Last week, we welcomed at IESE a group of top executives from Kenya. They are participants in the Advanced Management Program (AMP) at Strathmore Business School. A one-week module at IESE is part of this program. I had the opportunity to share with them two sessions about alliances and acquisitions as external growth options for a company. I was happy that later in the week the Ambassador of Kenya in Spain highlighted partnerships as one important way to move business forward. So, which are the opportunities for growth in Kenya?
Kenya is one of the countries in sub-Saharan Africa (SSA) that is growing. Before going into the specifics of the country, let’s take a look at the bigger picture of SSA.
The International Monetary Fund (IMF) released recently their latest forecasts of GDP growth. The forecast for the SSA region is 1.4% for 2016 (2 percentage points less than in 2015), and 2.9% for 2017 (still below the 2015 figure). As we all know, averages unmask diverse realities. The average for SSA is driven by the sharp slowdown in the largest SSA economies: Nigeria, South Africa, and Angola. However, other countries – including Kenya – are experiencing healthy growth rates. These are the figures:
Kenya shows good prospects. Private consumption grew at an average rate of 6.3% in the last 5 years, and investment at 14.1%. One of the AMP participants highlighted the growth of the manufacturing sector: it accounts for 10.3% of Kenya’s GDP, and 12.7% of total GDP growth.* But again, we need to take a finer-grained look at the various sub-sectors:
Many opportunities for local and foreign to partner and seek growth for mutual and societal benefit, don’t you think?
* Data source: Kenya National Bureau of Statistics