya

John Gershenson, PhD

Ceo, kijenzi.

Kenya is uniquely positioned to lead a surge in localized supply chains. Kijenzi is excited to unleash the next generation of digital manufacturing to feed the incredible innovation engine and enable a more resilient industry across the country and region. Manufacturing is the heartbeat of a growing GDP

tourism infrastructure in kenya

Brijesh Bakhda

Managing director, durham international schools.

Kenya is well known for its value on education, and we quickly saw Nairobi as an excellent destination for the first Durham International School in Africa. We are confident that families in the capital will welcome the quality and ethos of education that Durham offers. KenInvest has provided a warm welcome and great support as we planned and opened Durham Kenya

tourism infrastructure in kenya

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FurtherAfrica

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  • Understanding

FurtherAfrica

Kenya’s tourism sector growth impressive in the first half of 2023

The Exchange

In the six months to June 2023, the United States remained the leading source market for Kenya’s tourism sector growth.

  • Americans are familiar with Kenya’s Mount Kenya region and the Maasai Mara National Reserve, which offers Safari experiences.
  • Uganda was the second leading source of travelers with 89,968 (10.6%), Tanzania came in third with 69,777 (8.2%), the UK fourth with 65,563 (7.7%) while India closed the top five list.

International tourist arrivals grew 32 per cent in the half-year to June, closing at 847,810 as the Kenya’s tourism sector growth continued post-Covid-19. This was up from 642,861 arrivals recorded in the same period last year, official data by the Ministry of Tourism indicates.

Also read:  Kenya to abolish visa requirement for Mozambique

The performance represents a 92 per cent recovery compared to the 2019 in same period. The increased numbers came with higher earnings for the country and the sector.

“The tourism sector in Kenya experienced a remarkable upswing in international arrivals leading to a positive effect on the country’s tourism receipts,” Kenya Tourism Board said.

During the half-year period, the total tourism receipts surged to $1.1 billion (Ksh152.6 billion), reflecting an impressive growth rate of 31 per cent compared to the previous year’s earnings of $804.7 million (Ksh.116.2 billion).

Top source markets

In the first half of 2023, the US remained the leading source market for Kenya’s tourism sector growth, closing at 118,480 North American tourists who visited Kenya. Americans are familiar with Kenya’s Mount Kenya region and the Maasai Mara National Reserve, which offers Safari experiences. American visitors during the six months accounted for 14 per cent of the total arrivals.

Most European tourists from the UK, Germany, and Italy prefer the coastal region (Mombasa, Diani, Malindi, Kilifi, and Lamu), competing with Dar es Salaam and Zanzibar as leading beach holiday destinations in East Africa.

Uganda was the second leading source with 89,968 (10.6 per cent), Tanzania came in third with 69,777 (8.2 per cent), the UK fourth with 65,563 (7.7 per cent) while India closed the top five list with 42,805 arrival (5 per cent).

Some key markets have surpassed 2019 half–year performance, KTB said, notably the US by seven per cent in 2019 from 110,743 to 118,480; Italy by 15.6 per cent from 22,017 to 25,451; Germany by four per cent from 32,142 to 33,418 and Rwanda by 34.5 per cent from 18,845 to 25,422.

Ethiopia also surpassed last year’s arrivals by 66.1 per cent from 11,018 to 18,296; the Netherlands by 6.9 per cent from 19,123 to 20,442; Nigeria by 7.3 per cent from 15,307 to 16,424; Ghana by 28.1 per cent from 5,137 to 6,583 and Russia by 40.8 per cent from 2,514 to 3,539.

Also read:  Airtel Kenya aims to invest more than US$150M to expand its network coverage

Purpose of entry.

The government statistics indicated that the period holiday was the primary purpose of entry closing at 338,509 (39.9 per cent). Business & MICE (Meetings, Incentives, Conferences, and Exhibitions) was the second primary purpose if visiting Kenya by international tourists.

During the period under review, 226,908 (26.8 per cent) were in the country for meetings, conferences, and business deals. Those visiting family and friends totaled 213,417 arrivals, the third primary purpose of touring Kenya. On Transit passengers were 44,620 (5.3 per cent), while other purposes, among them education, medical, religion, and sports totaled 24,356.

The country’s biggest airport and regional aviation hub, the Jomo Kenyatta International Airport in Nairobi, was the main entry point recording 589,553 visitors. Mombasa’s Moi International Airport was the second entry point with 65,468 arrivals, while other airports recorded a combined appearance of 3, 671 mainly small planes and private jets. Moreover, entries through border points totaled 189,118, with Ugandan and Tanzanians crossing over mainly for business.

Domestic bed nights

Domestic tourism also had positive growth, with bed nights recording a 16 per cent increase in 2023 (January – June), closing at 2.3 million, compared to 2.02 million same period last year.

“The best performing months were April and June, which can be attributed to the Easter holidays and business travel, respectively,” KTB said in its report.

Domestic tourism has remained vital in cushioning the tourism and hospitality industry in the country since the onset of the Covid-19 pandemic in 2020. With international numbers picking up, local industry players are also hoping to sustain the domestic market despite reduced incomes by households in the wake of high inflation.

“Disposable income has reduced with many households seeking to meet basic needs first before planning for holidays. This is likely to affect how the domestic market spends,” said Sam Ikwaye, the Kenya Association of Hotel Keepers and Caterers executive, Coast region.

Also read:  Grey List – Mozambique and Kenya agrees to share information on terrorism

Global performance and outlook.

International tourism recovered 63 per cent of pre-pandemic levels in 2022, with Europe and the Middle East in the lead, according to the UNWTO.

Significant pent-up demand and the lifting or relaxation of travel restrictions in many countries backed up the stronger-than-expected results.

Approximately 900 million tourists traveled internationally in 2022, double those in 2021 though still 37 per cent fewer than in 2019.

Looking ahead, international tourism will consolidate its recovery in 2023, backed by pent-up demand, particularly from Asia and the Pacific, as destinations and markets open up.

The UNWTO Panel of Experts Survey indicates that 72 per cent of respondents expect better performance in 2023.

However, most experts (65 per cent) also believe international tourism will not return to 2019 levels until 2024 or later.

Based on UNWTO’s scenarios for 2023, international tourist arrivals could reach 80 per cent to 95 per cent of pre-pandemic levels this year, with Europe and the Middle East expected to reach those levels.

However, important risks remain ahead, primarily economic and geopolitical.

“Tourists are expected to increasingly seek value for money and travel close to home in response to the challenging economic environment,” UNWTO said.

The complete recovery, however remains subject to certain risks like a potential economic slowdown amid high inflation and rapid interest hikes, which have increased financial costs and debt levels.

Also read:  What tourists should know before visiting Kenya

Higher food and energy prices result in lower purchasing power and weaker consumer confidence, which could weigh on travel demand in 2023, especially in spending. The Russian offensive in Ukraine and geopolitical tensions in North-East Asia could also disrupt the normal travel, UNWTO noted further.

