DOING BUSINESS IN KENYA

Venue: Tokyo, Japan
Date:28th March, 2014

Dr. Moses IKIARA, PhD, MBS
Managing Director
Kenya Investment Authority

PRESENTATION STRUCTURE• EAC and Kenya at a glance• Japanese Investments in Kenya• Why invest in Kenya• Investment Incentives• Investment Guarantees• Lessons Learned• Useful Contacts

EAC and Kenya at a glance
Parameter

EAC Countries

Kenya

Surface Area (Inc.
water)

1.8 million sq. km

580,367 sq km

Population

145 million (2012)40.7 Million (2012)

Official language

English, Kiswahili, and French(Rwanda & Burundi)

English & Kiswahili

Total GDP

USD 97.6 billion (2012)

USD 34 Billion

Av. GDP per capita

USD 588 (2012)

USD 985

Av. Annual GDPgrowth

5.78% (2012)

USD 4.0 %Intra EAC tradevolumeUSD 3.8 billion (2010)-Total exports
volumeUSD 11 billion (2010)

USD 5.6 Billion (2012)

Total imports
volumeUSD 26 billion (2010)

USD 16 Billion (2012)

Total investmentflow

1.7 billion (2010)

USD 259 Million

JAPANESE INVESTMENTS IN KENYATRADING• Mitsubishi Corporation (1968)• Marubeni Corporation (1961)• Itochu Corporation (1961)• Sumitomo Corporation (1970)• Mitsui & Co. Europe Plc (2011)• Toyota Tsusho Africa (2002)
Manufacturing• Toyota Kenya (Toyota E A Ltd(1999)• Honda Motors (2011)• Honda Motorcycle Kenya Ltd(2013)• JKUAT Nissin Foods Ltd (2013)

Sales• Toyotsu Auto Mart Kenya Ltd(2010)• Carview Corporation (2013)
Communication• NEC Africa (Pty) Ltd (2011)
Construction• Komatsu Ltd (1980)• Nippon Koei (1984)• Konoike Construction Co., Ltd(1985)• Zenitaka Corporation (1999)• Tone Engineering Corporation(2008)• Toyo Construction Co. Ltd (2011)• Nippon Corporation (2011)• Kitano Construction Corp (2012)JAPANESE INVESTMENTS IN KENYA
Tourism• H.I.S. Kenya Ltd (2012)• DoDoWorld Kenya Ltd (1982)• White Lion Safaris Ltd (1994)• Mpata Investments Ltd (1990)
Others• Organic Solutions Ltd (2005)• Environment Technology Africa
Ltd (2011)
New Investments underConsideration• Pharmaceutical, Logistics, Sanitary
Facilities, etc.
• Fertilizer plant by Toyota Tsucho

Key Investments• Road Construction, Mombasa
Port Expansion Project, Olkaria
Geothermal Projects, Motor
Vehicles/Motorcycles
Assembling, etc.

WHY INVEST IN KENYA
1. A regional economic powerhouse• Strong fundamentals: high returns to investment in mostsectors• Investment protection –Constitution 2010, ICSID, MIGA, ATIA
• Regional integration: strengthening all the time; NTBs being
tackled; improving connectivity (54 KQ destinations inAfrica); preferential market access – AGOA, EPAs, Tripartite
FTA (600 million people)• Macroeconomic stability: stable exchange rate; low inflation;strong growth; sustainable debt level; financial services hub• Kenya is the 2nd best performer in the MSCI frontier stockmarket index for 2013, behind United Arab Emirates;• High rate of economic growth and thus growth in incomes
and the size of the middle class.

WHY INVEST IN KENYA
2.
•••••••

A welcoming environment
Government views private sector as engine of growth;
Improving regulatory framework;
Improved governance through a modern and a progressive
Constitution (2010) that has devolved governance to 47
Counties; Unprecedented success in 2013 elections.
A fully liberalized economy without exchange and pricecontrols;
Enactment of the Public Private Partnership Act 2013 thatcame into effect on 8th February 2013;
High quality human skills: reputed as the best in Africa
Good place to live and work: good food; excellent tourism
products

WHY KENYA INVEST IN KENYA
3. Diversified opportunities• Transformative Vision 2030 with many investment
opportunities: 182 flagship projects in 2013-2017 onlywith 29 ready PPP projects for uptake• 47 County Governments; each with numerous
investment opportunities• Investment opportunities in all sectors of the economy
due to its diversified nature;• Recent oil and mineral finds: About 8 oil and 2 gas
discoveries; great mining potential (titanium, coal, ironore, gold, niobium, rare earths);• Package of incentives offered to investors.
• Kenyans love Toyota! And many other Japanese products

