54 AFRICAN COUNTRIES

The Government of Kenya is trying to increase the role of private sector in the economy. The industrialization in the nation has put into place a policy frame-work to foster the creation of a conducive environment for private sector participation in the economic development.

To carry it further the Government has designed suitable incentive packages and export promotion programmes such as Manufacturing Under Bond (MUB), Export Promotion Zones (EPZs). Both these forms enjoys privileges such as tax holidays, exemption from duty on machinery, raw materials and intermediate inputs as well as removal of restrictions on foreign capital repatriation.

FDI  Values in USD Million Inflow  Outflow  2002 27.6 7 2003 81.7 2 2004 46.1 4 2005 21.3 10 2006 50.7 24 2007 728 36 2008 95.6 43.8

In addition, Kenya has been designated as a beneficiary sub-Sahara African country to benefit from Africa Growth and Opportunity Act (AGOA). Under the AGOA initiative, Kenya’s manufactured products enjoy duty free market access into US market.

Kenya also offers numerous opportunities in infrastructural development, financial sector, agro-processing, agro-chemicals, chemicals, pharmaceutical, mining and mineral processing, electrical and electronics, metallurgy, engineering and construction industry.

Telecommunication :

The ongoing liberalization and privatization present enormous investment opportunities to private investors particularly in the information technology and telecommunication sectors. ICDC wishes to interest investors in joint ventures in the sector. This includes the provision of cellular phones and internet services. Kenya as a country has a great amount of potential in Information Technology (IT), particularly software development due to the large pool of educated English speakers. Software development is simply basic logic and most of the Kenyans have the requisite basic education.

The Energy Sector :

Currently, the Kenyan oil market whose total product sales volume is around 2.3 million cubic metres per annum is served by eight private companies. The Government expects that by the deregulation of the oil industry the Kenyan market will open to new marketing companies and bring lot of opportunities for growth and investment.

The yearly demand for Liquefied Petroleum Gas (LPG) is approximately 28,000 metric tons. It is expected that potential demand for LPG would double this quantity in the near future. The supply and distribution of LPG has been restrained due to a number of limitations and of production from the Kenya Petroleum Refineries Ltd (KPRL) due to the lack of adequate rail transport wagons, and lack of import handling and loading facilities. LPG supply and distribution is therefore an area where there are a lot of opportunity for growth still remains.

The Government of Kenya plans to undertake other investments in the petroleum sub-sector which include such projects as oil exploration expected to cost about US$ 10 million and oil pipeline rehabilitation estimated at US$ 20 million.

Investment Opportunities in Financial Services :

ICDC together with Industrial and Commercial Development Corporation Investment Limited have been desirous to establish a commercial bank to operate initially in Kenya and the East African market in the long term. An initial capital investment of Ksh 200 million will be required. Preliminary work is in progress including approval by the Central Bank of Kenya. In order to realize this proposal, the local promoters are looking for foreign investors with finance and know-how.

Textile Sector :

ICDC has been involved in the textile sector for a long time. At the present it still has Rift Valley Textiles in its books. This project requires substantial refurbishment to bring the technology to the present age. ICDC has received some inquiries regarding the purchase of the plant but would prefer a comprehensive rehabilitation package.

Tyres Manufacturing :

The country presently has only one tyre manufacturing company i.e. Firestone (E.A.) Limited. ICDC has had long experience in this sector having been joint venture partners in this company. ICDC is convinced that another tyre manufacturing facility would be a feasible proposition and is therefore looking for joint venture partners to promote one. Some of the major dealers of imported brands could be interested in the proposal.

Agribusiness :

Pesticide sub-sector

Kenya produces a lot of pyrethrum which is exported in a semi-processed form or as dried flowers which fetch little money in the world market. This can be processed into the final product and in addition to imported ingredients these can be formulated into insecticides locally and exported as finished products.

There is also various opportunities for the manufactures of fungicides using some imported ingredients and mixing with locally available filler materials such as soapstone, limestone, clay etc.

Tourism :

The tourism sector of Kenya is its third largest foreign exchange earner. The industry is growing as an outcome of the measures of liberisation, diversification of tourist generating markets and continued Government commitment to providing an enabling environment, coupled with successful tourism promotion and political stability. There are enormous opportunities for investment in film production, recreation and entertainment facilities in the following areas:

• Conference Tourism
• Cultural tourism
• Cruise ship Tourism
• Aviation/tour and travel Tourism
• Eco-tourism

Potential investors can take full advantage of these opportunities through direct investments or joint-ventures with Kenyan entrepreneurs. Opportunities also exist in this sector in the construction of tourist hotels and game lodges all over the country.

Fisheries :

Kenya's water resources of the Indian Ocean and Lake Victoria provide a vast fishing potential for the country. Currently the deep sea fishing, prawn and trout farming are in their infancy but growing rapidly. Opportunities are also evident in fish processing (filleting and fishmeal production), as well as fisheries-support infrastructure (refrigerated transport, cold storage, etc.).

For Further Reference

 National Customs

 Kenya Investment Authority

 Doing Business With Kenya (Source: The World Bank Group)