The Exchange

News analysis and comment from the The Exchange, a leading publication providing economic news and analysis on the capital markets of Africa, with a specific interest in Kenya, Uganda, Tanzania, Rwanda, Burundi, Ethiopia and Congo. We provide features in banking, capital markets, energy, mining, manufacturing and industrial development.

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The World Bank

The World Bank in Kenya

The World Bank’s work in Kenya supports the government’s Vision 2030 development strategy, which aims to accelerate sustainable growth, reduce inequality, and manage resource scarcity.

The country has made significant political and economic reforms that have contributed to sustained economic growth, social development, and political stability gains over the past decade. However, its key development challenges still include poverty, inequality, youth unemployment, transparency and accountability, climate change, continued weak private sector investment, and the vulnerability of the economy to internal and external shocks. Furthermore, Kenya’s robust growth before the COVID-19 pandemic was largely driven by the public sector, resulting in debt vulnerabilities which have exacerbated amid tightening global financing conditions.

Kenya’s growth performance over the past two decades has been strong. The economy achieved broad-based growth, averaging 4.8% per year between 2015 and 2019, similar to the Lower Middle-Income Country average of 4.8 and above the Sub-Saharan Africa average of 2.4%.

In 2020, the COVID-19 pandemic shock hit the economy hard, disrupting international trade and transport, tourism, and urban services activity. Fortunately, the agricultural sector, a cornerstone of the economy, remained resilient, helping to limit the contraction in GDP to only 0.3%. The pandemic also reversed Kenya’s hard-earned gains in poverty reduction. In 2021, the economy staged a strong recovery, growing at 7.5%, although some sectors, such as tourism, remained under pressure.

Kenya’s economy continues to show considerable resilience in the face of recent shocks, including the lasting economic effects of the COVID-19 pandemic, the global impacts of the war in Ukraine, two consecutive years of droughts, tight monetary policy, and depreciation of the currency. Kenya’s real GDP expanded at an estimated 5.4% in 2023 from 4.8 % in 2022. The agricultural sector experienced a stronger than expected rebound after two years of drought. The onset of the rains led to improved crop yields and livestock health, which supported the resumption of a downward trajectory for poverty rates. The poverty rate ($2.15 international poverty rate) is projected to have declined from 35.8% in 2022 to 35.1% in 2023.

Kenya’s growth is projected to reach 5.2% on average during 2024-2026, mainly driven by the private sector as business confidence strengthens and the public sector continues to scale back. Kenya’s growth is also expected to benefit from the implementation of the recently signed trade agreements under the European Union Economic Partnership Agreement, African Continental Free Trade Area.

Although the economic outlook is broadly positive, it is subject to elevated uncertainty. The failure to achieve fiscal consolidation targets could exacerbate Kenya’s debt vulnerabilities, especially due to the high-debt service repayments. Climate hazards could resume inflationary pressures and food insecurity, affecting growth. Lower than anticipated growth in developed countries could undercut ongoing recovery in tourism, exports, and remittances. Elevated commodity prices would further tighten financial conditions, weaken external balances, and impact inflation.

World Bank support to Kenya includes budget support to help close the fiscal financing gap while supporting reforms that help advance the government’s inclusive growth agenda.  

In addition to aligning the country’s long-term development agenda to Kenya’s Vision 2030−which aims to transform Kenya into a competitive and prosperous country with a high quality of life−the government’s bottom-up economic model prioritizes agriculture, healthcare, affordable housing, micro and small enterprises, and the digital and creative economy.

Last Updated: Apr 08, 2024

The FY23-FY28 Country Partnership Framework (CPF), endorsed by the World Bank Group (WBG) Board of Executive Directors in November 2022, set out the strategy to support Kenya’s transformation into a middle-income economy that achieves inclusivity and resilience and builds on the WBG’s comparative advantages in Kenya. The CPF drew from the WBG’s Country Partnership Strategy (CPS) FY14-FY20 for Kenya, lessons from the CPS Completion and Learning Review (FY22), the FY20 Systematic Country Diagnostic, a Country Private Sector Diagnostic (FY19), over 34 stakeholder consultations, and is aligned to the Kenya Vision 2030. It also aligns directly with the World Bank’s Africa Strategy, focused on jobs and economic transformation, digital economy, human capital, universal access to electricity, climate change mitigation and adaptation, addressing fragility, conflict, and violence, and achieving gender equality.

The International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD) portfolio stands at $7.81 billion in 38 projects: 27 national and 11 regional projects.

Transport takes the largest share of investments at 16%, followed by water at 14%, Finance, Competitiveness & Innovation at 10%, while agriculture and energy and extractives are both at 9% each. Other investments are in education, environment, digital development, governance, health, nutrition and population, poverty and equity, social protection, social sustainability, and inclusion, and in urban.

As of June 30, 2023, the International Finance Corporation’s (IFC) investment portfolio in Kenya totaled $1.16 billion across a number of key sectors, including manufacturing, agribusiness, financial services, infrastructure, and technology. IFC also has an advisory portfolio of $58 million. The advisory program complements IFC’s investments and is growing in key strategic areas such as healthcare, affordable housing, and financial inclusion. Support to small businesses is key to IFC’s work in Kenya and IFC has also been working with financial institutions to increase lending to small businesses and those focused on addressing climate change.

As of February 29, 2024, the Multilateral Investment Guarantee Agency (MIGA) is actively engaged in Kenya with a total gross exposure of $417 million across the energy, financial, fintech, transport, and tourism/hospitality sectors. The seven existing projects include two legacy thermal power projects, two projects in the roads sector, capital optimization for a financial institution, a fintech mobile money project across 12 countries, including Kenya, and a hotel acquisition project. MIGA has also supported the regional development bank, Trade and Development Bank (TDB), of which Kenya is a member. MIGA’s support mobilized $747 million of commercial financing for TDB to expand its trade finance activities with clients in member countries, including support of COVID-19-related trade finance transactions.

Recently approved projects

The Building Resilient and Responsive Health Systems Project ($200M) , approved on March 13, 2024, aims to improve use and quality of primary healthcare services, and strengthen institutional capacity for service delivery.

The Kenya Green and Resilient Expansion of Energy (GREEN) Program Phase 2 Project ($202M) , approved on December 26, 2023, will facilitate increased import of renewable energy and increased capacity of Kenya's system to absorb intermittent renewable energy.

The Kenya Water, Sanitation, and Hygiene Program ($400M) , approved on December 20, 2023, seeks to increase access to water and sanitation services, eliminate open defecation, and improve the financial performance of water services providers in selected counties.

The World Bank has accompanied Kenya on the devolution journey since the start (2013) with over $2 billion of financing committed and under implementation in formally devolved functions and another $3 billion in operations with some geographic focus in counties.

