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Trade and Investment climate in Keny

PRESENTATION BY:
DR. CHRIS KIPTOO, CBS
PRINCIPAL SECRETARY FOR TRADE
Table Of Contents

 Kenya at a glance

 Why Kenya

 Trade Overview

 Overview of Investment Opportunities

 Investor support institutions

 State Department for Trade – who we are.


Country profile…

Area 582,646 km2

Population (2017) 49.7 million


GDP (2016) US$ 71.58 billion
GDP per capita (2016) US$ 1,587

FDI Flows (2016) US$ 394 million – UNCTAD


GDP Growth Rates 5.8% and a projection of 6.1% in 2017
(2016) (WB)
Credit rating Standard & Poor's; B+ (stable)
Fitch: B+ (Stable)
Moody’s: B1 (Stable)
FDI Growth Rate 98.0% in 2013;
92.4% in 2014;
45.3% in 2015 (UNCTAD)
GDP Growth
Inflation Rate (2016) 6.3%
2012 2013 2014 2015 2016

Labour force (2016 est) 18.66 million (38% of population)


5.7% 5.8%
5.3% Currency 1US$ - KES 100
4.6% 4.7%

Total Imports Volume US$ 14.3 billion

Total Exports Volume US$ 5.8 billion

2012 2013 2014 2015 2016


Reports by a number of independent business analysts have
acknowledged Kenya’s competitiveness..

Key Features Source


Nairobi is Africa's Most Intelligent City Intelligent Community Forum

Kenya’s growth rate was ranked third globally in 2015 Bloomberg

Ranked among seven most promising global investment Fortune Magazine


destinations with good governance structures-2015
6th most 'Internet-ready' country in Africa -2015 INSEAD, French business
school
1st in Brookings financial inclusion 2015 Brookings

3rd in Barclays Africa Trade Index Barclays Bank

3rd most improved country in ease doing business 2016 World Bank

2nd best in logistics on the continent after SA (2016) World bank

2nd most attractive FDI destination in Africa after Morocco EY


(2016)
Kenya’s economy is multi-sector driven and has experienced
positive growth in the recent past

GDP Growth rate


Kenya BRICS S.S.A EAC
7
5.9 6.1
5.8 5.8
Kenya’s economy is the 5th largest in Sub- 6
4.9
5.3
5.7
5.3 5.4
5.1
5.7
5.2
5 4.6 4.54.4 4.6
Saharan Africa. 4.3
3.7
4 3.4
3
The country’s macroeconomic indicators have 2 1.6
remained fairly stable with; 1

• GDP growth rate being consistent within the


2012 2013 2014 2015 2016

past 5 years while retaining competitiveness


Inflation
with comparator regional economies.
2012

• Reduction in inflation for the past 5 years h 2013


as been experienced.
2014

2015

2016

0 2 4 6 8 10
Series 1

Source: KNBS
Key sectors of the economy feed into the GDP, with the SME sector
making a significant contribution (28.5%) to the nationaleconomy

A griculture

Mining

Manufacturing

Construction

Wholesale and Retail

ICT
% contribution to GDP

Real Estate

Education

Health

Transport &Infrustructure

Hospitality

Finance

SME
Besides having a sizeable domestic market, Kenya has signed
preferential trade agreements with a total population of over 1.4
billion people and market value of $ 29 trillion
1,466
Population - Millions of people
500
324
150 492

EAC COMESA US EU Total Population

Regional /global size with preferential agreements with Kenya – Billions, USD.
28,500

14,000

400 14,000
100
Total Duty Free
EAC COMESA US EU
Market
Kenya’s geostrategic location offers it preferential access to
regional and international markets

JKIA connects Africa to Europe, Asia and


soon the USA

Kenya has secured Category 1 rating,


granting it direct flights to the US.

The Port of Mombasa is gateway to East


and Central Africa region

Main transport & logistics hub to most of


the African countries in the region with
great developments in infrastructure;
ports, highways and SGR.
Kenya’s business environment has continued to improve thus
making the country a destination of choice for investors..

