A recent UK-Kenya Trade & Investment Forum highlighted the opportunities for doing business in Kenya

Kenya, which recently celebrated the 50th anniversary of its independence, is a country on the move. A gathering of senior Kenyan and UK government and business representatives was joined by members of the international business community at the Mansion House, the official residence of the Lord Mayor of the City of London.

With a population of over 40 million, Kenya is the largest economy in East Africa and sits in the heart of a region that has been attracting significant interest from the global investment community.  The country has potentially significant oil deposits which could put it at the top of African oil producing states – Tullow Oil has announced its fifth consecutive oil discovery in the north - while regional integration and infrastructure developments projects are helping to cement its role as a regional hub.

An African Success Story

According to Atam Sandhu, Chief Executive of Developing Markets Associates, the organisers of the forum, Kenya’s energy sector is among many that are showing signs of responding to the demands of a growing economy.  “The financial services sector is well developed, as is the technology sector and IBM recently opened its first African research centre in Nairobi; a joint venture between IBM and the Kenyan government to explore the use of ICTs specifically for African development.”

With rising GDP growth rates, a boom in tourism and diverse agricultural exports, says Sandhu, “I have no doubt that Kenya is an African success story and that supporting it will bring reward for both its people and its investors.”

Kenya enjoys a strong economic relationship with the UK, which is its largest cumulative investor – over £1 billion annually into Kenya.  Over 180,000 Britons visit Kenya each year, the largest of any nationality.

The East African giant, which is one of the most industrialised in Africa, has set out its ambition to drive economic development and growth, along with job creation, and many blue-chip UK companies now operate in the country.

An Aspiring Regional Power

Kenya has one of the most diversified economies in Africa, said HE Ephraim Ngare, the Kenyan High Commissioner to the UK.  Its economy is currently expanding at 5.5% and the country’s growth is based upon expansion in all its sectors, especially agriculture, tourism, financial services, manufacturing, building and construction, IT and the services sectors.  Kenya has led the world in telecoms for financial services, with Mpesa the leading brand in this sector.

Investors in Kenya, he said, will benefit from a well trained and skilled human resources base – three-quarters of the population is under the age of 30 - as well as the opportunity to access the 130 million East African community and COMESA markets.  The country, he said, has “a rich menu of potential investment and business opportunities” as well as large quantities of mineral and other deposits.

“Kenya is positioning itself as an innovator in global services, particularly mobile payments and mobile banking, and transforming the way we are delivering banking, and taking it to the citizens of the country in a new way,” said Jeremy Awori, CEO of Barclays Kenya, and one of the speakers at the forum.

These new technological platforms have seen an increase in financial inclusion in the country, from 49% in 2009 to 67% of adults in 2013 accessing the banking sector – making it second only to South Africa.  “This allows banks to mobilise savings to invest into businesses,” he said. 

The financial sector is seen as one of the priority sectors for the country, and the government, the Central Bank, capital markets authorities and other regulatory agencies are working to create a stable economic environment to ensure that the sector continues to prosper.

Hope and Confidence

The Governor of the Central Bank of Kenya, Professor Njuguna Ndungu, outlined the country’s Vision 2030 and its progress towards double digit growth. “We are on the path towards where we want to be,” he said, and “the new constitution gives us hope and confidence.”

He highlighted the 10 year strategy for achieving East African monetary union, enabling trade and investment into Kenya to lead to a far more formidable market. “When you invest in Kenya, you actually invest in the region,” he said.

He projected the country’s GDP growth in 2014 to reach 6.3% and over 7% by 2016.  Kenya’s reform programme has been successful, he said, and has included the transformation of the education system to meet the skills requirements of a knowledge based economy.

The new government’s transformation agenda has led to reforms in transport, logistics and infrastructure, along with healthcare and education and programmes targeting vulnerable groups. Security is also a key government priority and considerable investment has gone into the police and security agencies.

Kenya’s tax revenues covers almost 96% of the country’s total budget, said the Governor, pointing out that investors were in no danger of the country changing its tax regime or raising taxes to finance debt.

Strategic Location

Kenya’s strategic location serving five landlocked countries gives it considerable advantages. It aims to position itself as the prime financial services hub in the region and contribute to developing capital markets operations.

The government has identified 182 flagship projects in its medium term plan designed to strengthen the country’s economic, social and political development and includes the establishment of Konza Technology City.  Techno City is focused on targeting the skills of young people in ICT and a range of other sectors. 

Kenya contains much of the world’s uncultivated land, creating huge opportunities for investment in agriculture.

Kenya has also built gender-related policies into its development targets. The country’s constitution requires one-third of all activities to include women, and job creation and economic learning for women is enshrined in Vision 2030.

Research suggests that East Africa has the potential to be the fastest growing region in the world and, should that prove to be the case, Kenya lies at its geographic and economic heart.

Top images: DMA (www.developingmarkets.com)