These investments have:

  • Mobilized 848,000 farmers in 45 counties into 35,000 Common Interest Groups and supported their investments for improving productivity, profitability, and climate resilience, improving yields in maize, bean, and potato by 23, 16, and 30%, respectively.
  • Prepared 25,105 titles benefiting 125,000 people, of which 22% were women, and accelerated tenure security regularization in 80 informal settlements in 15 urban areas. Based on this experience, the Government of Kenya is developing guidelines for a community-based approach to tenure regularization.
  • Created over 26,000 jobs in 27 informal settlements across eight counties worst hit by the COVID-19 movement restrictions.
  • Provided over 1.6 million women with access to improved water sources and expanded agricultural land under irrigation from 143,500 hectares in 2010 to 203,508 hectares.
  • Expanded access to a basic package of health, nutrition, and reproductive services to over 6.7 million people and financed the pilot universal health coverage pilots in four counties.
  • Catalyzed the establishment of 59 municipalities across 45 counties, prepared 57 urban integrated development plans and 49 urban spatial plans, and provided over 3.5 million people with improved urban infrastructure.
  • Supported the implementation of the National Capacity Building Framework and helped counties achieve a County Annual Capacity and Performance Assessment score of 71%, exceeding the targeted 55% in September 2021.
  • Rolled out participatory budgeting in 20 out of 47 counties, published a braille version of public participation guidelines, and supported the development of a devolution hub and an online/repository for devolution-related documents.

The World Bank Group has established strong partnerships for knowledge and resources with other development partners, researchers, and agencies that contribute to Kenya’s development. Some of these include the African Development Bank, China, the European Union, the European Investment Bank, France’s Agence Française de Développement, the German Development Bank, the Japan International Cooperation Agency, and the United Kingdom Department for International Development.

History of the Bank's work in Kenya

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The 2023 Africa Country Policy and Institutional Assessment (CPIA) report covers the period January to December 2022. The overall average score for Sub-Saharan Africa’s IDA-eligible countries remained unchanged in 2022 ...

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Maasai giraffe browse alongside geothermal power infrastructure in Hell’s Gate National Park, Kenya. ADAM WELZ

How Kenya’s Push for Development Is Threatening Its Famed Wild Lands

Kenya is pursuing a plan to build an extensive network of roads, power lines, dams, and renewable energy infrastructure. But many of these projects, including wind farms and geothermal facilities, are being constructed in the nation’s iconic parks and wildlife areas.

By Adam Welz • April 24, 2019

Kenya has long been the Western world’s quintessential “Africa,” a land of vast golden savannas filled with zebras, elephants, giraffes, and lions. Despite high-profile terrorist attacks and the high prices charged by its national parks and ecotourist lodges, the country remains extremely popular with foreigners wanting to walk at least a little on the wild side. Visits by international tourists grew by 37 percent last year, reaching 2 million , with tourism revenues hitting $1.6 billion.

But Kenya’s reputation as a top-drawer ecotourist destination and conservation leader could be in jeopardy. Billions of dollars are pouring in for new infrastructure projects — roads, railways, power plants, and power lines — which are being rapidly built to fulfill the aims of Kenya Vision 2030 , the government’s plan to transform Kenya into “a newly-industrializing, middle income country.” Many projects are being constructed in national parks and important conservation areas, threatening rare species. “By 2030,” reads a founding document of the plan, “it will become impossible to refer to any region of our country as ‘remote.’”

Many of the projects that are chipping away at Kenya’s natural heritage are supported by sustainable development funding agencies like the United Nations Environment Programme, the Global Environment Facility (overseen by the World Bank), the U.S. Agency for International Development, and others because the projects are for ostensibly green renewable energy initiatives: geothermal plants, wind farms, hydropower dams, and associated networks of pipelines, power lines, and roads.

Researchers have identified at least 23 sites in Kenya with potential for geothermal power generation, including some in or very near national parks and reserves, like Mount Longonot and Lake Bogoria. Wind farms are going ahead in an area south of the capital, Nairobi, even though expert consultants say they will almost certainly kill significant numbers of threatened and legally protected birds.

Agencies are incentivized to allow infrastructure in protected areas because they get large compensation payments.

The Kenyan government plans to build 57 large dams, many for hydropower, and many in sensitive or protected areas; dam contracts worth $7 billion have already been entered into or are awaiting signing, according to Kenyan news reports . These projects are moving forward despite growing concern that climate change and drought threaten the country’s hydropower potential.

A huge expansion of the electric grid is also in the works to link these power sources, bring electricity to rural areas, and shuttle power between Kenya and neighboring countries; many new power lines will pass through national parks and wildlife-rich areas.

Aside from renewable energy, other major projects pose risks for Kenya’s wildlife and wild places, including the LAPSSET development corridor , billed as eastern Africa’s largest infrastructure project, which is cutting highways, railways, oil pipelines and power lines across remote regions of northern Kenya to stimulate large-scale agriculture and industry. Conservationists say that government agencies mandated to protect the environment are ineffective, contending that the agencies are incentivized to allow infrastructure in protected areas because they get large compensation payments from it.

To be sure, parts of Kenya remain unspoiled and are likely to retain tracts of wildlife-rich wilderness, including the iconic Tsavo East and West national parks and the core of the Maasai Mara National Reserve, as well as some community conservancies in northern Kenya. But even parts of these areas have seen infrastructure development in recent years, and maps of proposed roads and power lines show that they would pass through many of Kenya’s parks or reserves.

Zebras gather beside a pipe connected to geothermal wells near the Olkaria geothermal plant in Hell's Gate National Park. ROBERTO SCHMIDT/AFP/GETTY IMAGES

A trip to Hell’s Gate National Park , a couple of hours’ drive from the capital, Nairobi, provides a sobering vision of the changes coming to many of Kenya’s natural areas. Visitors are lured by photos of the area’s stark cliffs and gorges (one of which resembles the “gateway to hell”) and vivid descriptions of a geologically active landscape marked with lava flows, steaming natural hot springs, and fumaroles. They’re often told that Hell’s Gate is an excellent place to see spectacular and rare birds of prey — large eagles and vultures — and other wildlife.

Few tourist guides mention that Hell’s Gate lies at the heart of Kenya’s efforts to become a world leader in geothermal power generation, which means that visitors entering the park via its Olkaria entrance, as I did during a media tour last month, are immediately confronted by infrastructure: Warehouse-like power plants, networks of roads, pipelines snaking over hills, industrial signage, and thickets of power lines. Towering plumes of steam rise from condensers and wellheads scattered to — and over — the horizon. Machine noise is inescapable. A small group of Maasai giraffes browse nearby, a reminder of the area’s legal status as part of a national park.

Cyrus Karingithi, assistant manager of resource development at Kenya Electricity Generating Company (KenGen), the largely government-owned utility that generates most of Kenya’s electricity, says that KenGen currently has the capacity to generate 1,630 megawatts of electricity, but 50 percent of that is hydropower. This is a problem: Kenya’s climate is drying, and some hydropower dams can no longer reliably run their turbines. Combined with a rapidly growing population, this has caused unacceptably common power cuts, he says.

