Kenya Investment Authority has launched handbooks designed to position county governments as investment destinations in the country.
The handbooks, dubbed Kenya Investment Policy (KIP) and the County Investment Handbook give a comprehensive and harmonized policy to guide attraction, facilitation, retention, monitoring and evaluation of private investment both at the national and county levels.
Speaking at the launch, Trade Cabinet Secretary Peter Munya said that Kenya has continued to make impressive progress in strengthening the investment climate, with the objective of making the country a regional industrial and financial hub.
“The country improved significantly in its ranking in the World Bank Doing Business 2020 Indicators moving up 5 places to position 56 from 61 out of 190 countries. This is attributed to, among others, automation of systems that has made starting a business easy,” he said.
According to the 2019 World Investment Report, FDI flows in Kenya increased by 27 per cent to $1.6 billion from $1.27 billion in 2017. This is significant progress considering that in 2012, FDI flows were only $ 259 Million.
KIP handbook is guided by seven core principles, which emphasize the need for openness and transparency, inclusivity, sustainable development, economic diversification, domestic empowerment, global integration, and investor centeredness. It is the first time that Kenya has developed a national investment policy to optimize investment promotion, facilitation and management.
The County Investment Handbook was developed to build capacity of county governments in effective investment promotion and facilitation. It is aimed at helping county structures dealing with investors in establishing priorities and lobbying for proper technical, financial and other forms of support from county and national stakeholders.
Kenya, according to the CS, lacks a well-articulated framework to grant and monitor existing incentives in line with the country’s development goals and desired culture. In addition, there is also the lack of a clear framework under which to evaluate special investor requests for incentives.
“As a result, potential investors with significant investment prospects have opted for other investment destinations due to the lengthy delays involved in seeking the necessary incentives.” Said Mr Munya.
Speaking at the same event, industrialization Principal Secretary Mr Francis Owino said that In the recent past, the Government has also adopted various legislation to make the economy more business friendly. These include the Companies Act, the Insolvency Act and the Special Economic Zones Act, the Business Registration Service, the Companies and Insolvency Legislation (Consequential Amendments) Act 2015 and Finance Act amendments 2015.
“In order to realize the country’s development aspirations in an environment of over 224 national and sub-national investment promotion agencies from 162 countries competing for investments from the same locations, there is need for all stakeholders who interface with investors in their day-to-day operations to restructure their approach to focus on effective facilitation of investments and provide adequate support to investment promotion and aftercare at all the levels of government,” said the PS.
According to Mr Munya, Measuring impact of private investment is important to policy makers.
“The government and indeed KenInvest face challenges regarding the collection and compilation of accurate and comprehensive Domestic Direct Investment (DDI) and Foreign Direct Investment (FDI) statistics, as investors are not required to provide investment data to the authorities (i.e. the Central Bank or the statistical agency through a survey-based approach as is the case in many countries,” he noted.
According to Dr. Moses Ikiara, Managing Director for KenInvest, which is the lead agency in investment promotion and facilitation in the country, KenInvest will continue working with all stakeholders and other agencies to ensure that Kenya is a truly investor-centric destination.
“This policy is an opportunity for the country to reflect on investment issues. Where do we want to go as far as investments are concerned and which institutions should we use to get there.” He said.
‘KenInvest-county collaboration is essential to provide a single entry point/conduct; especially to foreign investors. This avoids duplication of services, conflict of roles, and ensures effective and faster facilitation, under the one stop center,’ added Dr Ikiara.
The KIP seeks to harmonise investment operations and place the strategic perspectives and needs of investors at the centre of attention. This will necessitate review of all legislation pertaining to investment; streamlining the institutional framework, legislation, and procedures to enhance effectiveness and transparency; and improvement of the country’s investment climate.