Kenya has launched the Nairobi International Financial Centre (NIFC) that seeks to increase investments in the country, with green finance and financial technology among its key areas of focus.
During the launch of the centre yesterday, insurance firm Prudential and electric vehicles assembler Arc Ride were among the first clients for NIFC, with more expected to join.
NIFC, Nairobi Securities Exchange (NSE) and Air Carbon Exchange Group of Singapore also signed an agreement for the set-up of the first carbon exchange in the region.
The exchange, once established, will be a platform where firms and individuals making climate-friendly investments can sell carbon credits.
By 2030, NIFC aims to incrementally raise over Sh236 trillion ($2 billion). “Our goal is to raise the profile of Nairobi in the global investment radar and create conditions to scale this growth to new heights. In addition, we aim to attract large pools of capital,” said
NIFC Chairman Vincent Rague (pictured).
“To achieve these targets we have prioritised four key areas: green finance, financial technology, investments funds and creating conditions for more multinationals to make Nairobi their regional headquarters.”
Head of Public Service Joseph Kinyua said the centre will be key in growing foreign direct investment. “NIFC has been designed to give more confidence to the large pools of global capital that have been watching our progress but have not yet made decision to invest,” he said. “We know that investors have options and we want them to choose Kenya.”
He said the centre must crowd in investment that otherwise may have not been committed. “It must be bold in taking steps that challenge the status quo in order to support innovation.”
Mr Kinyua said the launch of NFC was a major milestone, with the government having started laying the groundwork for the centre in 2008 when it launched the Vision 2030.
“Under the economic pillar of Vision 2030, the government had planned to have a robust financial sector that would attract sufficient capital and investments to build a diversified, innovative and sustainable economy.
“Going forward, the government had to come up with the best way to have a robust financial sector capable of raising funds for projects and tap into new investments coming to Africa,” he said.
“The world today is different from that of 2008 but the case for NIFC is more compelling.”
National Treasury Cabinet Secretary Ukur Yatani said NIFC would cement Kenya’s position as an African hub while enabling it to take advantage of opportunities presented by the African Continental Free Trade Area (AfCFTA).
“The establishment of NIFC is a testament of the government’s commitment of positioning Kenya as a continental hub for financial services,” he said.
“We are desirous of attracting investors to come up and put their investments here and providing such a platform will give the necessary confidence to the international (community) that Kenya is prepared and aligned.”
The Cs said NIFC will provide an important avenue for businesses in Africa to explore opportunities presented by AFCTA by facilitating investment and trading in Sub-Saharan Africa and gives Kenya the opportunity to lead the process.
He said the country’s economy had made major strides in recovering from the beatings it had been dealt by Covid-19, citing last year’s 7.5 per cent growth as well as the 6.8 per cent registered in the first quarter of 2022.
Mr Yatani, however, acknowledged the major setbacks that have resulted in the rise in cost of living. These, he noted, are factors that are beyond the country’s control and have destabilised not just Kenya but the global economy.
“The launch of this institution has come at a time when the country has had significant growth. Last year we registered a growth of 7.5 per cent of GDP…the last time we posted such a growth was over 10 years ago,” he said.
“Sometimes, we get carried away by temporary challenges, many of which are due to external shocks that have destabilised much of the global economy, but as an economy were are well on course.”