Kenya has been hampered by corruption and by reliance upon several primary goods whose prices have remained low.
Low infrastructure investment threatens Kenya's long-term position as the largest East African economy.
In the key December 2002 elections, Daniel MOI's 24-year-old reign ended, and a new opposition government took on the formidable economic problems facing the nation.
After some early progress in rooting out corruption and encouraging donor support, the KIBAKI government was rocked by high-level graft scandals in 2005 and 2006.
In 2006, the World Bank and IMF delayed loans pending action by the government on corruption. The international financial institutions and donors have since resumed lending, despite little action on the government's part to deal with corruption. Unemployment is very high.
The country has experienced chronic budget deficits, inflationary pressures, and sharp currency depreciation — as a result of high food and fuel import prices.
The discovery of oil in March 2012 provides an opportunity for Kenya to balance its growing trade deficit if the deposits are found to be commercially viable and Kenya is able to develop a port and pipeline to export its oil.