Future of the Kenyan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

  • ID: 4531963
  • Report
  • Region: Kenya
  • 70 Pages
  • Strategic Defence Intelligence
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FEATURED COMPANIES

  • Aselsan
  • Boeing
  • Havelsan
  • Hyundai Rotem
  • Istanbul Shipyard
  • Lockheed Martin
  • MORE

With an armed force that is considered to be one of the most powerful in East Africa, Kenya has consistently procured a large amount of military hardware, including small arms, aircraft, artilleries and armored vehicles, which drove defense expenditure during the historic period. The country’s defense budget increased at a CAGR of about 8.3%, with an investment of around US$1 billion in 2014 to around US$1.3 billion in 2018. The government’s well-defined military modernization plans and efforts to counter domestic and foreign terrorist attacks, along with the country’s active and consistent participation in various peacekeeping missions, will stimulate expenditure over the forecast period. The country’s defense budget is expected to increase at a CAGR of 4.09%, from US$1.4 billion in 2018 to US$1.6 billion in 2023.

The capital expenditure (CAPEX) allocation of the Kenyan defense budget represented an average of around 34% of the total budget during 2014-2018 and is anticipated to increase to an average of around 35% over 2019-2023. On a cumulative basis, CAPEX was US$2.0 billion during the historic period and is anticipated to reach to US$2.7 billion over the forecast period; as a result of the country’s plans to procure defense equipment such as land-based C4ISR, physical security infrastructure and IT-networking are expected to be in demand over the forecast period.

Kenyan homeland security (HLS) expenditure will grow at a CAGR of around 2.2% over the forecast period, increasing from over US$947 million in 2019 to about US$1 billion by 2023. Preventive measures for internal conflicts, drug trafficking, human trafficking, piracy, and threats from terrorist groups drive HLS expenditure. Kenya procured armored personnel carrier vehicles and small arms for its national police forces as its current equipment and vehicles are aging; this will help to improve safety and security and counter any possible attacks. Kenya is also keen on procuring surveillance, unmanned aerial vehicles (UAV), intelligence systems such as automated border crossing systems, and CCTV (closed circuit television) and has invested in acquiring military hardware for its police forces.

The Kenyan defense market, valued at around US$1.3 billion in 2018, is expected to see sustained growth over the forecast period to reach about US$1.6 billion by 2023. Growing threats from terrorism, border conflicts with Somalia, human trafficking, arms smuggling and contributions to peacekeeping operations are expected to drive the country’s military expenditure, registering a growth rate of just over 4% over the forecast period. Kenya’s capital defense expenditure will increase from over US$450 million in 2018 to around US$575 million by 2023. Over the forecast period, the average share of total CAPEX is expected to cross 35% from its historic-period average of about 34%. Defense equipment such as land-based C4ISR, physical security infrastructure, and IT-networking are expected to be in demand over the forecast period.

The report "Future of the Kenyan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023" offers detailed analysis of the Kenyan defense industry with market size forecasts covering the next five years.

In particular, it provides an in-depth analysis of the following -

  • Market opportunity and attractiveness: detailed analysis of the current industry size and growth expectations during 2019-2023, including highlights of the key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
  • Procurement dynamics: trend analysis of imports and exports, together with their implications and impact on the Kenya defense industry.
  • Industry structure: five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
  • Market entry strategy: analysis of possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the defense industry in Kenya, providing an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
  • Business environment and country risk: a range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.

Companies mentioned in this report: 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

  • With an armed force that is considered to be one of the most powerful in East Africa, Kenya has consistently procured a large amount of military hardware, including small arms, aircraft, artilleries and armored vehicles, which drove defense expenditure during the historic period.
  • The country’s defense budget increased at a CAGR of 8.33%, with an investment of US$1.0 billion in 2014 to US$1.3 billion in 2018. The government’s well-defined military modernization plans and efforts to counter domestic and foreign terrorist attacks, along with the country’s active and consistent participation in various peacekeeping missions, will stimulate expenditure over the forecast period.
  • The country’s defense budget is expected to increase at a CAGR of 4.09%, from US$1.4 billion in 2018 to US$1.6 billion in 2023.

