Kenya is awash with investment opportunities that are begging to be seized. They are in diverse sectors that include tourism, agriculture, textile, footwear, ICT, and manufacturing.
At the heart of Kenya’s investment journey is the Kenya Investment Authority (KenInvest), whose mandate is to promote and facilitate private investment in Kenya, both from domestic and foreign investors.
In order to revamp this vital investment body, we need to develop a conducive legal investment framework. Critically, there is dire need for the National Investment Council to be established. Although anchored in the Investment Act that came into force in 2004, 17 years later this Council has never been established neither has this responsibility been transferred elsewhere. Once it is established, it will ensure high-level decision-making since it will be chaired by the President.
There is also an urgent need for both the government and private sector to prioritize the reliable, consistent, and comprehensive collection of investment data. Currently, such data barely exists at the national and county levels, which undermines smart investment decisions. Questionably, Keninvest issues Investment Certificates that do not necessarily connect investors to distinct incentives as it is practiced in other East Africa Community (EAC) Countries including Rwanda. Consequently, some Foreign Direct Investors (FDI) simply proceed to establish investments directly, and, in this sense, accurate data that would be relied upon by the Kenya National Bureau of Statistics (KNBS) is lost.
In order for KenInvest to shepherd trillions of investment funds into the country, it needs to operate at an optimal level. At such a level, the Investment Council should be fully operational. In addition, funding for KenInvest should be guaranteed and sufficient to even support diverse valuable Investment symposiums. Furthermore, there should be a real-world One Stop Shop (OSS) to ensure the registration of all investors and coordinate investment.
As re-counted Kenya’s investment struggles were evidenced during the second quarter of 2019 when manufacturing reduced by 3.9 percent. This was a sharp decline from 2018 when it expanded by 4 percent during the same period. These figures represent thousands of people whose jobs are either lost or gained every time manufacturing contracts or expands. In this regard, investment has a direct bearing on people’s livelihoods.
Therefore, I suggest that we borrow a leaf from South Africa’s highly strategic approach to investment.
South Africa’s industrialization vision is supported by four master plans. Through the poultry master plan, Shs 5.7 billion was invested to upgrade poultry production. Consequently, South Africa now produces one million more chickens every week. Similar growth was experienced through the clothing, textile, footwear, and leather masterplan. In late 2019, more than Shs 3.5 Trillion was invested into this sector in order to increase local manufacturing facilities together with Small, Medium, and Micro Enterprises (SMMEs).
In the same investment vein, Ford Motor Company in South Africa invested Shs 114 billion towards the expansion of their manufacturing facility and consequent increase in manufacturing the next-generation Ford Ranger bakkie. In his State of the Nation address last February, South African President Cyril Ramaphosa announced that this particular Ford Investment would, ‘support the growth of around 12 small and medium enterprises in the automotive component.’
Such is the power of investment in expanding the private sector, enhancing its productivity, creating jobs, and spurring economic growth.
Kenya is well poised to follow in South Africa’s robust investment footsteps. Despite the economic challenges occasioned by Covid-19, Kenya’s economy remains the strongest in the region. It accounts for more than 40% of the East African GDP. This predominant economic presence in the region is fueled by economic growth that has averaged approximately 6 percent for the past decade. Our inflation rate of 5.7 percent has provided further stability to this economy.
In the midst of this strong economy, we continue to have one of Africa’s most skilled workforce.
Against this backdrop of a strong economy and an equally strong workforce, Kenya is ripe for drastically increased investment. For this to happen, we need to fully empower KenInvest and other investment stakeholders in the country.
As such, we should redouble our efforts in guaranteeing a conducive investment climate in the country. Thankfully as a World Bank respondent on Ease of Doing Business in Kenya I can confirm that we are on track to do so. In the 2020 edition of the World Bank’s Doing Business rankings, Kenya shot to the 56th place up from 86th spot the year before. We must now improve on this by unlocking the floodgates of investment. That way, we shall be on course to achieve double-digit economic growth that will in turn fuel more investment.
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