WHY INVEST IN KENYA

 By Ruzeki, Shadow News 

First Published at 1:02 PM of Friday, April 21, 2023

Here's why Kenya is perfect country for investments. 

• Huge market access 
• Effective Air and Communication hub 
• Huge skilled and educated labour force 
• Political stability and favourable investment policy 
• Liberalized and strongest economy in the region 
• Vibrant capital market, among other aspects. 

Kenya is strategically located as a gateway to East and Central African region. 

With at least 330 mile border to the Indian Ocean, Kenya is well suited as a production and distribution base to service Africa, the Middle East, Europe, South Asia and other Indian Ocean Islands. 

Kenya has the largest and busiest airport in Eastern and Central Africa. Jomo Kenyatta International Airport functions as an effective Air hub between Africa, Europe and Asia. 

Kenya also serves as the communication Hub of the region. 

MARKET ACCESS 

Kenya’s membership to regional economic blocs coupled with her strategic geographic position makes the country the gateway to the huge East African Community (EAC) market with over 140 million people and the Common Market for Eastern and Southern Africa (COMESA) market with over 480 million people. 

Kenya is a beneficiary of several trade preferential arrangements which includes The African Growth and Opportunities Act (AGOA), which allows for quota free and duty free access to the USA market for over 5,000 items produced in Kenya and The new Africa Caribbean and Pacific-European Union (ACP-EU) Economic Partnership Agreement (EPA), which gives duty free access to the European Union among others. 

SKILLED AND EDUCATED Labor force  

Kenya has a huge pool of labor force that is one of the best educated in the world, English-speaking and extremely adaptable. Qualified professional staff can be hired at reasonable pay-scales, in all occupations and at all levels of expertise. 

POLITICAL STABILITY & FAVORABLE INVESTMENT POLICY 

Political and Macro Economic Stability 

Kenya enjoys stable macroeconomic environment. The government operates sound macroeconomic policies that promote growth by providing a more secure environment for private sector investment decisions. 

Political stability and supportive legal environment. 

Kenya is a multi-party Democracy with a unicameral Parliament which creates laws which are administered by the Executive arm of the Government. 

The Kenyan Constitution protects private property and provides safeguards against expropriation of such property without compensation. 

Additionally, Kenya is a signatory to Multilateral Investment Guarantee Agency (MIGA), an agency of the World Bank and a Member of the International Council of Settlement of Investment Disputes (ICSID). 

In case of Commercial disputes, Kenya has a Commercial Court under the Kenyan Judiciary. 

LOW RISK INVESTMENT ENVIRONMENT 

Kenya’s investment climate is the strongest in the East Africa Community, with FDI flowing in from emerging and developed markets and a high volume of multinational companies with regional and continent-wide headquartered in the country. 

POSITIVE INVESTOR SENTIMENT 

FDI has been on the rise and is stronger than investment in other EAC countries. Given its position as the economic, commercial and logistical hub of East Africa, private equity capital is now flowing into Kenya. 

In 2013, Kenya was the top destination for international investors in the Eastern Africa Region after attracting over 10 private equity deals valued at over USD 110 million; and in 2015, PwC ranked Nairobi as the most attractive African city for FDI. 

According to a UNCTAD report, Kenya is developing as the favored business hub, not only for oil and gas exploration in the sub region but also for industrial production and transport. 

The country is set to develop further as a regional hub for energy, services and manufacturing over the next decade. 

East Africa FDI Inflows, MN (source: Worldbank) 

EAST AFRICA’S LARGEST ECONOMY 

Liberalized and strong economy in the region. 

Kenya is the largest and the most advanced economy in East and Central Africa; with strong growth prospects supported by an emerging, urban middle class and an increasing appetite for high-value goods and services. 

STRONG AND LARGE REGIONAL PLAYER 

Kenya has the second largest population within the EAC at 55 million and is growing at a rate of 2.8 per cent per annum. There is a rising trend towards urbanization, which is contributing to an increase in consumer demand for high value goods. This trend is fore casted to continue, with over 50 per cent of the population expected to live in urban areas by 2050. 

The size of Kenya’s middle class is growing as evidenced by the growth in its gross national income per capita, which has increased at a CAGR of 2 per cent over the past 10 years. 

VIBRANT CAPITAL MARKETS 

Foreign participation in Nairobi Security Exchange: 54.1 per cent of total equity turnover (Data for January-June 2014) 

HIGHLY DEVELOPED SOCIAL AND PHYSICAL INFRASTRUCTURE 

Kenya affords a pleasant and quality standard of living with its spectacular and diverse natural resources. Ranging from wildlife and sceneries. Including the world famous Maasai Mara, the great Rift Valley among others. 

The country also boasts of high quality social amenities such as restaurants, hospitals and Entertainment spots. Kenya has improved roads, airports and modern train services. A good reason why the country has the highest number of Expatriates living and working in Kenya. 

REDUCING ENERGY COST AND IMPROVING ENERGY AVAILABILITY 

Kenya is ideally positioned to unleash Africa’s power generation capacity through its focus on green energy and cost effective sources of energy, set to contribute to a 5000 MW increase in the national power grid. 

POWER & ENERGY STRATEGY 

Increasing share of power generated from green and more cost effective sources, with a target to increase electricity generation capacity by 5,000MW from the current 1,644MW to 6,700 MW in 3 years. 

Key Power Project and Recent Resource Discoveries. 

WIND POWER PROJECT 

300 MW Lake Turkana Wind Power Project valued at USD 820 million. 

WATER DISCOVERY 

Two new water sources at Turkana Basin and Lotikipi Basin holding 250 billion m3 of water, sufficient to supply Kenya for 70 years. 

OIL DISCOVERY 

Discovery of reserves by Tullow oil are estimated to extract as much as one billion barrels. 

GEOTHERMAL POWER PROJECT 

43,000 MW Geothermal Power Project in Baringo valued at USD 135 million. 

COAL POWER PLANT

5900 -1,000 MW Coal Power Plant in Lamu. 

NATURAL GAS PLANT 

6700-800 MW Natural Gas Fired Plant near Mombasa through a PPP. 

WELL ESTABLISHED PRIVATE SECTOR 

Kenya’s private sector is substantial and includes a number of foreign investors. 

Key players in voicing private sector concerns include: Kenya Private Sector Alliance (KEPSA), Federation of Kenya Employers (FKE) and the Kenya Association of Manufacturers (KAM).