Underfunding and red tape stifle key State agency

Investment Promotion PS Abubakar Hassan (centre), KenInvest Chairperson Sally Mahihu (right) and Managing Director June Chepkemei. [Edward Kiplimo, Standard]

Bureaucracy associated with decision-making in State agencies, inadequate funding and brain drain are some of the factors holding back a government investment promotion agency from achieving its goals.

Kenya Investment Authority (KenInvest) has also noted in its 2023-2027 strategic plan that a proposal to merge it with other State agencies and departments could prove a major handicap in delivering its mandate. 

KenInvest is a government agency charged with marketing and promoting Kenya as a preferred investment destination.

The five-year plan also documents the achievements of the just concluded 2018-2022 strategic plan and the challenges encountered in its implementation. 

During the 2018-2022 period, the Authority mobilised investments amounting to Sh414.3 billion. This is from 1,008 projects. 

Of this amount, Sh79.2 billion was mobilised locally, while Sh335 billion was from the foreign market

As a result, 41,127 individuals were employed over the period. 

The rollout of the 2023-2027 strategic plan will require Sh7.9 billion compared to the previous one whose budget was Sh6 billion. Of the Sh7.9 billion, the Authority agency seeks to mobilise over Sh6.2 billion from investors as it expects Sh1.7 billion from the exchequer. 

“One major challenge faced by KenInvest is inadequate exchequer funding,” says KenInvest in the 2023-2027 strategic plan. This, it adds, has hindered the full implementation of core activities such as investor targeting and aftercare programmes in the authority’s 2018-2022 strategic plan. 

Other activities affected are investment promotion, research and policy advocacy, corporate image building, branding and awareness creation.

“The limited funding has directly impacted KenInvest’s ability to achieve its targets and effectively carry out its mandate,” the Authority says. 

Inadequate funding has also made the agency unattractive to the top talent it needs to thrive.

This, combined with a proposal to merge KenInvest with State agencies performing similar roles contributes to the brain drain. 

The Authority says building and maintaining its capacity, especially in terms of staffing is paramount for its future success. It adds that a talented and skilled workforce is essential for executing the organisation’s mandate and achieving its goals. 

“In the face of budget constraints, it is important to prioritise attracting and retaining qualified personnel through competitive compensation packages, training and development opportunities, and a supportive work environment,” the Authority says. 

The proposed merger, on the other hand, affected KenInvest’s core mandate during the 2018-2022 period. 

The proposal, it says, diluted its efforts and reduced its effectiveness in attracting and facilitating investments. 

“It becomes more difficult for KenInvest to attract and retain talented individuals. Without sufficient resources, the authority was unable to offer competitive salaries, benefits, and professional development opportunities that can attract and retain high-calibre employees,” says the Authority.

KenInvest also points out how fragmented investment and promotional activities are in the country. 

“KenInvest, although primarily promotes and facilitates investments in Kenya, faces a challenge in the lack of a unified approach to investments by other relevant government agencies, resulting in an investor journey that is fragmented and inefficient,” it says. 

The lack of enough staff and brain drain has also caused weak institutional capacity and visibility challenges. 

The authority notes a reduced capacity for handling inquiries and applications.

“With a limited number of staff members, KenInvest struggled to efficiently handle the influx of inquiries and applications from potential investors,” the Authority says.

“Limited staffing resulted in inability to provide comprehensive support and assistance to investors throughout the investment process.”

Adequate staffing levels, the Authority says, would ensure that the organisation has the necessary human resources to effectively carry out its investment promotion and facilitation activities. 

“This includes hiring talented individuals with the right skills and experience as well as providing ongoing training and professional development opportunities to retain and enhance the capabilities of the existing workforce,” says the agency.

Potential investors are also denied this support through the authority’s structures of decision-making, which KenInvest says leads to delays or inefficiencies.

“This could be due to excessive bureaucracy or insufficient collaboration and communication among stakeholders,” says KenInvest.