Agriculture is the basis of Kenya’s Economy.
Though farming still accounts for the vast part of Kenya’s Economy, Agriculture’s dominance has bee reduced by the development of the tourism and industry sectors in the past decades.

Basics:
The reduction of the public sector through selling off state industries and rationalising public services, the decrease in import barriers and the suppression of control for foreign exchange, are 3 factors which are included in the economic reform plan which has been developed by the Government in addition to a Liberalisation, since 1993.

The growth of Kenya’s economy, which has relieved then negative results partly, in the early 1990’s has been made possible by reforms supported by donors like International Monetary Fund (IMF), World Bank and others.

With a moderate inflation, the Gross Domestic Product (GDP) grew at 5% and 4% in the  years 1995 and 1996 respectively.
As the years go by, the inflation rate fluctuates to a large extent. This is observed in the years 1991, 1992, 199, 1994, 1995, 1996, 1997 and 1998, where GDP was growing respectively at 19.6%, 27.5%, 46%, 28%, 1.6%, 9%, 11.2% and 6.6%.

Because of a crisis in Agriculture and tourism in 1997 to 1998, Kenya’s Economic growth slowed down.
Certain crops were wrecked and as well infrastructures were damaged by the Torrential El Nino rains which affected Agriculture in 1997 to 1998, yet the increase in crime rate, terrorist violence (bombing of the US Embassy in1998) together with Ethnic riots, contributed a lot towards scaring the tourists away.

A lapse in the Enhanced structural Adjustment Program was allowed by the International Monetary Fund because of failure in reform condition implementation and fighting against corruption in the public sector, by government.

Power shortage, endemic corruption, unemployment which affected 50% of the active population in 1998, the prolonged and inefficient control on the key sectors by the government, the High population growth rate which only reduced in 1999 from 4% to 1.59% and the negative commercial balance, whereby $ 6450 million was the eternal debt in 1997, are the factors that constitute the main problems faced by the Economy of Kenya, today.

42% of Kenya’s population was below the poverty line in 1992. In 1995, $ 642.8 million of the external economic aid was gladly received by Kenya.