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
  • Profiles of the top domestic and foreign defense manufacturers . 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
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FEATURED COMPANIES

  • Aselsan
  • Boeing
  • Havelsan
  • Hyundai Rotem
  • Istanbul Shipyard
  • Lockheed Martin
  • MORE

1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About the Publisher

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
3.2. Defense Market Size Historical and Forecast
3.2.1. Kenyan defense budget to grow at a CAGR of 4.09% during 2019-2023
3.2.2. Border security, threats from terrorist group, 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 be at an average of 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 anticipated to record a CAGR of 4.15% over the forecast period
3.3.3. Kenya’s per capita defense expenditure is expected to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. The homeland security market in Kenya is expected to grow at a CAGR of 2.25% over the forecast period
3.4.2. Human trafficking and illicit drugs trade to drive homeland security expenditure
3.4.3. Kenya faces a high level of threat from terrorist organizations
3.4.4. Kenya faces a high level of threat from terrorist organizations
3.4.5. Kenya has a Terrorism Index score of 6.2
3.5. Benchmarking with Key Global Markets
3.5.1. Kenyan defense expenditure is expected to remain low compared to leading spenders
3.5.2. Kenya will continue to remain a small contributor in the global arms market
3.5.3. Defense budget as a percentage of GDP is expected to increase 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 2013-2017
4.1.2. Weapons manufactured in Serbia comprised the largest share of imports to Kenya
4.1.3. Aircraft and artillery accounted for a total share 86.5% in Kenyan defense imports
4.2. Export Market Dynamics
4.2.1. Kenya defense exports were negligible during 2013-2017

5. Industry Dynamics
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 to case basis
5.3. Market Entry Route
5.3.1. Budgeting Process
5.3.2. Equipment manufacturers enter the market through government-to-government deals
5.4. Key Challenges
5.4.1. Corruption and lack of transparency hinder the growth of Kenyan defense industry
5.4.2. Low defense budget to act as obstacle for foreign investors

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

List of Tables:
Table 1: Kenya Army Strength
Table 2: Kenya 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), 2014-2023
Table 7: Kenyan GDP Growth and Defense Expenditure as Percentage of GDP Growth, 2014-2023
Table 8: Kenyan Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Table 9: Kenyan Defense Capital Expenditure (KES Billion & US$ Million), 2014-2023
Table 10: Kenyan Per Capita Defense Expenditure (US$), 2014-2023
Table 11: Kenyan Homeland Security Expenditure (KES Billion& US$ Billion), 2014-2023
Table 12: Terrorism Index, 2018
Table 13:Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Table 14: Top 10 Kenya Defense Market Sectors by Value (US$ Million) - 2018-2023
Table 15: Kenya Budget Formation Timetable
Table 16: Kenya - Competitive Landscape of Defense Industry, 2018

List of Figures:
Figure 1: Kenyan Defense Expenditure (KES Billion), 2014-2023
Figure 2: Kenyan Defense Expenditure (US$ Billion), 2014-2023
Figure 3: Kenya GDP Growth and Defense Expenditure as Percentage of GDP Growth,2014-2023
Figure 4: Kenyan Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Figure 5: Kenyan Defense Capital Expenditure (KES Billion), 2014-2023
Figure 6: Kenyan Defense Capital Expenditure (US$ Million), 2014-2023
Figure 7: Kenyan Per Capita Defense Expenditure (US$), 2014-2023
Figure 8: Kenyan Homeland Security Expenditure (KES Billion), 2014-2023
Figure 9: Kenyan Homeland Security Expenditure (US$ Billion), 2014-2023
Figure 10: Terrorism Heat Map, 2018
Figure 11: Terrorism Index, 2018
Figure 12: Benchmarking with Key Markets, 2014-2018 vs. 2019-2023
Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023
Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018
Figure 15: Kenya Defense Import Trend, 2013-2017 (US$ Million)
Figure 16: Kenyan Defense Import by Country, 2013-2017
Figure 17: Kenyan Defense Imports by Category (%), 2013-2017
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 as (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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  • Lockheed Martin
  • Lockheed Sikorsky
  • Construcciones Aeronáuticas SA
  • Korean Aerospace Industries
  • Boeing
  • Samsung Techwin
  • Hyundai Rotem
  • Howaldtswerke-Deutsche Werft
  • Thyssenkrupp Marine Systems, BAE
  • General Atomics Aeronautical Systems
  • Otokar
  • Roketsan
  • Makina ve Kimya Endüstrisi Kurumu
  • Aselsan
  • Turkish Aerospace Industries
  • Havelsan
  • Tusas Engine Industries
  • FNSS Defense Systems Company
  • Istanbul Shipyard
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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