1. Infrastructure
Kenya envisages a massive upgrading and extension of the country’s infrastructure. In this regard, the country has highlighted a number of infrastructure projects that present significant opportunities for investors in the coming years.
It is important to note that while the Government has put forward plans on how it would like to develop infrastructure, it is equally open to ideas and proposals from potential investors.
- Redevelopment of the Northern Corridor
- Development of a commuter railways system around Nairobi
- Building of a standard gauge line to replace the current Kenya-Uganda railway
- Design and Construction of a new terminal at Jomo Kenyatta International Airport
- Development of a new corridor from Lamu to South Sudan and Ethiopia (LAPSET)
Investments into these projects can either be through direct investments or through public private partnerships.
2. Environment and Natural Resources
Kenya as a country is endowed with conducive environment and a wide range of priority investment areas. The Environment sector ranges from climate change prediction and adaptation, catchment protection, sustainable exploitation of economically viable mineral resources to enforcement of environmental legislations.
Opportunities
Mining: Kenya is endowed with a wide range of minerals that remain unexploited due to inadequate knowledge on their status, economic viability and appropriate mining technologies. Already, an appropriate mineral prospecting and mining policy conducive to investment and Private Public Partnerships (PPP) in the mining sector is in place. Investors can focus on value addition through direct or joint venture partnerships.
Carbon Offset Schemes: While promoting Environmental conservation, opportunities exist in consultancy and capacity building to enable communities and corporations/firms access global carbon markets within the framework of Clean Development Mechanism. Tree planting projects for carbon schemes can be undertaken in forest areas around the country and in private and community land.
Climate Change Programmes: Potential for Public Private Partnerships exist in securing global funding mechanism to implement adaptation and mitigation programmes in Arid and Semi-Arid Areas Lands (ASALs), high-risk zones and Early Warning Systems and environmental monitoring covering climate change events. Investors can also participate in infrastructure projects and programs that focus on climate change.
Integrated waste management: opportunities exist in Solid waste management in major cities and towns with high levels of solid waste. This will help reduce environmental pollution. Investor can engage in this industry through Public Private Partnerships (PPPs) and may be extended to other cities and towns in the country. Additionally investors may participate in cleaning of city rivers and establishment and maintenance of public parks along the river banks.
Resources assessment: The country is faced with a challenge of estimating the value and value addition potential of most of its environmental resources. Investors can tap into this through provision of appropriate state-of the-art technologies for data/information collection and sharing for planning purposes.
Control of invasive weeds: particularly the water hyacinth: With a resurgence of invasive weeds particularly the water hyacinth (Eichhornia crassipes) in water bodies that pose a serious threat to aquatic eco-systems, opportunities exists in control of invasive weeds to a non-nuisance level through, community-driven efforts, mechanical harvesting using appropriate technologies or machinery, and biological control – through applied research. Invasive weeds can also be used manufacture environmentally friendly products such as furniture.
Eco-Tourism Facilities in Forest reserves : Opportunities exists in development of different facilities including eco-lodges, tree houses, guest houses, restaurants, campsites and canopy walkways.
3. Building and Construction
Overview
Kenya has a well-developed building and construction industry with quality engineering, building and architectural design services being readily available. This industry is currently on an upward trend following re-habilitation and reconstruction of roads and bridges under the Kenya Urban Transport Infrastructure Program.
Why Invest
With increase in population, and growing demand for affordable housing, opportunities exist in the construction of residential, commercial and industrial buildings, including prefabricated low-cost housing. Investors can also manufacture and supply construction materials and components for the sector.
Participate in Major Infrastructure Projects
Investor can also participate in major infrastructure projects such as Road construction and rehabilitation; Development of the Ksh 2 trillion Lamu Port and associated infrastructure, Rehabilitation of airports; Construction of power generation plants, construction of the proposed multi-billion shilling Konza ICT Park and construction of resort cities in Isiolo, Lamu, Diani, Kilifi and Lokichoggio towns.
Background
This sector is mainly agro based at the moment and plays an important role in adding value to agricultural output by providing forward and backward linkages with agricultural sector. However, there is a shift to export oriented manufacturing as the main thrust of Kenya’s industrial policy since the country aims to raise the share of products in the regional market from 7% to 15 % and develop niche products for existing and new markets.
Kenya is promoting development of Special Economic Zones (SEZs), Industrial Parks, Industrial Clusters, promotion of small and medium scale manufacturing firms, development of niche products, commercialization of research and development results.
