This is a best prospect industry sector for this country. Includes a market overview and trade data.

Unit: US$ billions

 2016 2017
Total Market Size3.
Total Local Production0000
Total Exports0000
Total Imports3.
Imports from the U.S.
Exchange Rate: 1 USD100.0103.0101101.5

All figures in millions of USD with exception of exchange rate in Kenya shillings (Kshs)
Total Market Size = (Total Local Production + Total Imports) – (Total Exports) Data Sources: Global Trade Atlas, Tradestats Express, and BMI

The construction industry in Kenya is driven primarily by two key infrastructure sectors: transportation and building/housing. The Ministry of Transport and Infrastructure is responsible for policy initiatives and actions with respect to roads, aviation, maritime, rail, housing and urban development. Key government agencies within the Ministry include Kenya National Highways Authority, Kenya Roads Board, Kenya Rural Roads Authority, Kenya Urban Roads Authority, Kenya Ports Authority, Kenya Railways Corporation, Kenya Airports Authority, Kenya Civil Aviation Authority, National Transport Safety Agency and the National Construction Authority.

According to Business Monitor International, the Kenyan construction market is to record 8.5% growth in 2017 and remain a growth outperformer in Sub-Saharan Africa (SSA) until 2024. Underpinning this positive outlook is the diversity of opportunities in the market, particularly in transport and power infrastructure and commercial construction.
Substantial spending by the Government of Kenya on infrastructure alongside foreign investment flows are sustaining this high level of growth, though the government's high debt burden could threaten the pace of infrastructure development and dent investor confidence in the market.

Kenya’s growing consumer class and improved domestic economic conditions aimed at bringing inflation down, thanks to tighter monetary policy by the Central Bank of Kenya, continue to provide the impetus for growth in the construction industry. However, the high cost of building materials and bank credit is, to an extent, still constraining demand for new development.
In 2018, the Government of Kenya announced an ambitious development agenda dubbed ‘the Big 4’ that aims to address issues related to affordable housing, universal healthcare, growing manufacturing and food security.  On affordable housing, the GoK’s goal is to build 500,000 homes over the next 5years that will begin to address the 2million housing deficit in the country.  GoK is looking to partner with private sector in realization of this goal.

Transport Infrastructure
Kenya enjoys an extensive, but uneven, infrastructure that is still superior to that of its neighbors. Nairobi is the transportation hub of Eastern and Central Africa and the largest city between Cairo and Johannesburg. The Port of Mombasa is the most important deep-water port in the region, supplying the shipping needs of more than a dozen countries despite persistent deficiencies in equipment, inefficiency and corruption. As a result of these deficiencies, the Port of Mombasa has been undergoing major expansion and re-habilitation.

According to the East African Community's (EAC's) Corridor Diagnostic Study, the Northern Corridor, which is anchored by the Port of Mombasa, is estimated to need $ 2.1billion in investment, while the Central Corridor served through the Port of Dar es Salaam will need $ 2 billion. Overall the region needs $20 billion to bring the region's transport infrastructure up to standard, which includes road and rail upgrades and expansion, airport and ports, as well as an overhaul of the bureaucracy at border posts, which can delay trade.

In 2016, the Government of Kenya continued to invest heavily in transport infrastructure with the sector recording 10% growth. This was heavily driven by ongoing construction of the Mombasa-Nairobi 500km Standard Gauge Railway (SGR) as well as continued expansion in airport, port and road networks coming from the government focus on sectoral improvements to help increase Kenya’s attractiveness as an investment destination, transforming the economy and attaining middle income status as envisioned in its Vision 2030 economic blueprint. However, inadequate funding continues to be an impediment to the speedy implementation of the vision.
According to the World Bank, Kenya requires an annual spend of $4 billion over the next decade to close the existing infrastructure deficit. The sector however requires additional private sector participation through Public Private Partnerships (PPP) to ease the debt burden on the government. To encourage investors, the National Treasury, through the PPP unit, has strengthened the legal framework governing PPPs and has identified 69 infrastructure projects for implementation as PPPs.

Regional integration is a key driving force behind growth in the sector. Various regional initiatives include the $23 billion multi-modal transport corridor dubbed Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor, which aims to better integrate Kenya, Ethiopia and South Sudan, with links to a new port at Lamu in northern Kenya. LAPSSET will include a new standard gauge railway, highways, and an oil pipeline and will provide landlocked South Sudan and Ethiopia with a new export pathway and reduce Kenya's dependence on the heavily congested port of Mombasa. Other regional projects include Kenya, Uganda and Rwanda considering building a six-lane superhighway from Mombasa to Kigali, parallel to a planned railway. Similarly, the ongoing construction of the 158 kilometers Arusha-Voi road is scheduled for completion in 2018 and has been funded by the African Development Bank and the Governments of Kenya and Tanzania for a total of $ 174 million.

