Much of the growth of Kenya’s economy in 2016 will be related to the growth of populations. Worldwide, population is expected to grow at the rate of 4 per cent which will bring in 60 million new citizens to the world. And much of this population growth will be in India and Africa – Kenya included.
This means the demand for certain products and goods will increase. Among these will be food needed to feed the growing population.
1)Agribusiness is therefore a natural growth sector. Kenya is already itself experiencing shortages of essential foods such as maize, the stable food. But the government is making great efforts to produce more food through adoption of innovations and mechanization. Large maize farms have been initiated at the coast, but the supply will be far from sufficient.
Other areas of agribusiness expected to flourish include floriculture, horticulture, bee keeping and animal farming.
2 Food Processing and related products: Slaughter houses and animal skin factories as well as cottage industries will be among the top areas of growth. Demand for processed food will go up as the people move to towns for work..
3. Real Estate will follow the boom in populations. More and more people will move into cities and towns leading to a high demand for houses in these areas. Annually, the demand for housing is estimated at 350,000 units. Indications are that demand will continue to increase for real estate in Nairobi’s suburban areas such as Mlolongo, Kamulu, Kitengela, Kiambu and even in the outer areas such as Kajiado, Thika and Machakos.
This demand will continue to be boosted by foreign investors – especially companies and organizations – that will target these areas for office space, factories and even housing.
Nairobi city will continue to be attractive to foreign investors because office space is still relatively cheap in comparison to equivalent cities such as Lagos and Abuja in Nigeria or cities in South Africa.
This, of course, has raised real estate prices in the city far out of the reach of the ordinary Kenyan, leaving it more to organizations and companies seeking more space.
According to reports, the demand will be fueled by increased purchases from Kenyan diaspora population.
4. Retail property will increase in similar pattern in response to the growing middle class population. Of particular interest will be space for shopping malls and supermarkets which are already spreading all over the country. This demand is forecast however to be more in the areas outside the city as marketers move out of the city and go to other urban areas such Mombasa, Nakuru, Kisumu and Eldoret. In Nairobi, we are seeing an increase in the movement outside the city to its suburban areas in response to movement of the middle class residential areas.
Retail trader will raise the demand for manufactured goods which are easily mass produced This will in again contribute to the increase demand for industrial space. In recent years, there has been a great increase in areas along Mombasa road where significant construction work has transformed the area. Other towns with significant growth of industries include Naivasha, Mombasa and Kisumu.
5. Courier Services The growth of internet will continue to spur significant growth in a variety of areas of the economy Among these are courier services around the country, and especially in urban areas such as Nairobi. By last year, estimates were putting the growth rate as about 30 per cent and industry was expected to continue and improve on this growth rate. New entrants in this will continue to be the transport sectors, especially the matatu business which has in recent years improved its services in this area.
Efficiency, speed and reliably will continue to be major qualities determining growth. While large companies will continue to rely on diversified nationwide delivery, small companies are going to thrive on offering specialized service within specific areas. Almost anything, including food, can be ordered online and delivered direct to the customer.
6 ICT: The growth of the ICT sector will be spurred by the government decision to supply laptops to primary schools. Manufacturing of the laptops will improve manufacturing of other types of communication technology thus lowering prices and increasing demand. Demand will also increase for repair and spare part shops.