Why invest
In addition to high demand for locally manufactured goods, regional markets are accessible for Kenya’s manufactured goods owing to its membership to two key regional economic blocs the East African Community (EAC) and Common Market for East and Southern Africa (COMESA). Furthermore, Kenya is one of the first Sub Saharan countries eligible to export its textile products to the USA under the provisions of the African Growth Opportunity Act (AGOA).
Investment opportunities exist for direct and joint-venture investments in iron and steel industries, manufacture of fertilizer, agro-processing, machine tools and machinery, motor vehicle assembly and manufacture of spare parts agro-processing, manufacture of garments, assembly of automotive components and electronics, manufacture of plastics, paper, chemicals, pharmaceuticals, metal and engineering products for both domestic and export markets.
4. Manufacturing
Background
This sector is mainly agro based at the moment and plays an important role in adding value to agricultural output by providing forward and backward linkages with agricultural sector. However, there is a shift to export oriented manufacturing as the main thrust of Kenya’s industrial policy since the country aims to raise the share of products in the regional market from 7% to 15 % and develop niche products for existing and new markets.
Kenya is promoting development of Special Economic Zones (SEZs), Industrial Parks, Industrial Clusters, promotion of small and medium scale manufacturing firms, development of niche products, commercialization of research and development results.
Why invest
In addition to high demand for locally manufactured goods, regional markets are accessible for Kenya’s manufactured goods owing to its membership to two key regional economic blocs the East African Community (EAC) and Common Market for East and Southern Africa (COMESA). Furthermore, Kenya is one of the first Sub Saharan countries eligible to export its textile products to the USA under the provisions of the African Growth Opportunity Act (AGOA).
Investment opportunities exist for direct and joint-venture investments in iron and steel industries, manufacture of fertilizer, agro-processing, machine tools and machinery, motor vehicle assembly and manufacture of spare parts agro-processing, manufacture of garments, assembly of automotive components and electronics, manufacture of plastics, paper, chemicals, pharmaceuticals, metal and engineering products for both domestic and export markets.
5. Information & Communications Technology
The size of the local ICT market is estimated at US$ 500 million and it is of note that companies such as Spanco, followed Airtel into Kenya to continue servicing them. These companies are expected to expand into the region , given Kenya’s its relative sophistication compared to neighbouring markets, and in order to service clients’ expansion plans into the EAC and beyond.
Why Invest in the ICT Sector
We are home a large number of highly educated and innovative talent
We are known for innovation as demonstrated by the all very well known MPesa Software for some of the best banks in the world.
We have a Stable pro-investment government – Our new Constitution that became law on 1st Aug 2010 has cemented the stability and guaranteed investors and citizens alike rights that promote economic and social growth.
We have instituted business friendly regulatory reforms – We are repealing and continue to repeal laws and regulations that impede investment. We have also enacted the Investment Promotion Act (2004) that has set up Kenya Investment Authority to assist you in obtaining licenses necessary for investment and to provide you further assistance and incentives.
We are at a strategic location as a regional financial, communications and transport hub– Our strategic location and well developed business infrastructure makes us a natural choice of location as a base for you regional offices and operations.
All the above factors coupled with the friendly business environment and an innovative culture have made Kenya a premier outsourcing destination and facilitated the formation of strong local BPO/ITES companies such as Kencall (awarded best non- European Call Centre, 2008), Horizon Contact Centres, Direct Channel, TechnoBrain (former Kentech data), Adept Systems and Craft Silicon, a leading software development house. There is equally notable interest from a number of international outsourcing currently at various levels of feasibility studies. Kenya is also host to regional offices for the world’s biggest technology companies including Microsoft, Google, Cisco, Oracle, IBM and SAP.
6. Money Banking and Finance
Kenya Envisions to have a vibrant and globally competitive financial industry that will not only create jobs but also to promote high levels of saving to finance overall investment needs.
Kenyan finacial sector comprises of Banking, Insurance, Capital markets, Pension Schemes and Quasi-banking institutions such as: Savings and Credit Cooperative Societies (SACCOs); Microfinance Institutions (MFIs); Building Societies, Kenya Post Office Savings Bank (KPOSB); Development Finance Institutions; (DFIs) and informal financial services such as Rotating Savings and Credit Associations (ROSCAs). Financial intermidiation in Kenya has continued to recorded high growth rates due to increased lending as reflected by the rise in domestic credit backed by significant financial innovation.
Financial services are expected to play critical in the next 18 or so years by providing better intermediation between saving and investments.
