Presentation on theme: "INVESTMENT OPPORTUNITIES IN KENYA"— Presentation transcript:
1 INVESTMENT OPPORTUNITIES IN KENYA Dr. Moses Ikiara, PhD, MBSManaging DirectorKenya Investment Authority (KenInvest)
2 Presentation Structure Role of Investment in economic developmentInvestment Opportunities in KenyaProcedures for Investing in KenyaRole of Financial Institutions in promoting investmentsRole and functions of KenInvest
3 ROLE OF INVESTMENT IN ECONOMIC DEVELOPMENT Kenya has envisaged to become a globally competitive and prosperous nation with a high quality of life by 2030.To achieve this, the country’s GDP should grow to more than 32% up from 20.6 % that was recorded between 2008 and 2012.The growth target is to be achieved through the following 6 sectors:TourismManufacturingAgriculture & LivestockICT and Business Processing OutsourcingFinancial SectorWholesale and RetailEnabling sectors: Energy and Infrasture
4 INVESTMENT OPPORTUNITIES Opportunities exist in production and export of products such as:Cut-flowersFrench beansPineapplesMangoes and other fruitsCerealsLeather and leather productsCanned beefHoneyFarm machinery equipmentFertiliser and farm chemicalsCertified seedsKenya’s Horticulture Exports meet global standards including the EU SPS standards and British Retail Consortium standardsKenya Exports a Variety of Vegetable products including fresh beans, fresh peas, brussels sprouts, brocolli, courgettes and baby carrots and Tropical fruit.
5 Tourism… Resort cities: Lamu, Isiolo, Turkana, Diani, Kilifi Kenya is naturally endowed in:-WildlifePleasant climateBeautiful scenerySandy beachesSportsmen & womenThere are enormousopportunities in :-1.Accommodation:Resort cities, 4 & 5 star hotels andHigh end lodges in parks2.Recreation and Entertainment:Amusement parks3.Conference facilitiesResort cities: Lamu, Isiolo, Turkana, Diani, KilifiAmusement parks (Bomas of Kenya)4 & 5 star hotels (JKIA. Mombasa, Kisumu, Nairobi)High end lodges in parksConference facilities ( Nairobi, Mombasa, Kisumu)
6 I.T. Enabled Services I.T. enabled services Call centers for both in-bound and outbound callsWide range of business outsourcing servicesMobile Software DevelopmentEducation and TrainingICT ParksDevelopment of Broadband infrastructureICT Major institutional reformsVery high GSM coverageKenya is a lead innovator in mobile money transfer.
7 Manufacturing for the Regional Market Kenya is a prime supplier of basic goods to the eastern and central African markets.Opportunities exist in;Plastic productsPharmaceuticalsFood ProcessingLeather and footwear industryPreserved and processed foodsCementSheet glassMotor VehiclesFertilizers and pesticideTextilesWood productsSalt worksTyresIron and steelKenya is a prime supplier of basic goods to the eastern and central African markets before moving into the manufacture of niche products for other markets.Kenya is home to a number of multinational corporation’s regional corporate and manufacturing head quarters includingCoca ColaWrigleysGeneral ElectricGeneral MotorsGlaxoSmithKlineMultilateral trade agreements and Regional economic blocs such as East Africa Community and Comesa ensure goods manufactured in Kenya have a competitive edge in the region.
8 Wholesale & Retail … …established distribution channels Formal retail: Attract and develop largeformal retail chain through JVs & standalone ventures(domestic and international )Supply chain:Drive efficiencies throughdevelopment of producerbusiness groups and largewholesale hubsSemi-formal retail:Retail markets to locateinformal players and helpthem growThe wide reach of Kenya’s retail sector both within Kenya and regionally is a catalyst for…established distribution channels
9 Financial Services… Kenya has a well developed financial sector. These are:-49 Commercial banks4 NBFIS2 Mortgage finance companies4 Building societies11 Insurance companies3 Reinsurance companies6 Development Finance Institutions (DFIs)Kenya’s Open, secure and competitive financial guaranteeKenya’s leading banks have market presence across East Africa
10 Enabling Sectors (Infrastructure) Lamu Port and Southern Sudan-Ethiopia Transport (LAPSSET)Target of over 200,000 housing units per yearHigh demand particularly in the urban areas across the countryNairobi Metropolitan Mass Rapid Transit ProgramInvestments in infrastructure and busesRapid rail systemprovision of light rail to ease traffic congestion and improve efficiency of transportation between the Central Business District and other parts of the metropolitanParking systemInvestment opportunities exist in the provision of both space and technology that complements promotion of public transport.Kenya’s Open, secure and competitive financial guaranteeKenya’s leading banks have market presence across East Africa
11 Enabling Sectors cont’d….. ENERGYEnergy sector – Geothermal & Alternatives sources-wind, solar, Bio fuel.Mining sector- exploration, mining and value addition through joint ventures.Building & construction-Low cost houses, Concessioning of roads.As the country grows 1,000 megawatts of generating plant are needed over the next decade—a doubling of current capacity.Strengths within the Energy Sector:Major institutional reformsexcellent cost-recovery pricing
12 Procedures for investing Company Registration Companies are incorporated with Registrar of companies and the corporate tax is of 30%.Complete Investment Application Form from Kenya Investment Authority for the issuance of an Investment Certificate to permit implementation and operation. The application will be submitted with copies of the Certificate of Incorporation, Memorandum and Articles of Association.Identify location or project site and undertake an Environmental Impact Assessment for approval depending on the sector by the National Environmental Management Authority as a pre-condition to the issuance of an Investment License.Land AcquisitionAn investor can acquire land by leasing and obtaining a lease grant or by purchasing and obtaining a title of ownership. It will be necessary to contact the ministry of lands to ascertain the ownership of the land. The land is then registered in the Ministry of lands upon payment of stamp duty which is at a rate of 2-4% depending on the value.