Road Infrastructure
Kenya’s existing road network is comprised of 63,575 kilometers of classified roads and 114,225 kilometers of unclassified roads. Out of the total 177,800 kilometers of road networks, both classified and unclassified, only about 16,902 kilometers is paved with the rest unpaved. A total of 5,681 kilometers of this road network has been identified under Vision 2030 for various interventions including rehabilitating, dividing, resealing and tarmacking. Additionally, since 2014 the Ministry of Transport and Infrastructure has been implementing an ambitious road annuity program that will see the construction of 10,000kms roads supporting primary growth sectors through contractor facilitated financing mechanisms.    Initial uptake was slow as banks were charging high finance rates but the program now seems to be picking up after banks and GoK agreed on a way forward.

In October 2015, the Governments of Kenyan and Tanzanian received $232.5m funding from the African Development Bank (AfDB) for the proposed Arusha-Holili-Taveta-Mwatate road construction project. Kenya is contributing $15.6m while Tanzania is contributing $12.3m. The road will link East Africa to the northern corridor and help to reduce the time for goods transported, especially from the Port of Mombasa to Bujumbura in Burundi. It will also make it more cost effective for Tanzania, Burundi, Rwanda and eastern parts of the DRC to import and export goods, which typically use the Dar es Salaam port. Construction is ongoing and the road will be completed by end of 2018. The African Development Bank (AfDB) is also funding the upgrade of the 172 km Ahero-Isebania highway, to facilitate trade flows with Tanzania. The project will be carried out in two lots: one covering the Ahero-Kisii section; and another covering the Kisii-Isebania section. The Government of Kenya received $500 m credit line from the World Bank for the upgrade of Lesseru-Nadapal road.

Construction of the $4m, 176km Mass Rapid Transit System will be funded by Treasury and involve the development of new roads and railway lines linking Nairobi to other towns. It is part of a larger plan launched in 2015, which includes construction of a commuter railway along Outer Ring, Jogoo, Mombasa road, Limuru, Langata, Ngong roads and Waiyaki Way corridors. The aim is to reduce congestion in the city.

Additional opportunities exist under the LAPSSET Highway component where 1730km of inter-regional highways from Lamu to Isiolo, Isiolo to Juba (South Sudan), Isiolo to Addis Ababa (Ethiopia), and Lamu to Garsen (Kenya) are to be constructed at a cost of $1.4bn financed by a combination of both public and private funds. So far, 505km from Isiolo to Moyale is complete and World Bank has approved a $500m loan for the construction of the 298km section between Lokichar and Nakodok.

Kenya will soon re-introduce toll roads with private sector participation. Currently, five major roads have been earmarked for tolling under a PPP plan including the Nairobi-Nakuru-Mau Summit highway, Thika Road, Nairobi's Southern Bypass and a second Nyali bridge in Mombasa city. The move is expected to help raise funds for infrastructural development of roads and help maintain existing roads. Another upcoming PPP toll road is the long-awaited construction of the 77km elevated double decker JKIA to Nairobi-Nakuru highway at a cost of $380m which will include a dedicated lane for large-capacity buses under the bus rapid transit (BRT) plan that is aimed at improving public commuter service and easing congestion. The project is currently undergoing detailed design studies. 

Airport Infrastructure
Kenya has international airports in Nairobi, Mombasa, Eldoret and Kisumu, domestic airports in Nairobi, Malindi, Lamu and Lokichogio(Turkana) in addition to another 463 aerodromes and airstrips. All public airport facilities are managed by the Kenya Airports Authority (KAA), the government agency mandated to administer, control and manage aerodromes in the country. The aviation industry has been on an upward trend and is projected to grow at 4% per annum through 2030 with passenger traffic growing at 5% annually owing to urbanization, a growing middle class as well as an increase in low cost carriers.

A number of Kenya’s airports have been earmarked for expansion following a $285m airport modernization and rehabilitation loan from the World Bank in 2016. A sizeable portion of the funds will be applied to the modernization program at JKIA including construction of modern terminals, a national airport masterplan, installation of integrated security systems at all major airports, installation of communication equipment and institutional capacity building. JKIA is the busiest airport in East and Central Africa and is the 7th busiest on the continent. Originally built to serve 2.5m passengers annually in the 70s, the ongoing modernization and expansion program at the airport has seen capacity increased to 7.5m. There has also been discussion of a second runway at JKIA but final decision is yet to be reached on this. 