Key reforms and infrastructural frameworks have RANK


improved Kenya’s ranking in various independent EODB GCI -140 GII -141 IIAG -52
global reports; 160

140
o Presidential roundtables address emergent
120
issues in the business arena
o A cabinet committee on ease of doing business 100

o Business Environment Delivery Unit 80

o One Stop Centre for investors


60

o e-citizen: an official online payments platform


40
for government services.
20
o e-regulations: an online portal providing
investors with information and transparency 0
2012 2013 2014 2015 2016
EODB 121 129 136 108 92
on investment related procedures in Kenya GCI -140
GII -141
106
96
96
99
90
85
99
92
96
80
IIAG -52 25 21 17 14 12
Kenya’s performance in ease of doing business compared to other
economies ranks averagely but shows remarkable improvement
based on previous rankings.
UK (RANK 7) 82.74%

USA (RANK 8) 82.45%

UAE (RANK 26) 76.89%

JAPAN (RANK 34) 75.53%

RWANDA (RANK 56) 69.81%

SOUTH AFRICA (RANK 74) 65.20%

CHINA (RANK 78) 64.28%

KENYA (RANK 92) 61.22%

ETHIOPIA (RANK 159) 47.25%

NIGERIA (RANK 169) 44.63%

REGIONLAL AV (SSA) 49.51%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Source: World Bank, Doing Business 2017


Excellent business ecosystem.
Some of the MNCs present in Kenya…..
In Kenya the safety of your investments is guaranteed…

NO EXCHANGE CONTROLS
guarantees repatriation of
capital, profits and interests.

Signatory of several
Bilateral Investment
Treaties; Investment
Promotion and Protection
Agreements (IPPAs)
Trade Overview
KENYA'S TOP EXPORT PRODUCTS TO THE WORLD (2016)

Iron and Steel


Medicines
Tobacco and tobacco
manufactures
Coffee, unroasted
Tea

Articles of apparel

Horticulture
Source: ITC database, 2017

Total exports amounted to USD 5.7 billion in 2016


Trade Overview……cont’d
KENYA'S TOP IMPORT PRODUCTS (2016)
Animal/vegetable fats
and oils
Plastics in primary and
non primary forms
Industrial machinery
Medicinal and
Pharmaceuticals

Iron and Steel

Motor vehicles

Petroleum products
Source: ITC database, 2017

Top import products were; industrial machinery (17.7%), petroleum products (12.8%), road motor vehicles
(6%), iron and steel (5.3%), pharmaceutical products (4.2%), and plastics in primary form (4.1%), all
accounting for 50% of total imports in 2016.
Kenya- UK Trade Statistics

600

500
Amount in USD (Millions)

400
Exports
300 Imports

200 Balance of
Trade

100

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Exports 287.89 379.77 384.96 402.11 471.1 406.3 376.13 358.68 406.68 375.81
Imports 294.23 280.82 368.85 377.23 431.6 438.49 490.2 470.37 429.7 334.87
Balance of Trade 6.337 98.964 16.108 24.881 39.495 32.182 114.08 111.69 23.016 40.942

Top Exports: Tea and mate, Fresh/chilled vegetables, Fruits, fruit juices and nuts, Coffee and coffee
substitutes, toys, games and sporting goods.
Top Imports: Medicaments, Motor vehicles, worn clothing and other textile articles, Rotating electric
plant and parts thereof, Paper and paperboard, printed matter, alcoholic beverages
Tourism Overview

TOTAL ARRIVALS (2011 - 2016)

2011 2012 2013 2014 2015 2016


TOTAL 1,785,382 1,780,768 1,526,112 1,465,627 1,183,847 1,342,899
AIR & SEA ARRIVALS 1,265,136 1,236,024 1,091,095 861,758 752,073 877,602
CROSS-BORDER ARRIVALS 520,246 544,744 435,017 603,869 431,774 465,297
Tourists’ attractions

UNESCO WORLD HERITAGE SITES


LAMU OLD TOWN OVER 1,100 BIRD SPECIES FORT JESUS

L. TURKANA NATIONAL PARK MT. KENYA NATIONAL PARK HOME TO THE 8TH WORLD WONDER
Through vision 2030, Kenya has identified priority sectors that
double up as key economic drivers. Through the sectors, key o
pportunities have been identified.