13 Procedures Cont’d…….Tax Pin /VAT Registration – Done online atRegistration with the National Social Security Fund (NSSF)Registration with the National Hospital Insurance Fund (NHIF)Single Business Permit from relevant local Authority.13
14 ROLE OF KENINVESTMandateKenInvest mandate is to promote and facilitate investments in Kenya by both domestic and foreign investors.Vision“To make Kenya a country of choice for Investments”Mission“To attract, facilitate, retain and expand both domestic and international Investments in Kenya through provision of quality services”
15 Our ServicesProviding Information on Investment opportunities and sources of capitalPromote both locally and internationally the opportunities for investment in KenyaAdvocacy for a conducive Investment climateFacilitate investors in obtaining necessary licenses and permitsAssist investors obtain incentives or exemptions under various Acts and other regulations
16 Investment Facilitation Summary of Role of KenInvestPolicy AdvocacyInvestment PromotionInvestment FacilitationInvestor TrackingAfter Care Services
17 Core Functions Investment Promotion Investment Facilitation Providing information on investment opportunities or sources of capital;Promoting the opportunities for investment available in Kenya by organizing forums, workshops and other marketing initiatives;Investment FacilitationInvestor Tracking and After Care Services;Issuing Investment Certificates;Assisting in obtaining necessary licenses and permits; andAssisting in obtaining incentives or exemptions under various Acts of Law and other regulations.
18 Core Functions cont’d. Policy Advocacy Reviewing the investment environment and making recommendations to Government and other stakeholders, with respect to changes that would promote and facilitate investment, including changes in licensing requirements.
19 Incentives(100% in major cities and 150% in satellite town investment allowanceCapital goods are zero ratedDuty exemption and VAT waiver for machinery and equipmentExport Processing Zones programme (Special Economic Zones)10 year tax holidayExempt from withholding tax and stamp duty
20 Guarantees…Kenya Constitution guarantees against expropriation of private property exceptfor purposes of public use or securityNo exchange controls guarantees repatriation of capital, profits and interests.Member of the Multi-lateral Investment Guarantee Agency (MIGA), an affiliate ofthe World Bank that insures foreign investments against non-commercial risksMember of the International Centre for Settlement of Investment Disputes (ICSID)which arbitrates cases between foreign investors and host governmentsMember of the Africa Trade Insurance Agency (ATIA) which insures investors againstpolitical risks20
21 Subcontracting and Partnership Exchange (SPX) SPX is a technical cooperation programme to link domestic enterprises in developing countries to supply chains of large companies (both domestic & international)The focus is to develop MSME capacity to meet buyer needs and thus identify profitable business opportunities for them
22 Why Sub-Contract?hKnowledge Based Reasons; we do not have this know-how, too much specialization requires…Capacity Based Reasons; insufficient capacity, temporarily increase in demand, too expensive to invest, labor rights, etc.Cost Based Reasons; supplier’s price is cheaper than our production costFocus in core business; more value added activities, more profit with less manufacturing22
23 Subcontracting and Partnership Exchange (SPX) SPX is a technical cooperation programme to link domestic enterprises in developing countries to supply chains of large companies (both domestic & international)The focus is to develop MSME capacity to meet buyer needs and thus identify profitable business opportunities for themThe programme is being implemented by UNIDO(United Nations Industrial Development Programme) with KenInvest and other stakeholders both private & public.
24 Benefits of Sub-contracting Benefits to MSMEs:Increased visibility of MSMEs to local and internationalmarketsGeneration of new business opportunities throughmatchmaking and linkage with buyersTechnical assistance to meet buyer needsImproved quality through advanced processes (efficiencyin production, technology upgrade, specialization)Cost reduction – better processes, better capacity utilization,less marketing costs due to direct contact with buyersSkills upgradingInnovation arising from improved productivity andcompetitiveness24
25 Benefits Continued….. Benefits to Overall economy: Benefits to Buyers: Assist buyers to focus on core areasCost reduction, less resource allocationAssured of reliable supplyImproved qualityBenefits to Overall economy:Job creation – both MSMEs and buyersIncreased productivity and competitivenessPromotes import substitution by increasing local contentPromotion of exports and new investmentsInward transfer of technology – from UNIDO, large TNCsContributes to realization of vision 2030Ultimately growth of the economy
26 Useful contacts KENYA INVESTMENT AUTHORITY P. O. Box 55704 00200, NairobiTel:Mobile:Fax:Website:26