PEST ANALYSIS OF KENYA

POLITICAL 1. form and type of government Unitary Multiparty Republic 2. ministerial hierarchy (separate ministers under each section) chief of state: President Mwai KIBAKI (since 30 December 2002); Vice President Stephene Kalonzo MUSYOKA (since 10 January 2008); head of government: President Mwai KIBAKI (since 30 December 2002); Vice President Stephene Kalonzo MUSYOKA (since 10 January 2008); note the roles of the president and prime minister are not well defined at this juncture; constitutionally, the president remains chief of state and head of government, but the prime minister is charged with coordinating government business cabinet: Cabinet appointed by the president and headed by the prime minister, who is the leader of the largest party in parliament elections: president elected by popular vote for a five-year term (eligible for a second term); in addition to receiving the largest number of votes in absolute terms, the presidential candidate must also win 25% or more of the vote in at least five of Kenya's seven provinces. https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html 3. Exim policy FOREIGN POLICY Kenya is a member of the Common Market for Eastern and Southern Africa (COMESA), the East African Co-operation (EAC), the Organization of African Unity (OAU), and the Inter Governmental Authority on Development (IGAD). TRADE POLICY Trade policy formulation is the responsibility of several Ministries, which constitute the Cabinet's Economic Sub-committee, and the Central Bank. Its the founding member of WTO. 4. FDI /FII STRUCTURE Investment Promotion Centre is a public funded institution, which was established in 1992 as a one-stop shop geared to promote investment in the country. IPC processes all applications for new investments and forwards recommendations to the Ministry of Finance and Planning for approval by the Minister. A General Authority license is issued within one month with prior approval from the relevant authority in charge of issuing \the license.

The Foreign Investments Protection Act (FIPA) (Cap518) guarantees repatriation of capital, after tax profits and remittance of dividends and

interests accruing from investing in the country. The constitution also provides guarantee against expropriationof private property unless for security or public interest and when this happens fair and prompt compensation is paid.

investment allowance - is provided as an incentive for investment in the manufacturing and hotel sectors the rate of 60% countrywide; depreciation - liberal rates are allowed for depreciation of assets based on value as follows: buildings and hotels machinery e.g. tractors and aircrafts;

loss carried forward - business enterprises that suffer losses can carry forward such losses to be offset against future taxable profits; Duty remission facility - material imported for use in manufacture for export or for the production of raw materials for use in export oriented manufacture or for the production of duty free items for sale domestically are eligible for duty remissions. Applications for this facility may be made to the Export Promotion Programme Office in the Ministry of Finance and Planning.

Manufacturing Under Bond (MUB) To encourage manufacturing in Kenya for world markets, the Government has established an in-bond programme open to both local and foreign investors. IPC and Ministry of Finance and Planning (Department of Customs and Excise) administer the program. Enterprises operating under the programme are offered the following incentives: exemption from duty and VAT on imported plant, machinery and equipment, raw material and other imported inputs; and 100% investment allowance on plant machinery equipment and buildings. Export Processing Zones Authority (EPZA) 25. Export Processing Zones are coordinated by the Export Processing Zones Authority (EPZA). A number of EPZs have already been established. Enterprises operating in export processing zones in Kenya enjoy the following benefits: 10 years tax holiday and a float 25% tax for the next 10 years;

exemption from all withholding taxes on dividends and other payments to non-residents during the first 10 years; exemption from import duties on machinery raw materials and intermediate inputs; no restriction on management or technical arrangement; exemption from stamp duty; and Exemption from VAT and operate on one license only.

5. treaties / economic integration WTO and stated above ECONOMIC 1. economic policy

fiscal policy - Expansionary fiscal policy, contractionary fiscal policy and neutral fiscal policy monetary policy trade policy

Banking structure (national and private) both private and govt controlled banks , Nairobi stock exchange one of the largest boards in Kenya. 2. income patterns (GDP) - $1,600 (2008 est.) 3. disposable income patterns 4. investment (domestic, national, individual) SOCIAL 1. psychographics and sociographics

Age structure: 0-14 years: 42.3% (male 8,300,393/female 8,181,898) 15-64 years: 55.1% (male 10,784,119/female 10,702,999) 65 years and over: 2.6% (male 470,218/female 563,145) (2009 est.) Population growth rate: 2.691% (2009 est.) country comparison to the world:25 Birth rate: 36.64 births/1,000 population (2009 est.) country comparison to the world: 31 Death rate: 9.72 deaths/1,000 population (July 2009 est.) country comparison to the world: 69 Net migration rate: 0 migrant(s)/1,000 population (2009 est.) country comparison to the world: 78 Urbanization: est.)

urban population: 22% of total population (2008) rate of urbanization: 4% annual rate of change (2005-10 Sex ratio: Land1.02 Mass Total- 224,962 sq mi (582,650 sq km) at birth: male(s)/female

Land219,788 sqmale(s)/female mi (569,250 sq km) under 15 years: 1.01 15-64 years: 1.01sq male(s)/female Water5,173 mi (13,400 sq km) 65 years and over: 0.84 male(s)/female total population: 1 male(s)/female (2009 est.) Infant mortality rate: http://www.tradeport.org/countries/kenya/01grw.html

total: 54.7 deaths/1,000 live births country comparison to the world: 44 male: 57.56 deaths/1,000 live births female: 51.78 deaths/1,000 live births (2009 est.) Life expectancy at birth: total population: 57.86 years country comparison to the world: 188 male: 57.49 years female: 58.24 years (2009 est.)

2. Culture & religious- Mostly Christians with 27% of the population Protestant while 26% are Roman Catholic. Around 19% of the population follow local native tribal beliefs and 6% are Muslims country of diverse and rich cultural traditions, seeks to cultivate and develop those traditions to ensure that its valuable cultural assets are not irretrievably lost and that social cohesion is not undermined in the process of change to newer ways 3. mindset and lifestyle of people Kenyans love their beer almost as much as their dancing and there's a thriving local brewing industry Kenyans love music and the style known as benga is the contemporary dance music that rules http://au.encarta.msn.com/sidebar_1461501337/Kenya_Customs_and_Lif estyle.html 4. urban and subunban population Rural and urbanization is on the rise since the past two years. TECHNOLOGICAL 1. R & D R&D organization that constituted one of our case studies is the Kenya Industrial R&D Institute (abbreviated KIRDI). Like the Coffee Research Foundation, KIRDI's origin lies in the colonial period, when in 1942, the East African Industrial Research Organization was established to develop local industries, with the objective of relieving shortages brought about by World War II. After the collapse of the East African Community in 1977, the Kenyan government first transferred the Organization to the Ministry of Commerce and Industry, and then, two years later, gave it autonomy.