Other airport expansion projects include the ongoing expansion or construction of Malindi, Isiolo and Lokichogio airports and the Suneka airstrip and rehabilitation of airstrips in all 47 counties. The Malindi Airport expansion at $54m will enable the facility to handle international flights and includes extension of the existing runway and apron, modern terminal building, control tower, fire & meteorological stations and enhanced security features. Moi International Airport in Mombasa received $66m from the French Development Agency (AFD) for rehabilitation and construction of air side pavements, airfield ground lighting and up-grading of power and water supply.

Improvement works at Lokichogio, Lamu, Manda Island and Isiolo Airports have been ongoing over the recent past with some of these airports already operational with scheduled flights. Provision of airport facilities will strengthen air transport and logistics services along the corridor in readiness for the construction of the three international airports at the three locations in the future.

Maritime Infrastructure
Kenya’s sole seaport in Mombasa is the largest port in East Africa and the second largest in Africa, serving both Kenya and neighboring countries including Uganda, Rwanda South Sudan, Tanzania, Burundi, and the Democratic Republic of Congo. The Kenya Ports Authority (KPA) is the government agency mandated to maintain, operate, improve and regulate scheduled seaports along Kenya’s coastline. The Port of Mombasa recently completed Phase 1 of the Mombasa Port Development Project (MDPD) which included construction of a second container terminal, three additional berths, two ship-to-shore cranes and four rubber-tire gantry cranes. The project was funded by the Japanese to the tune of $217m. Phase 2 and 3 are set for completion in 2017 and 2020 respectively and once complete will make the port the largest in the region with 2.5m TEUs in capacity annually. Japan has allocated an additional $500m for implementation of the two phases.

A large port development project in Kenya is the construction of the Port of Lamu in northern Kenya under the LAPSSET corridor. Upon completion, the $5b Port of Lamu project will consist of 32 berths. The first phase which includes dredging and reclamation, construction of three berths and yards, a causeway and road, buildings and utilities is expected to be operational by 2019 and is financed by China at a cost of $700m.

Rail Infrastructure
Kenya’s total rail network has 2,778 kilometers of narrow (meter) gauge, and is managed by the Kenya Railways Corporation, a state corporation mandated to provide rail and inland waterways transport. Kenya just completed construction of a 500km standard gauge railway line between Mombasa and Nairobi financed by the Government of China at a cost of $3.8bn and a repayment period of 40years. Passenger services began in June 2017 while regular cargo services are began in January 2018.

The second phase of 120km standard-gauge railway line from Nairobi to Naivasha was scheduled to begin construction in late 2017 after the government allocated $500m in the FY2016/2017 budget for commencement of the project. The Government is now seeking additional funding for completion of this phase.  The project has faced numerous challenges by local communities and environmental groups opposed to its construction. 

Nairobi is planning construction of light commuter rail linking Nairobi suburbs with the central business district and will involve construction of nine railway transport corridors with the goal of decongesting the city. The project will be implemented as a PPP and is estimated to cost $300 million and will involve the rehabilitation of 60km of existing rail networks in Nairobi, construction of 5-7km of new tracks to JKIA, new signaling systems and rolling stock. Feasibility studies for the project are already complete.
In May 2017, Kenya Railways Corporation invited bids for consultancy services for feasibility study and design of the Mombasa Metropolitan Commuter Rail. The project involves upgrading 280km of railway and construction of two lines each of 80km long linking Mombasa City with Ramisi and Kilifi. There is also a proposed line linking Mombasa to Moi International Airport. In addition, Kisumu city commuter rail project is also in the offing with four lines totaling 320km linking Kisumu with four neighboring towns. World Bank is providing $300m in financing for the development of the 3 commuter rail projects.
Under the LAPSSET Railway component, a high-speed standard gauge railway to be built on the LAPSSET Corridor will move at an average speed of 150 kilometers/hr. At this speed, it will particularly increase the efficiency of trade in bulky and perishable goods in the region.

Commercial Construction
The Kenyan construction sector will continue to be supported by the growing real estate sector, particularly hotel and retail developments as investors continue to enter the East African region through Nairobi and seek to capitalize on the opportunities offered by the country's growing middle class. Prominent hotel brands operating in the market or planning to enter in the near term include New York-based hotel group Carlson Rezidor, Hilton, Pullman, Best Western, Starwood Hotels and Resorts Worldwide and Swiss-based Movenpick Hotels & Resorts. According to the Kenya National Bureau of Statistics, the number of hotel bed-nights occupancy increased by 11.3% from 6.4 million in 2016 to 7.1 million in 2017.  Developments are focused on increasing bed capacity as well as providing conference facilities in order to adequately cater to business needs. A report by consultancy firm PwC estimates that the number of available rooms will increase from 18,600 in 2016 to 21,000 in 2021, a 2.5pc compound annual increase.  Nairobi currently has the largest mall development hotspot with around 470,000sq m of shopping center space in the pipeline, though smaller cities including Kisumu and Eldoret are also seeing significant development as retail space in the capital city becomes saturated.

