The Government of Kenya has put in place robust measures to attract both foreign investors and local entrepreneurs. The Kenyan government pledged to support and work with investors towards creating a favorable investment climate in the country.
An array of legislations and policies have been implemented to help entrepreneurs thrive, among them the new Insolvency Act, the Special Economic Zones Act, the Companies Act, the Companies and Insolvency (Consequential Amendments) Act 2015 and others that include the Business Registration Service Bill, and Finance Act amendments 2015.
Thanks to these legislations and solid investments in infrastructure, Kenya was ranked third globally among the most improved countries on ease of doing business according to the World Bank’s Doing Business Report, 2016. The new laws have eliminated restrictive ones that have been impediments to the investor. It is now easier to register businesses in the country and invest in Kenya because the legal framework is investor-friendly.
Kenya has jumped 28 places to 108 from 136 it attained last year, making it the ultimate investment destination in East Africa.
According to a report by the Kenya National Bureau of Statistics, the Kenyan economy advanced 5.5 percent in the second quarter of 2015, up from a 4.4 percent rise in the first three months of the year, as good weather conditions boosted agricultural output and abundant rainfall increased production of hydroelectricity. Kenya rebased its GDP resulting in the country’s moving to lower middle income status.
The rebasing raised Kenya’s nominal GDP for 2013 from USD 44.1billion to USD 55.2 billion per capita. The country leaped from the 12th to the 9th largest economy in Africa. This is following an annual growth rate in the country that averaged 5.4 percent from 2004 until 2015. The growth was mainly driven by finance and insurance activities, wholesale and retail trade, and agriculture.
For these reasons Kenya’s Deputy President, William Ruto appealed to foreign investors to take advantage of investment opportunities available in Kenya. “I urge you to take up these opportunities to enable you to expand your businesses as we generate employment and income for Kenyans”, said Mr. Ruto. The Deputy President said the country’s business environment has been made investor friendly. “We have given attention to infrastructural development with big investments in energy, roads and the Standard Gauge Railway (SGR), to attract investors”, he said.
The ongoing construction of SGR is 55% complete and will reduce transport costs by 70%. Kenya has also made significant achievements in the energy sector, a key driver in the manufacturing industry, injecting into the grid an extra 600 megawatts to the national grid that will reduce the cost of power by 40%.
Mr. Ruto made the remarks at the second Kenya International Investment Conference (KIIC) held at the Kenyatta International Convention Centre (KICC). The conference brought together stakeholders from different parts of the globe, government officials and investors. He assured the investors that the government is carrying out reforms to ensure quality and timely services.
“Kenya continues to deepen reforms aimed at improving business environment and ensuring global competitiveness,” said the Deputy President adding, “We have taken the necessary steps to mitigate the adverse effects of the strengthening US dollar to ensure our economy is stable.”
Mr. Ruto pointed out that Kenya’s economy is one of the fastest growing globally. Small and medium enterprises (SMEs) form a core pillar of economic activity in Kenya and contribute close to 25% of the GDP. SMEs are the fastest growing business sector of the economy and can employ more than 50% of the employable population. This is according to the Industrial Transformation Programme Report 2015.
Mr. Ruto told the investors and stakeholders who attended the conference that Kenya has the best telecommunications and transport infrastructure in the region and a talent pool that will address their needs. He assured investors that the government is carrying out reforms to ensure quality and timeliness of services. He said Kenya has been ranked among the most improved countries to invest in because of measures taken by the government to improve the investment climate of the country. The government, he added, is working with the private sector to make the country’s investment climate favorable. He pointed out investment opportunities in the agricultural industry saying the government is working towards modernizing the sector. He added that the government is also increasing the base for value addition and agro-processing to create more jobs for young people.
The Deputy President observed that the government had invested heavily in security to ensure safety of Kenyans, investors and their property. Mr. Ruto urged business persons to shun corruption and instead report public officials seeking to be bribed. “Business corporates and investors must equally make their contribution by not corruptly influencing or inducing public officers; instead they should report any public officers trying to seek favors to perform their duties,” he said.
Kenya is a strong team player in the East Africa regional markets. There is a rising trend towards urbanization, which contributes towards an increase in consumer demand for high value goods. The country, already at a turning point into becoming an industrial hub in manufacturing and industrialization markets, is further set to develop as a regional hub for investments within the East African regional markets context, and is fast developing as the favored business hub, not only for oil and gas exploration in the sub-region but for industrial production and transportation. Kenya has had the foresight to liberalize its economy and has removed all obstacles that hamper the free flow of trade and private investment.
Moreover, Nairobi was recently ranked as the most attractive African city for foreign direct investment; the size of Kenya ‘s middle class is growing as evidenced by the growth in its national income per capita and as a further feather in its cap – Kenya was the top destination for international investors in the East Africa region after attracting 12 private equity deals valued at over USD 110.5 million.
By Aziza Said
Photo Credit: Xinhua_ Simbi Kusimba