Kenya’s position astride Africa’s geologically active Rift Valley gives it access to huge geothermal resources. Drill a well down about 10,000 feet and you can tap a virtually limitless source of steam to run massive generators on the surface. In support of Vision 2030, Karingithi says that KenGen will more than double its generation capacity in just five years, to 3,330 megawatts, half of which will be geothermal. The future KenGen will thus be a “green KenGen,” he says.

Corruption is common in infrastructure projects and “bad things happen to those who uncover” it, one conservationist said.

When compared to conventional fossil fuel generation, geothermal power produces far fewer greenhouse gases . But geothermal plants can release other noxious gases and polluted water, and their associated infrastructure can be environmentally damaging, as it has been in Hell’s Gate.

The park and surrounding areas used to be famed for their breeding populations of scavengers and birds of prey, many of them threatened species like bearded vultures, Egyptian vultures, Rüppell’s vultures, African white-backed vultures, martial eagles, and crowned eagles. Of these six species, only one — Rüppell’s vulture — still breeds there, and many other less-threatened raptor species have disappeared. Although geothermal power cannot be solely blamed for the birds’ disappearance, Kenyan researchers have evidence that new well heads have pushed birds out of their territories, and that others have died in KenGen geothermal vents or by colliding with or being electrocuted by power lines. A large spill of contaminated water from a KenGen well once flowed over the main Rüppell’s vulture breeding cliff at Hell’s Gate.

Vultures play an important ecological role in wild African savanna and cattle ranching regions. By rapidly clearing up carcasses, they prevent diseases like anthrax from spreading through animal and human populations. African vultures breed very slowly compared to common American species like turkey and black vultures; when African species vanish, it takes decades to build up ecologically functional populations again. Most African vultures are declining rapidly ; Egyptian, Rüppell’s, and African white-backed are classified as globally endangered by the International Union for Conservation of Nature.

No evidence of serious attempts to build bird-friendly infrastructure in Hell’s Gate or systematically monitor bird deaths was visible during my recent visit there. What was in evidence was extensive use of power line and power pylon types that have been proven to kill significant numbers elsewhere in Africa. The lines could be retrofitted with bird-scaring devices or replaced with bird-safer designs, but this has not been done. KenGen has also proposed five large industrial areas just outside the southern border of Hell’s Gate to take advantage of its electric power and steam.

Impalas pass underneath the Standard Gauge Railway in Nairobi National Park. After conservationists raised objections, the track was elevated to allow for the movement of wildlife. YASUYOSHI CHIBA/AFP/GETTY IMAGES

Many Kenyan conservationists warn that Hell’s Gate is not an anomaly. Top Kenyan officials, including the president himself, have made clear that infrastructure will be pushed into national parks and sensitive areas if it is considered to further the aims of Vision 2030.

Some environmentalists I spoke to refused to be named or quoted, afraid for their jobs or personal safety. Corruption is common in infrastructure projects, one told me, and “bad things happen to those who uncover corruption in Kenya.”

The Standard Gauge Railway (SGR), a centerpiece of Vision 2030, is often cited by environmentalists as a prime example of the government’s determination to ride roughshod over environmental laws and considerations. The SGR is a Chinese-funded and Chinese-constructed line (part of the globe-spanning Belt and Road Initiative ) that will link the Kenyan port of Mombasa with the interior and neighboring countries. Phase 1, from Mombasa to Nairobi, was completed in 2018 at a cost of $3.2 billion. Phase 2, currently under construction, will link Nairobi with Naivasha, a town some 50 miles to the northwest.

Seven alternative routes for the line out of Nairobi were proposed, including some through Nairobi National Park , a world-famous park on the edge of the city. Conservationists pointed out that Kenyan law is clear that no infrastructure can be constructed in a national park unless that park has an up-to-date management plan. Nairobi National Park’s management plan expired in 2010. Nonetheless, the government announced in 2016 that a route bisecting the park had been chosen. This was subjected to numerous court challenges by conservationists, at least two of which resulted in construction stop orders. The government decided that the track would be placed on pillars through the park, so that wildlife could pass underneath, and that the Kenya Wildlife Service (KWS), which manages all national parks, would receive large compensation payments to buy land to extend the park.

Conservation groups warned that one poorly sited wind farm would have a “direct and devastating” effect on rare vultures.

Despite the court-issued stop orders and ongoing court cases, the railway’s Chinese contractors, protected by armed KWS rangers , moved into the park in February 2018 and construction of the line has proceeded rapidly since. “The government just blatantly broke its own laws,” says Jim Karani, legal affairs manager for Wildlife Direct , a Kenyan nonprofit. Karani says that it now appears that compensation money has been used for KWS operational expenses and the park will not be expanding after all. (KWS did not respond to requests for comment.) “If the government can do that right in front of us, to Nairobi National Park,” another conservationist told me, “what hope do less well-known parks have?”

Conservationists also cite a series of wind farms planned for an area south of Nairobi as an example of the government forcing through supposedly green projects that are environmentally damaging. The first of these, Kipeto , is going ahead despite both its proponents and opponents agreeing that its 60 large turbines will likely kill substantial numbers of threatened, protected vulture and eagle species.

“Kipeto ticks every single box for a bad wind farm,” says Andrew Jenkins, a South African bird-of-prey biologist who has consulted on numerous wind projects across the continent, and who researched the Kipeto site. He says its location near the largest colony of the critically endangered Rüppell’s vulture in southern Kenya and in the middle of a flight path for threatened species of migratory birds, means that “it should simply not go ahead” on legal and conservation grounds. “It’s one of the three worst sites for a wind farm that I’ve seen in Africa in terms of its potential to kill threatened birds,” he adds.

Initially, a consortium of respected conservation nonprofits including BirdLife International , The Peregrine Fund , and Nature Kenya agreed with Jenkins. In a March 2017 letter to Kipeto’s shareholders, they termed the wind farm a “direct and devastating threat to Rüppell’s and White-backed vultures – birds that are considered critically endangered on the IUCN Red List of Threatened Species.” They warned that, with Kenyan wind energy in its early stages, “this project will set a significant precedent for future projects” and that “no amount of mitigating or offsetting will compensate” for its biodiversity impacts, which undermined standards set by the International Finance Corporation, an early investor in Kipeto.

Wind turbines at the Lake Turkana Wind Power project in northern Kenya. Some Kenyan wind farms are being located in areas with sizable populations of endangered birds. YASUYOSHI CHIBA/AFP/GETTY IMAGES

In mid-2018, the London-based investment firm, Actis , bought up 88 percent of Kipeto. Multiple sources with first-hand knowledge of the situation say that Actis portrayed Kipeto’s construction as inevitable, and then told members of the bird conservation consortium that about $1 million could be made available per year for mitigation work, including saving vultures from poisoning elsewhere in Kenya to make up for those killed by the turbines.

