The area that now includes Kenya came under British rule in the 1890 s, though it wasn’t declared an official Crown colony until 1920. Under British hegemony, a racially stratified economics was created, with European settlers controlling a large segment of the fertile land and controlling your stresses nascent industries, whilst the African indigenous population worked as workers on cash crop plantations and in factories. By and large, the colonial economics was characterized by settler control of farming lands, with coffee and tea that represent the major export crops designated for sale in European markets abroad. After the emergence of various nationalist movements through the 50s, in addition to a series of rebellions against British rule, Kenya was granted independence in December 1963.
Under the subsequent rule of the Kenya African National Union, headed by President Jomo Kenyatta, Kenya experienced significant financial growth through the 1960 s. Even though KANU, a self proclaimed African socialist party, pursued various socialistic policies including government control of agriculture marketing boards, state ownership of certain industries, and import substitution the economics under Kenyatta was give or take mixed. In the year 1980, a growing balance of payments deficit caused by declining terms of trade and high international oil prices, compelled Kenya to borrow heavily from the World Bank. The latter issued a second large scale loan to Kenya in 1982, with both the second and first loans being subjected to numerous conditionalities.
Such conditionalities centered on increasing the role of the private sector in the economics while simultaneously reducing the role of the government. Economic performance in the 1990 declined severely, and the average annual Gross domestic product growth rate, which stood at 6.5 percent between 1960 to 1980, fell to 2 percent between 1990 to 1999. Five years later, in 1998, the unemployment rate rose to 50 percent. The IMF and the World Bank suspended structural adjustment programs in 1997, as a consequence of KANU’s failure to implement the conditionalities designed mainly to curb corruption and promote sound economic policy. The PRGF, a direct relative of the SAPs, sets out a few of the most detailed conditions ever agreed to by a national government.
The Kenyan economics carries on to be dominated by agriculture, with tea, coffee, horticultural products, and petroleum products acting as the country’s major exports. Export partners, in turn, include Uganda, Tanzania, the United Kingdom, Egypt, and Germany. Tourism is the second largest contributor to foreign exchange, while agriculture is the first. Kenya’s major imports include machinery and transportation equipment, petroleum products, and steel and iron, most of that are imported from the United Kingdom, the United Arab Emirates, the US, Japan, Germany, and India. Due, in large part, to the uneven terms of trade between Kenya’s agricultural exports and higher value added imports, the country runs a significant balance of trade deficit.