OIL &
GAS
Investment opportunities in key sectors

SECTOR SECTOR SNAPSHOT BANKABLE POTENTIAL


OPPORTUNITIES OPPORTUNTIES
Manufacturing sector recorded a growth Mombasa Special Leather City in Machakos
Manufacturing to 3.5% in 2016 as a result of reduced Economic Zone at Dongo County -Kinanie
cost of production and increased volume Kundu –Ministry of Industry,
output Trade & Cooperatives

The Producer Price Index (PPI) increased Intergrated Steel Mill –


marginally by 0.2% in 2016. Due to Numerical Machining
stability of prices of imported raw Complex (NMC)
materials and reduced cost of electricity

Agriculture Only 16% of all exported agricultural Integrated Livestock Food processing hubs
output in Kenya is processed project in TARDA –TARDA

We can double the amount of our Value addition of Bamboo -


processed agricultural exports to boost ENSDA Agro-processing Zones
agriculture, create an additional 110,000
jobs and earn USD 600 million

Tourism Tourism accounts for over 4.8% of Nairobi International Forest Luxury Lodges -
Kenya’s GDP and 4.1% of the country’s Conference & Exhibition KWS
employment Conference –Bomas of
Kenya
Opportunities exist to increase the
number of visitors from current figure of
1.5 million
Investment opportunities…Cont’d

SECTOR SECTOR SNAPSHOT BANKABLE POTENTIAL


OPPORTUNITIES OPPORTUNTIES

ICT Kenya can gain a vital edge in ICT over its Konza Techno City National Spatial Data
competitors to earn USD 200 Million in Konza Technolopolis
GDP and create additional 45,000 jobs Development Authority
(KOTDA)
Due to:
-Competitive cost structure; 70% cost Digital Villages
advantage over UK and 50% over South Ministry of ICT
Africa

-Proximity to outsourcing markets, such


as South Africa

Oil & Gas Oil and Gas industry services such as The Nairobi Gold Refinery Development of LNG storage
drilling & maintenance are expected to Ministry of mines and facilities
grow by over 25% in the region each year Geology
and reach USD 3.5 billion by 2020

National iron Ore Mapping Development of National


Project petroleum depots
Ministry of Mines and
Geology
Additional Investment opportunities

Special Economic Zones


Mombasa Special Economic Zone at Dongo Kundu
The Ministry of Industry, Trade and Cooperatives
Area: 1292 ha
Land use: Free Trade Zone, Industrial Park, Enterprise area, MICE, Tourism Park,
Business Service Area, ICT Parks.

Leather City in Machakos County-Kinanie


The Ministry of Industry, Trade and Cooperatives
Area: 500 acres
Land use: Large leather footwear manufacturer and tannery companies

Textile Industrial Parks


KenGen Industrial park at Olkaria, Naivasha
Area: 1000 acres
Land use: Apparels & Textiles , Food and Beverage, Textiles Parks, paper and
Packaging &Warehousing and trading
Investment opportunities ……

Food processing hubs: Galana-Kulalu


The Ministry of Industry, Trade and Cooperatives
The project covers 1.75Million acres public land on the lower river of
Athi/Galana/Sabaki basin
USD$ 5.4billion

Integrated livestock project in TARDA region


Tana Athi River Development Authority (TARDA)
Development of a value chain in livestock
USD$ 132million

Rice Irrigation scheme


Tana Athi River Development Authority (TARDA)
The expansion of 200ha to 10,000ha for rice value chain
USD$ 89million
More opportunities….

Nairobi International Convention & Exhibition Centre


Bomas of Kenya.
Development of a business conference centre on 83 acres
USD$ 120 million

Development of Marina at Shimoni


Tourism Finance Corporation (TFC).
Entails development of a marina to provide world class tourism related
services

Isiolo Resort City


Ministry of Tourism.
Development of resort city
Opportunities Cont’d…

Konza Techno City


Konza Technopolis Development Authority (KoTDA)
IT hub to be built on 5,000acres of land
USD 14.5 Billion

Lamu Port South Sudan- Ethiopia Transport Corridor


LAPSSET Development Authority (LDA)
Construction of Lamu Port
USD $664 Million

Baringo-Silali-Paka Geothermal project


Geothermal Development Corporation
Development of 100MW of geothermal energy
USD$ 250 million
Recently completed projects…

 Two Rivers Mall-mixed use development promising visitors, shoppers,


businesses and residents unforgettable experiences – Next to UN Complex &
Diplomatic area

 Lake Turkana Wind Power project is located in Loiyangalani, Marsabit.


Comprises of 365 wind turbines @ with a capacity of 850kW & a high voltage
substation that will be connected to the Kenyan national grid.
 Wind farm to provide 310MW of reliable, low cost energy to Kenya’s national
grid

 English Point Marina is a contemporary development designed by Broadway


Malyan, a major international architectural practice. It offers apartment living in
the comfort, luxury.
 Facilities include a hotel, restaurant, spa & gym, serviced marina, water-sport
centre, boardwalk with retail outlets and underground car parking.
 Located on a 4 acre beach front site, across the creek from the historic Fort
Jesus and spectacular skyline of Mombasa old town.