The leading consortium members have dropped their opposition and are now applying for their share of the mitigation financing. BirdLife International said in an email that it is working with the wind farm owners to “help improve the outcomes for vulture species.” The group declined to provide details of its proposed mitigation work and did not answer questions about whether its decision to drop opposition to the farm was tied to the promise that it would receive annual mitigation money.

The Kenya Wildlife Service has gone along with projects inside parks and protected areas after being assured it would receive compensation funds. Many sources point out that KWS’s government funding has been heavily cut in recent years, and they say that if the agency acquiesces to infrastructure inside parks, it can claim mitigation funds and balance its budget. Wildlife Direct’s Karani contends that it is therefore perversely in KWS’s short-term interests to degrade the parks that it’s mandated to protect.

“I’ve never seen a single government-backed project be denied an environmental impact assessment license by KWS or the National Environmental Management Authority,” Karani says. “They are captured.”

Conservationists describe Chinese-funded projects as more difficult to nudge in an environmentally friendly direction.

According to news reports, KWS has been assigned compensation of about $90 million for the Standard Gauge Railway and highways that have been routed through national parks.

Conservationists complain that infrastructure location details are often kept secret until the very last moment, preventing them from being meaningfully involved in decisions. The Kenyan government says that it has to keep locations under wraps to prevent land speculation and corruption from derailing projects, pointing to situations where this has happened, such as the Kinangop wind power project , which fell apart after violent disputes over landowner compensation.

Lucy Waruingi, executive director of the African Conservation Center , says that infrastructure is often placed in protected or remote areas because these have fewer non-natural barriers like houses and cultivated fields, whose owners must be compensated. “Areas that are considered remote also tend to be the areas that harbor most of our biodiversity,” she says. “In a sense, it’s almost inevitable that infrastructure is going to go through wildlife-rich areas.”

Waruingi adds that “if it’s a protected area, then it’s ‘easier’ [for the developer]. The engineers will tell you that their instructions from head office are to do least-cost designs. If they consider all the costs, especially of compensation, they may decide to route it through an area with one landowner, the government of Kenya, rather than through an area with dozens of private landowners.”

A geothermal well in Hell’s Gate National Park. This well, still in the testing phase, will generate enough electricity to power 50,000 Kenyan homes. Adam Welz

Numerous Kenyan conservationists described Chinese-funded infrastructure projects as more difficult to nudge in an environmentally friendly direction than Western-funded ones. Few would go on the record, given China’s perceived influence over Kenya’s political elite. But they note that many Western financing agencies, such as the World Bank, have some form of environmental standards, even if these are not always fully adhered to. On the other hand, China’s environmental guidelines for its Belt and Road developments are vague, and the planning processes and corporate cultures of Chinese companies are particularly opaque. China prides itself in being a “no strings attached” infrastructure funder , contrasting itself to Western funders with their meddling, “neo-colonialist” terms and conditions.

Despite the difficulties, some conservation organizations are attempting to build relationships with Kenyan government planners and foreign infrastructure companies in northern Kenya, where the LAPSSET development corridor – also part of China’s Belt and Road Initiative – is slated to bring industry and infrastructure to remote regions and link with similar corridors in South Sudan and Ethiopia. LAPSSET is controlled from the Kenyan president’s office, and as currently proposed is a 500-meter-wide infrastructure channel with 50-kilometer-wide strips on either side designated for intensive agriculture and industrial development.

Although its detailed final route is not yet public, it will almost certainly pass through important community conservancies, affect national parks, and sever wildlife migration routes in some of the most biodiverse parts of the country. Some conservationists say they are having some positive influence on the planning process, but the full potential impact of LAPSSET is not yet known.

Wildlife Direct’s Karani says that his advocacy has earned him numerous threats and insults, and he’s often accused of being anti-development and therefore anti-Kenyan; a stooge for foreign white conservationists. “I don’t want to see people continue to live in poverty,” he tells me. “I’ve lived overseas in a rich country [the U.S., where he completed a masters in law]. I want those nice things, too. But do we have to kill the goose that lays the golden eggs — our national parks — just to enjoy a bit of its flesh?”

Adam Welz’s travel to Kenya was funded by the United Nations Environment Programme.

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tourism infrastructure in kenya

Safari Lodges in Kenya's Masai Mara Affected by Floods

M ay is usually a very special month for me. Traditionally, this month marks my annual pilgrimage to Kenya's Masai Mara, where apart from immersing myself in the spectacular landscapes, I get to explore how the region is preparing for the wildebeest migration, which usually takes place toward the end of June to October. As a travel writer based in Kenya, it is my responsibility and privilege to inform the world about this annual phenomenon, one of the world's greatest natural spectacles.

But this May has been quite different from the previous ones, not just for me but also for all of my fellow Kenyan citizens. As I was packing, getting ready to travel from Nairobi to the Mara, areas of the country, including the Mara, were battered by severe rains and flooding. The hardest hit were Nairobi, Kisumu, Narok, Nakuru, Kiambu, Machakos, Kajiado, and Meru. The safari camp Elewana Sand River, where I had a reservation, is situated near the Sand River in the Mara and the roads were flooded, making it too risky to travel-thus, my travel plans were canceled. I've spent most of my days since being inundated by news of people's stories about the losses either of their homes, loved ones, businesses, or something else that they held dear. The precipitation that descended proved to us that the rains can sometimes be a double-edged sword-the blessing of much-needed water and the curse of flooding when there is too much all at once.

The flash floods have displaced nearly 200,000 Kenyans, according to the latest statistics from Kenya's Ministry of Interior and National Administration. So far, 210 people have lost their lives, 90 people are still missing, and even as some schools reopen this week after being closed for a month for regular holidays, other schools will remain closed for at least another two weeks as local authorities assess the damage. It's estimated that more than 15,000 schoolchildren will not be able to return to learning because their classrooms have been submerged in the water and for some, their homes too. Many businesses, both small and large, were also flooded.

Of all the travel destinations in Kenya, the Mara stands out as the most affected with wildlife devastated (there are no precise figures yet, but it is already known that wildlife has been deeply affected), residents impacted by the loss of their homes, and employment in question with a number of camps destroyed by water. More than 20 camps and lodges located along the Mara River, Talek River, and Sand River have been affected to varying degrees, according to the Mara Managers Association. Some of the lodges, like JW Marriott , had to airlift guests to safety. Thanks to the immediate response of the Narok County government, and organizations and companies, including Proflight Helicopters, the Red Cross, Masai Mara game reserve authorities, Mara Elephant Project, the James Savage rescue team, and others, those who had been trapped by the deluge in the Mara and in other regions like Nairobi, including tourists, staff, and locals, were rescued. In total, more than 90 tourists were evacuated in the Mara.

But it's important to mention that there are camps and lodges in the Mara that have not been affected and are open.

While scientists and conservationists noted that the severe flooding has served as yet another example of the catastrophic effects of climate change, others believe that the floods have brought to light the need for better disaster management preparedness, not only in the Mara but throughout Kenya.