TRANSFORMATIVE FLAGSHIP PROJECTS
Flagship Projects in MTP II (2013-2017)_________________________________________
Pillar/Directorate
No. of Flagships_________________________________________
Economic Pillar
34
Social Pillar
79
Political Pillar
6
Enablers and Macro Directorate
63_________________________________________
TOTAL
182_________________________________________

KONZA TECHNOLOGY CITYLAPSSET EQUATORIAL LAND BRIDGETRANSFORMATIVE FLAGSHIP PROJECTS
Lamu Port Southern-Sudan-Ethiopia Transport Corridor:•Lamu Port
•Railway Line•Highway•Crude Oil Pipeline•Product Pipeline•Oil Refinery•Resort Cities•Airports•High Grand Falls

Greenfield Airport at JKIA: Bird’s Eye View

Incentives• Investment Allowance (100% in major cities and150% in satellite towns)• Capital goods are zero rated• Duty exemption and VAT waiver for machineryand equipment• Export Processing Zones programme (SpecialEconomic Zones)– 10 year tax holiday– Exempt from withholding tax and stamp duty

• Many more promised by the new government:
investors can also make requests forconsideration

Guarantees…
Kenya Constitution guarantees against expropriation ofprivate property except for purposes of public use or securityNo exchange controls guarantees repatriation of capital,profits and interests.
Member of the Multi-lateral Investment Guarantee Agency(MIGA), an affiliate of World Bank that insures foreign investments
against non-commercial risks.
Member of the International Centre for Settlement ofInvestment Disputes (ICSID) which arbitrates cases between
foreign investors and host governments.
Member of Africa Trade Insurance Agency, which insuresinvestors against political and commercial risks.

Challenges• Poor ranking in ease of doing business– a top priority now• High costs of production: cost of power;transportation– 5000MW additional in 40 months– Unprecedented investment in road, rail & maritime
transport– Better logistics• Insecurity:– but back of Al Shaabab has been broken• Corruption –rather exaggerated

LESSONS LEARNED-1• Support investment promotion initiatives
between Kenya and Japan• Support development of investment
opportunities (bankable projects)• Conclude Bilateral Investment Treaties andAvoidance of Double Taxation Agreements• Innovative ways of investors learning
about the investment destination matters:
Nissin Foods starting off on research
partnership; KenInvest staffer training inJapan.

LESSONS LEARNED-2• Capacity building helps: understanding
each other’s way of doing business.
• Inter-Governmental cooperation evenduring difficult transitions sends rightsignals to investors.
• Targeted ODA stimulates investment byhelping to establish an attractive climate.

USEFUL CONTACTSKENYA INVESTMENT AUTHORITY(KenInvest)
Kenya Railways Headquarters
Block D, 4th Floor
Workshops Road,
Off Haile Selassie Avenue
P. O. Box 55704 - 00200, Nairobi
Tel:+254 730 104 200
Mobile: +254 0722205 424+254 0733601184
Fax: +254 20 243862
Email: info@investmentkenya.com
Website: www.investmentkenya.com

EXPORT PROCESSING ZONES AUTHORITY(EPZA)EPZA Administration Building
Athi River EPZ on Viwanda Road
Off Nairobi-Namanga HighwayBlock D, 4th Floor
Workshops Road,
Off Haile Selassie Avenue
P. O. Box 50563 - 00200, Nairobi
Tel:+(254-45) 6626421/2/3/4/5/6,Telkom wireless: (+254-20) 2511969
Fax: +(254-45) 6626427
Email: info@epzakenya.com
Website: www.epzakenya.com

USEFUL CONTACTSVISION 2030 DELIVERY SECRETARIAT LAPSSET CORRIDOR DEVELOPMENTAUTHORITY(VDS)
Deputy President’s Building
KUSCCO Center, 2nd Floor
Harambee Avenue
Upper Hill, Nairobi, Kenya
P. o. Box 74434 – 00200
Tel:+254 20 2722030
Nairobi, Kenya
Mobile: +254 0722205 424
Tel:+254 (020) 317270+254 0733601184+254 (020) 324700
Email: info@vision2030.go.ke
Fax+254 (020) 2210876
Website: www.vision2030.go.ke
Cell+254 723 716842
Email: info@lapsset.go.ke
www.lapsset.go.ke