Kenya


Ethnic divisions account for many of Kenya's problems. During the early
1990s, tribal clashes killed thousands and left tens of thousands homeless.
Ethnically split opposition groups allowed the regime of Daniel arap Moi, in
power from 1978 until 2002, to be reelected for four terms, with the
election in 1997 being marred by violence and fraud.

Kenya is well placed to serve as an engine of growth in East Africa, but its
economy is stagnating because of poor management and uneven commitment to
reform. In 1993, the government of Kenya implemented a program of economic
liberalization and reform that included the removal of import licensing,
price controls, and foreign exchange controls. With the support of the World
Bank, IMF, and other donors, the reforms led to a brief turnaround in
economic performance following a period of negative growth in the early
1990s. Kenya's real GDP grew 5% in 1995 and 4% in 1996, and inflation
remained under control. Growth slowed in 1997-99 however. Political violence
damaged the tourist industry, and Kenya's Enhanced Structural Adjustment
Program lapsed due to the government's failure to maintain reform or address
public sector corruption. A new economic team was put in place in 1999 to
revitalize the reform effort, strengthen the civil service, and curb
corruption, but wary donors continue to question the government's commitment
to sound economic policy. Long-term barriers to development include
electricity shortages, the government's continued and inefficient dominance
of key sectors, endemic corruption, and the country's high population growth rate.