Why invest
The more than 40 banks banking sector is dominated by five large banks which account for the bulky of deposits. The remaining banks are small and have limited outreach. This has reduced competition and resulted in high cost of credit. Further given the low penetration of the formal financial services, investing in Microfinance institutions, banks and SACCO’s would have a considerable potential to address the large remaining demand for financial services by the large section of population that is unbanked.
Kenya is under-insured with penetration level of about 1 % of GDP. This signifies the necessity of having an insurance sector that can add more to the economic development of the country therefore a huge potential for the insurance business in Kenya.
7. Tourism
Kenya aims to be among the top ten long- haul tourist destinations in the world offering high end, perse and distinctive visitor experience.
Tourism is one of Kenya’s leading foreign exchange earner and third largest contributor to the GDP after agriculture and manufacturing. The sector has been growing fast as a result of various factors such as liberalization, persification of tourist markets and continued Government support and commitment to providing an enabling environment, coupled with successful tourism promotion and political stability.
Why invest
Investors can take advantage of Kenya’s endowment of unique tourist attractions such as beautiful coastal beaches, coral reefs, caves and river deltas, abundant wildlife including the ‘big five’ in their natural habitats, national parks and game reserves, good climate, beautiful geographical landscapes, savannah grasslands, forests, salt and fresh water lakes. Others include hot springs, mountains, botany and zoology, world heritage sites, and rich cultural history.
Out of the 26 Parks and Game Reserves in Kenya, only 7 parks including Masaai Mara, Nakuru and Amboseli are fully operational accounting for more than 80% of the total number of visitors. This presents an opportunity to develop and add value to the other parks with modern facilities and infrastructure.
Investors can also take advantage of several strategies and programmes that have been earmarked by the government to attract investments into the industry such as establishment of three resort cities, branding of premium parks, development of high value niche products, development of a replica of Kenya Utalii college at the Coast, and building of new high- end international hotels chains among others.
8. Agriculture
Introduction
Agriculture is the mainstay of the Kenyan economy directly contributing 26 per cent of the GDP annually, and another 25 per cent indirectly. The sector accounts for 65 per cent of Kenya’s total exports and provides more than 70 per cent of informal employment in the rural areas. The sector comprises of crops, livestock, fisheries, land, water, cooperatives, environment, regional development and forestry sub sectors. It also includes the development of arid and semi-arid lands.
Why invest
There are joint venture opportunities for foreign investors seeking local counterparts, Sugar and Cotton processing factories have been earmarked by the government for privatization. Others include export-oriented agri-business, horticulture and processing of oil crops and investment in large scale irrigation schemes.
Kenya’s competitive advantage as an investment location for agriculture is supported by various investor friendly factors that include:
- Availability of a well established export market
- Availability of multinationals in the sector
- Availability of affordable labour
- Investor friendly arrangements
The Kenya government can guarantee investor friendly arrangements such as:
- The Export Processing Economic Zones (EPZ) program which offers attractive incentives to export-oriented investors.
- The Tax Remission for Export Office (TREO), a program for intermittent imports for export production
- Generous investment and capital allowances.
- Double taxation, bilateral investment and trade agreements
9. Energy
Kenya’s energy policy emphasizes the need for sustainable energy supplies in adequate quantities at effective costs, so as to achieve national development goals. The policy also emphasizes delivery of quality energy services so as to ensure that Kenya will continue to attract investments in those economic activities of which energy inputs are basic to production at competitive prices. The country is dependent mainly on three forms of energy namely: petroleum, electricity and wood-fuel. To a lesser extent wind, solar and biogas are used as alternative energy sources.
Petroleum is the major source of commercial energy in the country providing about 87% of the country’s requirements. The transport sector consumes more than half of the petroleum fuels used in the country. Industry consumes some 31% of petroleum fuels.
Supply of electricity rose by 4.1 percent in the first seven months of 2006 from 3,149.5 million kilowatt hours (KWH) in a similar period last year. Consumption of electricity grew by 4.9 percent to 2,682.1 million KWH during the period in line with the increase in economic activity. Completion of Sondu-Miriu project towards the end of 2007 is expected to add about 60.0 million kilowatt hours (KWH) to the national grid system. A breakdown of electricity supply by source shows that Hydro-power, Geo-thermal and Thermal generation increased by 1.0 percent, negative 1.1 percent and 14.7 percent, respectively in the January to July 2006 period. The respective shares in the total electricity supply were 53.2 percent, 18.3 percent and 28.5 percent for hydropower, geo-thermal and thermal generation. In Petroleum sector, crude oil price increased by 27.85 percent to US $ 73.00 per barrel in July 2006 up from US $57.10 per barrel in July 2005.