"In the wake of this crisis, we have come out in unity as an association and reached out to various stakeholders of the Masai Mara National Reserve to join hands to sustainably protect this fragile ecosystem for posterity. We are all currently speaking as one for the sake of the future of the Mara," said Fairman Muhingi, a patron for the Mara Managers Association, a collective of professional camp managers in the Mara dedicated to enhancing Masai Mara's tourism sector, empowering local communities, and promoting wildlife and conservation.

Others believe that this magnitude of disaster could have been prevented if proper infrastructure had been in place and authorities no longer allowed the overdevelopment of fragile ecosystems .

"The inability of state authorities to monitor development especially along the rivers is what has brought this disaster in the Mara. Most approvals are done without site visits. The carrying capacity of the Mara ecosystem in terms of lodge developments, beds, and bed nights has never been established. The destination must look back and correct wrongs in terms of the location of camps and lodges, define bed density, and carrying capacity," said Judy Kepher-Gona, founder and lead consultant for Sustainable Travel and Tourism Africa, an organization in Kenya that works with companies, governments, and the tourism sector to ensure that they put sustainability into practice.

She also added that the tourism industry needs to reinvest its revenue into proper infrastructure.

"Little has changed in terms of infrastructure over the years except for the Narok Sekanani Road [one of the roads leading to the Masai Mara game reserve], which is already wearing out in some parts. How can the eighth wonder of the world operate on makeshift bridges that are washed away with every rain? Profiting from nature and wildlife without reinvesting in place is equal to abuse of nature," Kepher-Gona stated.

In the midst of the chaos and catastrophe, however, the true spirit of the Kenyan people has emerged-resilient, resourceful, and unwavering in the face of adversity both in the Mara and other regions, such as Nairobi, Nakuru, Kisumum, and Kiambu.

The region's stakeholders, too, have joined forces to get the message out that the entire Masai Mara is not engulfed in floods, and representatives of the travel sector are encouraging visitors to still come and experience the destination. While it is expected that the floods will definitely have a negative effect on this year's high season, which runs from July through October, especially since some camps and lodges were destroyed, most are working day and night to ensure that accommodations and services will be back up and running well before then.

"The whole experience reveals the power of nature, and travelers can still experience this when they tour the destination this year. We are working round the clock to ensure that we have a new camp before the high season," said Valery Joanne Super, cofounder and chief executive officer of Emboo Camps , which is one of the camps hit by the floods .

How to help Kenya right now

There are many organizations, both local and international, that are supporting the flood victims in Kenya. Here are some of them.

The Kenya Red Cross

To donate: Redcross.or.ke

The Kenya Red Cross has launched an emergency appeal for both food and nonfood contributions to families that have been affected by the floods. The Red Cross team is assisting by ensuring prompt emergency responses, conducting search and rescue missions, providing shelter kits, and seeing that essential supplies reach the people affected.

Savage Wilderness

To donate: SavageWilderness.org

Using their swift water rescue skills, James Savage of Savage Wilderness and his team have the experience, qualifications, and equipment to help people who need to be evacuated in floods. Donations will assist greatly in ensuring that the victims are evacuated to a safe place.

Mathare Social Justice Center

To donate: MathareSocialJustice.org

This is a community-based organization in Mathare in Nairobi that fights for social justice and human rights documentation. During this period, it has been supporting flood victims in informal settlements. These people often live in deplorable housing conditions with inadequate access to safe water to drink and poor sanitation.

Rotary Club International

To donate: RotaryNairobi.org

Through their various local branches, the organization is ensuring that the affected are assisted by donating food, clothing, and bedding.

Ethel Foundation for the Aged

To donate: EthelFoundation.or.ke

This foundation was established to ensure that the elderly live a dignified life free from abuse and neglect. Times of crisis such as floods reveal how vulnerable such communities are, and the foundation is ensuring that the elderly are receiving assistance, such as food, clothing, and shelter.

Team Pankaj Foundation

To donate: M-Changa Africa

In conjunction with Masai Mara Association, the Narok County Government and the Kenya Tourism Board, the foundation is distributing relief packs, which include mattresses, blankets, and food hampers to families that have been affected by the floods in the Mara.

Kenya's Masai Mara has been hit hard, but there are safari camps and lodges that remain open in the aftermath of the deluge.

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Uganda and Kenya need each other in business

Uganda and Kenya need each other in business

Uganda and Kenya are neighboring nations that have long shared historical, ethnic, and economic ties. Their close relationship is exemplified by the fact that President Museveni of Uganda received more accolades from the Kenyan public than their own leaders.

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The two countries have a symbiotic relationship that makes them interdependent, particularly in business and trade

Here are some reasons why Uganda and Kenya need each other in business:

Trade and Investment. Uganda and Kenya have a long history of trade and investment, with Kenya being one of Uganda's largest trading partners.

The two countries have a bilateral trade agreement that aims to promote trade and investment between them. Uganda exports goods such as coffee, cotton, and tobacco to Kenya, while Kenya exports goods such as machinery, electronics, and pharmaceuticals to Uganda.

Infrastructure Development. Uganda and Kenya have collaborated on several infrastructure development projects, including the construction of the Busia One Stop Border Post (OSBP) .

The OSBP has improved the efficiency of border crossing, reducing the time taken to clear goods between the two nations and contributing to a reduction in transport costs.

Economic Integration. Uganda and Kenya are both members of the East African Community (EAC), which aims to promote economic integration and cooperation among its member states .

The EAC has implemented several initiatives to promote trade and investment among its member states, including the establishment of a single customs territory and the implementation of a common external tariff.

Security and Stability. Uganda and Kenya have a shared interest in maintaining security and stability in the region. They have collaborated on several security initiatives, including the African Union Mission in Somalia (AMISOM) and the East African Standby Force (EASF).

Uganda and Kenya are both popular tourist destinations, with attractions such as wildlife, national parks, and cultural heritage sites.

The two countries have collaborated on several tourism initiatives, including the development of joint tourism packages and the promotion of cross-border tourism.

In conclusion, Uganda and Kenya need each other in business due to their shared history, economic ties, and geographic proximity.

Their interdependence is evident in their trade and investment, infrastructure development, economic integration, security and stability, and tourism initiatives.

As they continue to work together, they can promote economic growth, development, and prosperity in the region.

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List of Income Tax, VAT and Excise Duty Changes Proposed in Finance Bill 2024

  • The Kenyan government introduced the Finance Bill 2024, proposing extensive tax reforms to boost revenue collection, significantly impacting both individuals and businesses across the country
  • Key amendments include a 2.5% motor vehicle tax, new withholding taxes on goods supplied to public entities, and a digital marketplace tax, among others
  • The reforms will affect various sectors, including the digital economy, financial services, tourism, telecommunication, and estate planning

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Elijah Ntongai, a journalist at TUKO.co.ke, has more than three years of financial, business , and technology research expertise, providing insights into Kenyan and global trends.

The Kenyan government has unveiled an extensive array of tax reforms in the Finance Bill 2024 to enhance revenue collection.

