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Future of the Kenyan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024

Future of the Kenyan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

Kenya spent an average of 5.1% of its allocated defense budget on capital expenditure (CAPEX) during 2015-2019. During the forecast period the country is expected to invest around 8.6% of its defense budget on CAPEX. On a cumulative basis, Kenya’s CAPEX during the historical period amounted to US$283.7 million and the country is forecasted to invest around US$540.4 million over the forecast period.

Kenya has one of the most powerful armed forces in East and Central African region. Kenya’s defense expenditure during the historical period has been mainly driven by the procurement of small arms, aircraft, artillery, and armored vehicles. The country’s defense budget increased at a CAGR of 5.71% from 2015 to 2019. Kenya’s defense expenditure amounted to US$0.9 billion in 2015, which increased to an investment of US$1.1 billion in 2018. Kenya’s defense budget is valued at US$1.2 billion in 2019 and is anticipated to grow at a CAGR of 2.76% during the forecast period to reach US$1.3 billion by 2024.

Kenyan homeland security (HLS) expenditure will grow at a CAGR of 0.64% over the forecast period, increasing from US$1.1 billion in 2020 to US$1.2 billion by 2024. Kenya’s HLS expenditure is primarily driven by its needs of prevention of internal ethnic conflicts, controlling narcotics trade to and from Kenya, eliminating human trafficking, and prevention of terrorist attacks on civilian targets.

Due to its lack of domestic industrial manufacturing capacity, Kenya will largely be dependent on imported military equipment to competently handle the challenges mentioned above. Although Kenya is capable of producing small arms such as pistols, shotguns and rifles, it has been largely dependent on external suppliers for most of its advanced weapon systems. Between 2014 and 2018, Serbia, China, and the US emerged as key suppliers for defense equipment to Kenya with small contribution from countries such as Germany and Jordan.

Corruption is endemic within most of the institutions in Kenyan Government, and the defense sector is also not immune to it. Corruption acts as a hindrance for foreign suppliers interested in entering the Kenyan market as it often leads to operational delays as well as increased cost of doing business. For example, in 2012-2013 serious irregularities were observed in a deal for the procurement of 181 APC vehicles amounting to around KES8 billion.

The report Future of the Kenyan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies and key news.

Companies mentioned: Lockheed Martin, Lockheed Sikorsky, Construcciones Aeronáuticas SA (CASA)/ IPTN, Korean Aerospace Industries, Boeing (McDonnell Douglas) , Samsung Techwin, Hyundai Rotem, Howaldtswerke-Deutsche Werft (HDW)- Thyssenkrupp Marine Systems, BAE, General Atomics Aeronautical Systems, Otokar, Roketsan,Makina ve Kimya Endüstrisi Kurumu (MKEK), Aselsan, Turkish Aerospace Industries (TAI), Havelsan, Tusas Engine Industries (TEI), FNSS Defense Systems Company, Istanbul Shipyard

Scope

The report provides an in-depth analysis of the following -

  • The Kenya defense industry market size and drivers: detailed analysis of the Kenyan defense industry during 2020-2024, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns.
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country.
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years.
  • Market opportunities:list of the top ten defense investment opportunities over the next 5 years.
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Kenyan defense industry.
Reasons to buy
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Kenyan defense industry market trends for the coming five years.
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period.
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector.
  • A deep qualitative analysis of the Kenyan defense industry covering sections including demand drivers, key trends and latest industry contracts.


