GDP Growth Rate
GDP Growth per Capita
Investing in Kenya
The Kenyan economy has seen a steady rise in the economic
growth rate all through 2017. A similar growth pattern has been experienced in
the 2015 through 2016. In the first quarter of 2016, Kenya had a 5.9% growth
rate which is a rise compared to 2015, 5.0%. The World Bank estimated that the
rate would remain at 5.9% compared to 2015’s 5.6%. This steady growth rate
could be attributed to the expansions in the main economic sectors of the
country specifically, the Agriculture sector, Construction, finance, insurance
and real estate.
One key element you need to be focused on is the explosion
in the real estate sector of the country. Construction and real estate are some
of the key sectors that have contributed to the key rise of the GDP in 2016. In
the first quarter of the 2016 however, the construction industry experienced a
slight reduction of 9.9% compared to what would be later experienced in the
second quarter, 1.6%.
Why invest in Kenya?
central Africa’s largest economy
You may not be aware of this but Kenya is the largest and
one of the most diversified and advanced economy in the East and Central
Africa. The country has a strong growth prospect which is largely supported by
the rise of the urban middle class community and the evergreen appetite for
growing consumer market
If you look at the Kenya’s’ positioning in the EAC market,
you will realize that it is the 2nd largest with a population
reaching up to 43 million people. The population is growing at a steady rate of
2.7% P.A. The trend towards urbanization is rising steadily which is a
contributory factor towards the increase in the consumer demand for the high valued
goods. If the trend continues, we are looking at a situation where by 2050, 50%
of the population will be living in the urban areas.
that supports low risk investment
In the EAC community, Kenya has the strongest climate with
the FDI flowing in from big and developed markets and more to that, the country
harbors the head-quarters to multi-national companies, meaning that investment
in the country is quite favorable.
The geographical location of the country makes it a good
option and ideal for strategic partnership which is geared towards improving
the regional and the global market share.
The regional connectivity is quite stable due to the
infrastructural development including the port of Mombasa and the KE-UG which
serves as a gateway to the vibrant East and Central Africa Region.
The JKIA functions as an effective connection between Kenya
and the rest of the world.
stability and favorable investment policies
Being backed by the new constitution, the country
experiences a stable political balance. The national and the county governments
are approaching the private sectors as a key player in the development and
growth of the economy.
The real estate industry in Kenya
Over the past few years, the real estate market has
experienced a boom. What hasn’t become clear to most people is the sustainability
of this economic condition.
Like any other real estate market in the world, the Kenyan
real estate market operates in cycles. The cycles in the Kenyan market tends to
start after the general elections and before the next general elections, the cycles
come to a speeding end.
The real estate sector contributes 9% of the total Kenya’s
GDP meaning that it has risen steadily to outperform other sectors that had
dominated the economy. The industry seems to be doing well with a return of
between 25% and 30% with zero loses making it one of the most lucrative
businesses to venture in.
Looking at the main categories of the real estate market, it
is interesting to know that the residential units in Kenya generate an average
rental yield of 5%. On the other hand, the commercial leases generate an
average of 9%.
Property ownership in Kenya
Kenya is a prime location where foreigners can find a safe
haven to invest. The key investments for the foreigners are usually the Hotels,
Farms, Ranches Offices and Office parks, not to forget the holiday homes. It is
the dream of every foreigner working in Kenya to own an office and perhaps even
a home. However, engaging in matters to do with the property ownership in Kenya
requires one to be familiar with the legal provision in property ownership
rights provided for by the constitution of Kenya.
Foreigners can own property
Foreigners can own property in Kenya in their name subject
to certain limitations, grant the rights to any person either as an individual
or as an association to acquire and own property in Kenya.
Before the purchase of the property
It is important that before the purchasing the property, one
should do proper research undertaken by professionals. Otherwise, there have
been reported cases where the partnerships between the locals and the
foreigners turn sour and the investor ends up losing and if not all, a
significant portion of their investment.
Limitation to property ownership
According to the constitution of Kenya, the Land Control Act
(CAP 302), As Per Article 65 (1), “a person who is not a citizen may hold land
on basis of leasehold tenure only, and in such lease, however granted, shall
not exceed ninety nine years.” You may seek to renew the lease hold after the
The transactions costs in property ownership in Kenya