Proposed tax changes in Finance Bill 2024.

Introduced to the National Assembly on May 9, 2024, the bill proposes significant changes across various tax laws, impacting both individuals and businesses.

tourism infrastructure in kenya

List of Online Businesses and Freelancers Targeted for Tax in Finance Bill 2024

Proposed amendments to the Income Tax Act, Value Added Tax Act, and Exercise Duty Act are the key changes affecting Kenyans.

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Key Changes in the Income Tax Act

1. introduction of motor vehicle tax.

A new motor vehicle tax of 2.5% on the vehicle's value has been proposed. Insurance providers shall remit the tax to the government.

2. Withholding Tax Adjustments

The bill introduces withholding tax on goods supplied to public entities, with rates set at 3% for resident suppliers and 5% for non-resident suppliers.

3. Digital Marketplace Tax

A tax on income from digital content monetisation and digital marketplace operations is proposed, set at 20% for non-residents and 5% for residents.

The bill has also proposed amendments to the definition of a digital marketplace and digital monetisation to include more income sources in the digital economy.

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Finance Bill 2024: Kenya Insurers Oppose 2.5% Motor Vehicle Tax Proposal for Car Owners

4. Significant Economic Presence Tax

This new tax, replacing the Digital Service Tax, will levy 30% on deemed taxable profit for non-residents with significant economic activities in Kenya .

The tax aims to capture revenue from global digital businesses operating locally.

5. Minimum Top-Up Tax

Multinational groups with an effective tax rate below 15% will face a minimum top-up tax.

6. Investment Deduction for Spectrum Licenses

Telecommunication operators will benefit from a 10% investment deduction on capital expenditures for spectrum licenses, incentivising further investment in the sector.

Telecommunication operators pay a spectrum licensing fee to secure the exclusive rights to transmit on specific frequencies within designated geographic areas, ensuring their transmissions remain free from interference.

7. Infrastructure Bonds Taxation

Interest income from infrastructure bonds will now be taxable for residents while remaining exempt for non-residents.

8. Taxation of Family Trusts

Income from registered family trusts will be subject to taxation to capture revenues from the growing use of trusts in estate planning.

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Why 16% VAT? William Ruto's Govt Proposes Tax on Bread to Curb Spread of Diabetes

Revisions in the Value Added Tax (VAT) Act

1. financial services vat.

Several previously exempt financial services, including credit and debit card issuance, foreign exchange transactions, and more, will now be subject to VAT at 16%.

2. Removal of Tourism Sector Exemptions

VAT exemptions for various tourism-related services and goods are set to be removed, potentially increasing costs but also boosting tax revenues from the thriving sector.

3. Increased VAT Registration Threshold

The threshold for mandatory VAT registration will be raised from KES 5,000,000 to KES 8,000,000, reducing the compliance burden on small businesses.

Excise Duty Act Updates

1. digital platform services tax.

A new 20% excise duty on non-resident services offered through digital platforms will be introduced, targeting sectors such as digital lending and gaming.

2. Increased Excise Duty on Money Transfers

Excise duty on money transfer services will rise from 15% to 20%, affecting banks, money transfer agencies, and cellular service providers.

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Finance Bill 2024: Foreigners Working Remotely for Kenyan Employers Required to Register for KRA PIN

3. Alcoholic Beverages Compliance Extension

Licensed manufacturers of alcoholic beverages will have an extended timeline of five working days to pay excise duty, easing the compliance burden.

4. Advertisement Fees

A 15% excise duty on internet and social media advertisements for alcoholic beverages, betting, and gaming will be implemented.

List of online businesses targeted in Finance Bill 2024

Earlier, TUKO.co.ke broke down a list of businesses and freelance activities that could be affected by the proposed amendments targeting the digital economy.

The digital economy in Kenya has gained traction in recent years as a major source of income for many Kenyan youths.

As a result, the government previously made attempts to include income made from digital spaces in the tax brackets; however, the legal definitions relating to the digital economy have been vague.

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Source: TUKO.co.ke

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  3. Tourism infrastructure in the Mt Kenya region. (Map by authors

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  4. The best things to do in Nairobi, Kenya

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  5. Nairobi, Kenya Travel Guides for 2024

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  6. 4 Projects to Improve Infrastructure in Kenya

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VIDEO

  1. Inside the NEWLY OPENED MALL ALONG LANG'ATA ROAD ft @THEWAJESUSFAMILY

  2. Leaders from the North Eastern region hold meeting in Nairobi

  3. Kenya and China assess 10 year infrastructure initiative

  4. Kenya Tourism Board CEO 2024-2027

  5. Major road and transport investments are being seen in Thailand, Kenya and India

  6. Floods destroy infrastructure in Kenya. Roads, Bridges and houses brought down

COMMENTS

  1. Tourism in Kenya

    Tourism in Kenya is Kenya's third largest source of foreign exchange revenue, following diaspora remittances and agriculture. ... Infrastructure. The tourist infrastructure in Kenya is highly developed with a network of professionally managed national parks, highways, flight connectivity (international and domestic) and an internationally ...

  2. PDF Ministry of Tourism and Wildlife

    Ministry of Tourism and Wildlife

  3. State initiatives and infrastructure development support Kenyan tourism

    The government's Kenya Tourism Board (KTB) anticipates the 2018 Kenya Open Golf Championship to promote the country as a golf tourism destination. The competition has been held since 1967, but the prize was increased by 127% in 2018 to KSh62.5m ($612,000).

  4. PDF Government of Kenya Ministry of Tourism and Wildlife

    The tourism sector is one of the key economic drivers in Kenya generating 8.8% of the country's GDP, worth USD 7.9 billion in 2018 (Standard Media Group, 2019). This represents a growth of 5.6%, which was greater than the global average of 3.9% and the Sub-Saharan Africa average of 3.3%.

  5. PDF Ministry of Tourism, Wildlife & Heritage

    Kenya's tourism performance continued on a recovery path registering a 70.45% growth in international arrivals year on year. Earnings from international tourism in the year grew by 83% as compared to 2021. We have embraced a paradigm shift in the way we develop and promote tourism in Kenya in line with the Kenya Kwanza

  6. PDF An Assement of Blue Economy Subsectors in Kenya: Coastal and Marine Tourism

    employment opportunities accounting for about 1.1 million people (Ministry of Tourism & Wildlife, 2018). Tourism creates linkages with other sectors of the economy, adding to about 1.6 million jobs, or 8.5% of total employment (WTTC, 2020). According to the Kenya Tourist Board (KTB), of the tourists coming to Kenya, about 65% visit the Kenyan ...

  7. PDF SECTOR PLAN FOR TOURISM SECTOR

    This Tourism Sector Plan (2018-2022), sets out the course of the tourism sector for the next five years. The Plan responds to the changing global trends that are currently shaping the tourism sector. The Sector improved after a long struggle with low performance over the Second Medium Term Plan period 2013-2017.