However, growth in the broader economy is encouraging the Government to invest in diversifying the country's economic base, thereby opening up the market for investment into industrial and commercial construction. The African Development Bank announced that it is to provide the Government of Kenya with a $100 million loan funding for its $9.53 billion Konza Technology Park. The park, which is located on a 5,000-acre site, is intended to provide 80,000 new jobs in its first four years of operations and is part of the Kenyan government's Vision 2030 development program.

Leading Sub-Sectors

Best prospects for U.S. exporters include the supply of new and used construction equipment (light and heavy earth-moving equipment, loaders, crawlers, tippers, excavators, compactors, graders, and quarry mining equipment), low-cost road maintenance options, and low-cost housing construction technology and know-how. It is important to note that Kenya uses right-hand drive vehicles, so machines with controls in the center are better sellers. Additionally, waste water management treatment units will also be required as more residential units are constructed in areas where sewer and piped water services are not yet provided. Additional opportunities include:
  • A myriad of roads, bridges and dams’ construction and rehabilitation projects
  • Development of the $23 billion Lamu Port-Southern Sudan-Ethiopia Transport (LAPSSET) Corridor Projects including roads, rail, port, airport and pipeline
  • Construction of a $370m second runway at Jomo Kenyatta International Airport and expansion and modernization of several other airports
  • Construction of the $7 billion Konza ICT Park
  • Development of commuter rail services for the cities of Nairobi, Mombasa and Kisumu at a cost of $125 million
  • Development of phase 2 of the 1300km high capacity SGR from Nairobi to Kampala at a cost of $5.8 billion


Kenya’s Vision 2030 identifies the private sector as key towards developing much needed flagship infrastructure projects. However, the Government of Kenya estimates a funding gap of approximately $2 -3 billion per year is required to address Kenya’s infrastructure requirements over the next ten years. To help overcome this financing gap, Kenya is banking on PPPs.

The scope of PPPs will cover economic infrastructure including power generation, ports, airports, railway, roads, water supply, irrigation, among others; as well as social infrastructure which includes housing, medical facilities, prisons, education facilities, solid waste management facilities among others. However, several issues will potentially hinder some of the government's ambitious plans. Despite the push for international companies to utilize local skills, the National Construction Authority confirmed in October 2015 that 83% of construction workers have no formal training. It is working with the National Construction Institute to act as a benchmark for the industry. Although, it will take three to five years before any impact is seen.
Another issue is resettlement, which is a factor in many of the major infrastructure projects, including Lamu Port and the Standard Gauge Railway. The Government of Kenya is working to improve on feasibility studies in order to avoid interruptions to construction caused by land compensation cases. While these interruptions do not usually result in project cancellations, it causes lengthy delays. Moreover, the cost of land compensation is almost equal in expenditure to the amount required to build roads, particularly in Mombasa and Nairobi.

A variety of public and private sector projects are available for private investment. Various types of PPPs are available and include management contracts, leases, concessions, BOT (Build, Operate, and Transfer) or BOOT (Build, Own, Operate, and Transfer), ROT (Rehabilitate-Operate-Transfer) among other arrangements approved by the government.

For the most current list the Kenyan government’s approved National Priority List of PPP projects and their implementation status please visit PPP Downloads.

For more information please contact:
Mary Masyuko
Senior Commercial Specialist
U.S. Commercial Service, U.S. Embassy Nairobi
U.S. Department of Commerce | International Trade Administration
Tel: +254 (20) 363-6063;;

Isaac Kaaria
Commercial Assistant
U.S. Commercial Service, U.S. Embassy Nairobi
U.S. Department of Commerce | International Trade Administration
Tel: +254-20-363-6400;

Web Resources

Business Monitor international
Ministry of Transport & Infrastructure
Ministry of Lands, Housing and Urban Development
Kenya National Highways Authority
Kenya Roads Board
Kenya Rural Roads Authority
Kenya Urban Roads Authority
Kenya Airports Authority
Kenya Ports Authority
Kenya Railways Corporation
National Housing Corporation
Vision 2030
Public Private Partnership Unit
Konza City
Kenya Institute of Public Policy and Research Analysis
Bloomberg Business
The Nation Business Review
Foam Facts
Afri Biz
Habitat for Humanity


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