Kenya has pursued a mixed economy since 1963. While the respective roles of the public and private sectors have evolved over time, the country has experienced remarkable continuity in its underlying economic development strategy. However, there has been a shift in emphasis from public investment to private sector led growth. Market based reforms have been introduced and more incentives for both local and foreign private investment provided.

From 1993, the Government initiated economic reforms to make it more responsive to the private sector growth. Among the measures instituted were

• abolition of export and import licensing, except for a few items listed in the Imports, Exports and Essential Supplies Act (Cap 502);
• rationalization and reduction of import tariffs;
• deregulation of the exchange rate (thus allowing the shilling's rate to be determined by the market);
• removal of current account restrictions
• authorization of residents and non residents to open foreign currency accounts with domestic banks;
• removal of restrictions on domestic borrowing by foreign owned companies, and on external borrowing by residents;
• revocation of blocked fund provision;
• unconditional liberalization of the capital market – thus enabling foreign companies to buy stocks up to a maximum of 40% of a company's total quoted stocks, and individuals up to 5%;
• removal of price controls, and
• repeal of Exchange Control Act.

The Kenya Government gives investors guarantees on the following

• repatriation of after tax profits, including retained profits which have not been capitalized;
• repatriation of investment proceeds after payment of relevant taxes;
• repatriation of the principal and interest associated with any loan;
• no expropriation of private property as enshrined in the constitution

Kenya is a member of the World Bank affiliated Multilateral Investment Guarantee Agency (MIGA), which issues guarantees against non-commercial risk to enterprises that invest in member countries;

Kenya is also a member of International Centre for Settlement of Investment Disputes (ICSID).

The Government has put in place sound macro-economic policy to improve the business environment.  Measures instituted by the government include:- controlling money supply, curbing public expenditure, improving governance and maintaining law and order.