  8. Tourism in Kenya: An analysis of strategic issues and challenges

    Tourism in Kenya has had difficult times over the years, particularly a prolonged period lackluster performance in the 1990s (see Akama, 1999:1; ... (1946-1955) saw the establishment of many game parks. Also notable was the establishment of facilities and other tourism infrastructure. Two additional developments can be identified with the ...

  9. PDF STATUS OF COMMUNITY BASED TOURISM IN KENYA

    UNWTO places tourism in Kenya at second place after agriculture in their 2010 tourism report. The significance of tourism to Kenya's economy is confirmed in Vision 20130, Kenya's blueprint for economic growth, which aims at increasing annual GDP to an average 10% over the vision period.

  10. Kenya woos EAC peers with infrastructure in tourism growth plan

    Kenya woos EAC peers with infrastructure in tourism growth plan. Uganda and Tanzania are Kenya's second and third top market sources for international visitors. •Last year, visitors from ...

  11. ICT, infrastructure, and tourism development in Africa

    Abstract. This study examines the relationship between information and communication technology (ICT), infrastructure, and tourism development in Africa between 1996 and 2016 using a dynamic panel gravity model. Our findings show that ICT and infrastructure have a positive, statistically significant relationship with tourism development; as ICT ...

  12. PDF SECTOR PLAN FOR TOURISM 2013

    tourism infrastructure and to raise the quality of hospitality services in the country. Specifically, flagship ... The tourism sector in Kenya continues to play an important role in the country's economic development through its contribution to the Gross Domestic Product (GDP), foreign exchange earnings, employment ...

  13. Kenya Embraces Sustainable Tourism As The New Normal

    Ecotourism Kenya (EK) is one initiative leading the way for sustainable tourism governance in Kenya. EK provides relevant and practical guidance for attaining sustainable solutions to challenging issues in tourism development, for both communities and tourism practitioners. In 2015 EK introduced the formal recognition of 'Green Destinations ...

  14. Kenya

    The construction industry in Kenya is driven primarily by two key infrastructure sectors: transportation and building/housing. The Ministry of Transport and Infrastructure is responsible for policy initiatives and actions with respect to roads, aviation, maritime, rail, housing, and urban development. According to the Kenya Economic Survey 2022 ...

  15. Tourism

    Kenya's strategic location in East Africa makes it a gateway to the region, attracting tourists and businesses alike. With well-connected transportation infrastructure, including a modern international airport, investors can leverage Kenya as a hub for regional tourism and MICE activities.

  16. Kenya's tourism sector growth impressive in the first half of 2023

    In the first half of 2023, the US remained the leading source market for Kenya's tourism sector growth, closing at 118,480 North American tourists who visited Kenya. Americans are familiar with Kenya's Mount Kenya region and the Maasai Mara National Reserve, which offers Safari experiences. American visitors during the six months accounted ...

  17. Kenya Overview: Development news, research, data

    The poverty rate ($2.15 international poverty rate) is projected to have declined from 35.8% in 2022 to 35.1% in 2023. Kenya's growth is projected to reach 5.2% on average during 2024-2026, mainly driven by the private sector as business confidence strengthens and the public sector continues to scale back. Kenya's growth is also expected to ...

  18. PDF Enhancing Resilience and Sustainable Tourism in Kenya

    4.2 Infrastructure _____ 21 4.3 Tourism Promotion and Marketing_____ 25 ... 1.1.4 It is important to recognize that Kenya's tourism industry is closely linked to the ecologically sustainable development of the country's natural and heritage resources. Over the years, these valuable resources have suffered erosion and

  19. PDF An Assessment of The Status of Blue Economy Sectors in Kenya

    Kenya's tourism product offers memorable products in its three major product lines of safari, coastal, and business and conference travel. ... Tourism Infrastructure and Enabling services: the Sector will lobby for prioritization of development of key road networks serving key tourism circuits (Malindi - Watamu beach

  20. Infrastructure is key to boosting tourism

    Standard Group Plc HQ Office, The Standard Group Center,Mombasa Road. P.O Box 30080-00100,Nairobi, Kenya. Telephone number: 0203222111, 0719012111

  21. How Kenya's Push for Development Is Threatening Its Famed Wild Lands

    Billions of dollars are pouring in for new infrastructure projects — roads, railways, power plants, and power lines — which are being rapidly built to fulfill the aims of Kenya Vision 2030, the government's plan to transform Kenya into "a newly-industrializing, middle income country." Many projects are being constructed in national ...

  22. Why Is Kenya Embracing Ecotourism?

    Ecotourism in Kenya has emerged as a powerful force for conservation, community empowerment, and sustainable economic growth. Through a combination of innovative practices, collaboration, and a deep commitment to preserving the country's natural beauty, Kenya has become a global leader in responsible tourism. The history of ecotourism in ...

  23. Safari Lodges in Kenya's Masai Mara Affected by Floods

    The flash floods have displaced nearly 200,000 Kenyans, according to the latest statistics from Kenya's Ministry of Interior and National Administration. So far, 210 people have lost their lives ...

  24. Flooding won't keep visitors from viewing Masai Mara's Great Migration

    Heavy rains have swept through Kenya's Masai Mara National Reserve earlier this month, causing flooding in the region. But officials say the popular tourism destination remains open, with minimal ...

  25. Kenyan Banks Oppose State Plan to Hike Tax On Financial Services

    By Bella J. Genga. May 17, 2024 at 7:00 AM PDT. Kenya's plan to charge value added tax on financial transactions will raise total taxation on financial services to 40% from 15% currently ...

  26. PDF COASTAL AND MARINE TOURISM

    Coastal and marine tourism in Kenya is dominated by. mass tourism involving the movement of large numbers of international tourists to often all-inclusive enclave beach resorts. This excludes local entrepreneurs are from the tourism value chain's benefits. 1. Cruising ship tourism: Attracts high net worth tourists--400.

  27. Uganda and Kenya need each other in business

    In conclusion, Uganda and Kenya need each other in business due to their shared history, economic ties, and geographic proximity. Their interdependence is evident in their trade and investment, infrastructure development, economic integration, security and stability, and tourism initiatives. As they continue to work together, they can promote ...

  28. Finance Bill 2024: List of proposed changes on income tax, VAT and

    Finance Bill 2024: Kenya Insurers Oppose 2.5% Motor Vehicle Tax Proposal for Car Owners. 4. Significant Economic Presence Tax. This new tax, replacing the Digital Service Tax, will levy 30% on deemed taxable profit for non-residents with significant economic activities in Kenya. The tax aims to capture revenue from global digital businesses ...

  29. Kenya Construction Market Size, Trend Analysis by Sector, Competitive

    The Kenya construction market size was $15.6 billion in 2023. The market will achieve an AAGR of more than 5% during 2025-2028. Investments in transport infrastructure, as well as improvements in energy, housing, and industrial facilities, will aid the growth of the Kenya construction market. The Kenya construction market research report provides detailed market analysis, information, and ...