1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About GlobalData
2. Executive Summary
3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Conditions
3.1.1. Military fleet size
3.1.2. Procurement Programs
3.1.3. Key Drivers and Challenges
3.1.4. Corruption and lack of transparency hinder the growth of Kenyan defense industry
3.1.5. Small defense budget will act as an obstacle to foreign investors
3.2. Defense Market Size Historical and Forecast
3.2.1. Kenyan defense budget to grow at a CAGR of 6.10% during 2020-2024
3.2.2. Border security, threats from terrorist groups, peacekeeping missions, and the need to modernize outdated defense equipment to drive Kenya’s defense expenditure
3.2.3. Defense budget as a percentage of GDP will average 1.3% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Share of capital expenditure is expected to increase during the forecast period
3.3.2. Capital expenditure is expected to record a CAGR of 34.5% over the forecast period
3.3.3. Kenya’s per capita defense expenditure is anticipated to increase marginally over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. The homeland security market in Kenya is anticipated to grow at a CAGR of 0.64% over the forecast period
3.4.2. Human trafficking and illicit drugs trade to drive homeland security expenditure
3.5. Benchmarking with Key Global Markets
3.5.1. Kenyan defense expenditure is forecasted to grow at a steady rate
3.5.2. Kenya will continue to remain a small player in the global arms market
3.5.3. Defense budget as a percentage of GDP is expected to decrease marginally over the forecast period
3.6. Market Opportunities: Key Trends
3.6.1. Top 10 Defense market sectors by value (US$ Million) - Projections over period 2018-2023
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports increased during the period of 2014−2018
4.1.2. Weapons manufactured in Serbia comprised the largest share of imports to Kenya
4.1.3. Aircraft and artillery accounted for a share of 86.5% in Kenyan defense imports
4.2. Export Market Dynamics
4.2.1. Kenya defense exports were negligible during 2013−2017
5. Market Entry Strategy
5.1. Market Regulation
5.1.1. Kenya does not disclose any offset obligations imposed by the country
5.1.2. Foreign direct investment (FDI) is determined on a case by case basis
5.2. Market Entry Route
5.2.1. Budgeting Process
5.2.2. Equipment manufacturers enter the market through government-to-government deals
6. Competitive Landscape and Strategic Insights
6.1. Competitive Landscape Overview
7. Business Environment and Country Risk
7.1. Economic Performance
7.1.1. GDP per capita
7.1.2. GDP, current prices
7.1.3. Export of goods and services (LCU Billion)
7.1.4. Import of goods and services (LCU Billion)
7.1.5. Gross national disposable income (US$ Billion)
7.1.6. Local currency unit per US$
7.1.7. Market capitalization of listed companies
7.1.8. Market capitalization of listed companies as a percentage of GDP
7.1.9. Government cash surplus deficit as a percentage of GDP
7.1.10. Goods exports as a percentage of GDP
7.1.11. Good imports as a percentage of GDP
7.1.12. Service imports as a percentage of GDP
7.1.13. Service exports as a percentage of GDP
7.1.14. Foreign direct investments
7.1.15. Net foreign direct investment as a percentage of GDP
7.1.16. Mining, Manufacturing, Utilities Output (LCU Billion)
8. Appendix
8.1. About GlobalData
8.2. Disclaimer
List of Tables
Table 1: Kenyan Army Strength
Table 2: Kenyan Air Force Strength
Table 3: Kenya Navy Strength
Table 4: Kenya - Ongoing Development and Procurement Programs
Table 5: Kenya - Future Procurement Programs
Table 6: Kenyan Defense Expenditure (KES Billion & US$ Billion), 2015-2024
Table 7: Kenyan GDP Growth and Defense Expenditure as Percentage of GDP Growth, 2015-2024
Table 8: Kenyan Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Table 9: Kenyan Defense Capital Expenditure (KES Billion & US$ Million), 2015-2024
Table 10: Kenyan Per Capita Defense Expenditure (US$), 2015-2024
Table 11: Kenyan Homeland Security Expenditure (KES Billion& US$ Billion), 2015-2024
Table 12:Benchmarking with Key Markets - 2015-2019 vs. 2020-2024
Table 13: Top 10 Kenya Defense Market Sectors by Value (US$ Million) - 2018-2023
Table 14: Kenya Budget Formation Timetable
Table 15: Kenya - Competitive Landscape of Defense Industry, 2018
List of Figures
Figure 1: Kenyan Defense Budget, 2020 and 2024
Figure 2 : Kenya’s Top Prospective Procurements/Developments
Figure 3: Kenyan Defense Expenditure (KES Billion), 2015-2024
Figure 4: Kenyan Defense Expenditure (US$ Billion), 2014-2023
Figure 5: Kenya GDP Growth and Defense Expenditure as Percentage of GDP Growth,2014-2023
Figure 6: Kenyan Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Figure 7: Kenyan Defense Capital Expenditure (KES Billion), 2015-2024
Figure 8: Kenyan Defense Capital Expenditure (US$ Million), 2015-2024
Figure 9: Kenyan Per Capita Defense Expenditure (US$), 2015-2024
Figure 10: Kenyan Homeland Security Expenditure (KES Billion), 2015-2024
Figure 11: Kenyan Homeland Security Expenditure (US$ Million), 2015-2024
Figure 12: Benchmarking with Key Markets, 2015-2019 vs. 2019-2024
Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2019 and 2024
Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
Figure 15: Kenya Defense Import Trend, 2014-2018 (US$ Million)
Figure 16: Kenyan Defense Import by Country, 2014-2018
Figure 17: Kenyan Defense Imports by Category (%), 2014-2018
Figure 18: Kenya - GDP Per Capita (US$), 2015-2025
Figure 19: Kenya - GDP Current Prices (US$ Billion), 2015-2025
Figure 20: Kenya - Export of Goods and Services (LCU Billion), 2005-2014
Figure 21: Kenya - Import of Goods and Services (LCU Billion), 2005-2014
Figure 22: Kenya - Gross National Disposable Income (US$ Billion), 2005-2013
Figure 23: Kenya - LCU per US$, 2015-2024
Figure 24: Kenya - Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 25: Kenya - Market Capitalization of Listed Companies (Percentage of GDP), 2005-2012
Figure 26: Kenya - Cash Surplus Deficit (Percentage of GDP), 2008-2012
Figure 27: Kenya - Good Exports as a Percentage of GDP, 2005-2014
Figure 28: Kenya - Good Imports as a Percentage of GDP, 2005-2014
Figure 29: Kenya - Service Imports as a Percentage of GDP, 2005-2014
Figure 30: Kenya - Service Exports as a Percentage of GDP, 2005-2014
Figure 31: Kenya - Foreign Direct Investments (BoP, Current US$ Billion), 2005-2014
Figure 32: Kenya - Net Foreign Direct Investment as a Percentage of GDP, 2005-2014
Figure 33: Kenya’s Mining, Manufacturing, Utilities Output (LCU Billion) 2005-2014

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