 Garden City Mall is Kenya’s 1st integrated residential, retail & office (mixed-use)
development, offering over 400 apartments, duplexes & family villas, and
international shopping mall, 60,000 sq metres of office space, a modern
business hotel and state-of-the-art medical centre.
In this regard a number of incentives have therefore been put in
place to facilitate entry and expansion of investment..

General Incentives
EPZ Incentives
• Capital goods and raw materials are zero-rated;
• Plant, Machinery and equipment are duty exempt; • 10 year tax holiday;
• Some of the plant, machinery and equipment are • 25% corporate tax for another 10 years; 30% from
exempt from VAT; 21st year;
• Market access in COMESA & EAC markets with no taxes • Duty & VAT exemption;
• Single license;
• Investment allowance • Exemption from stamp duty; and
• 100% Nairobi, Mombasa and Kisumu cities; in the • Exemption for withholding tax
first year of use
• 150% - Those in other parts of the country

SEZ Incentives
Capital Market Incentives
• 10% corporate tax for first 10 years;
• Issuance of at least 40% of share capital- 20% tax • 15% corporate tax for subsequent years;
rate for 5 years
• Duty & VAT exemption;
• Issuance of at least 30% of share capital- 25% tax
• Single license;
rate for 5 years
• Exemption from stamp duty; and
• Issuance of at least 20% of share capital- 27% tax
rate for 3 years • Exemption for withholding tax
Establishing a company in Kenya has been made easy
especially with the setting up of a One Stop Center at KenInvest

Visit www.investmentkenya.com & fill


in the investment application form

KenInvest also undertakes


After-care services to Register your business.
pick out investor concerns All company/business registrations are
done via www.ecitizen.go.ke except for
Limited Liability Partnerships which
are done at the Registrar of companies
or through a lawyer

Step by step
guide
Apply for statutory requirements:
 Tax PIN/VAT registration
Once a company begins operation, visit www.kra.go.ke
KenInvest undertakes  Register with the National Social
tracking services to ensure Security Fund (NSSF)
smooth project implementation  Register with the National Hospital
Insurance Fund (NHIF)
 Acquire a Single/Unified Business Permit
from the relevant local Authority

Issuance of Investment Certificate


Submit to KenInvest your
from KenInvest upon compliance
Application form with copies of;
with Health, Environment & Security requirements
 Certificate of Incorporation (for local company)
 Certificate of compliance (for foreign company)
 Memorandum and Articles of Association
(CR2, CR8, CR12)
Kenya remains the destination of choice for investment in Africa.

“Kenya has emerged as one of Africa’s frontier


economies”
IMF MD-
Ms. C. Lagarde

“If you are going to do business in Africa, Kenya is


almost a requirement.”
Former CCA President-
Mr. Stephen Hayes

“I have been everywhere and Kenya is my favourite


place.”
Virgin Atlantic CEO –
Mr. Richard Branson
Investor Support Institutions…….
Institution Mandate Contact

Kenya Investment Investment Promotion and Facilitation info@investmentkenya.com


Authority

Export Processing Promote and facilitate export oriented info@epzakenya.com


Zones Authority investments

LAPSSET Coordinate and manage the implementation of info@lapsset.go.ke


transport corridor

KOTDA Construct and Setup KOTDA konza@konzacity.go.ke


Kenya Revenue Promote efficient tax administration callcenter@kra.go.ke
Authority

eCitizen Providing public services to citizens www.accounts.ecitizen.go.ke


electronically

Export Promotion Developing and promoting Kenya's exports chiefexe@epc.or.ke


Council

Special Economic Zones Development and management of enabling ps@industrialization.go.ke


Authority environment for global and local investment.
Kenya Investment Authority (KenInvest)
Kenya Investment Authority - A state corporation under the Ministry of Industry, Trade and Cooperatives
established under the Investment Promotion Act No. 6 of 2004, with the mandate of promoting and
facilitating investments in Kenya

Key functions
Welcome to Kenya and be part of the success

State Department for Trade


Teleposta Towers, Kenyatta Avenue,
15th Floor
P.O Box 30430-00200
Nairobi
www.trade.go.ke
ps@trade.go.ke

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