Tomorrow, the Government will host its first ever international investment conference, and its selling point will be the reforms it has undertaken to lower the cost of doing business in Kenya.
The country, through the implementation of these reforms that cut across various economic sectors, plans to be ranked among the top 20 countries on the World Bank’s Ease of Doing Business Index by 2020. In the latest survey, which was released last month, Kenya was ranked 136th.
However, the Government is confident its reforms plan over the next six years will address the challenges both local and international investors have expressed concern over.
The measures so far introduced have focused on easing business registration, increasing infrastructure development, reducing costs of energy and improving security.
Investment inflows
The two-day Kenya International Investment Conference (KIICO), which will be opened by President Uhuru Kenyatta at the Kenyatta International Conference Centre (KICC), will give the Government a chance to showcase its efforts in removing the bottlenecks to increased investment inflows.
For instance, manufacturers have long complained about the high cost of production in Kenya, with power bills being the biggest culprit. Further, power outages have negatively affected production schedules.
Last week, the President assured investors electricity tariffs would come down by 40 per cent by the end of December. Power producers are also focusing on generation of the more reliable geothermal power over hydropower.
“In this regard, my Government has developed several initiatives, including the 40-month programme, to inject over 5,000 megawatts of electricity into the national grid to reduce the cost of power,” Mr Kenyatta said.
Addressing stakeholders in the cotton industry last week in Nairobi, the President reiterated the Government’s aspiration to transform the country into a manufacturing and technology hub.
“We want to be among the first movers in Africa by creating an enabling environment to attract investment.”
Already, Kenya is the largest garments exporter in sub-Saharan Africa under the African Growth and Opportunity Act (Agoa) after the opening of a Sh2.2 billion textile factory last week.
The Government is focusing on labour-intensive sectors that are key drivers in job creation and industrialisation. Exports under Agoa have created 10,000 new direct jobs.
Security reforms
While several competitiveness indicators rank Kenya as among the top places to do business in sub-Saharan Africa, it has not attracted as much foreign direct investment (FDI) as it could.
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But East African Affairs, Commerce and Tourism Cabinet Secretary Phyllis Kandie said the State is optimistic investors will take notice of efforts to create a more conducive regulatory environment.
“We have been able to fast track substantial measures as part of the response to complaints from local and international investors,” she said.
“We will present a package of the reforms to investors over the next two days, and we are hopeful that in return, we will receive a good gesture in terms of commitment and sealing deals.”
She added that the Government has committed substantial resources to beef up security within the country and at border points.
In the current financial year, National Treasury Cabinet Secretary Henry Rotich allocated over 11 per cent of the Budget to security.
The money is being used to hire more police officers, purchase security equipment and fund supporting services.
The country has been facing security threats in the form of terrorist attacks and inter-community violence, which has sullied its reputation abroad, lowering international visitor arrivals.
However, according to a recent survey, visitor arrivals to Nairobi are expected to increase 9 per cent this year on account of Government efforts to market Kenya in African nations.
BUSINESS CENTRE
The Government has also established a digitised one-stop business centre to facilitate the registration of businesses and disseminate information on regulatory processes to investors.
This has piqued plenty of interest in foreign markets, with Kenya Investment Authority (KenInvest) Managing Director Moses Ikiara confirming that 30 countries will participate, as well as delegates from major international companies.
Dr Ikiara added that the Government will present potential investors from countries such as Malaysia, Egypt, Belgium and Germany, with a package of reforms so far undertaken to improve the investment environment.
“We have signed investment promotion and protection agreements, and also signed avoidance of double taxation deals with more than 10 countries,” he said.
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