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KONZA TECHNO CITY:
INVESTORS CONFERENCE
INVESTING IN KENYA
Presentation
From a Great Past to a Greater Future 1
ESTHER KOIMETT, CBS
INVESTMENT SECRETARY8th August, 2012
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Area: 583,000 sq. km
GDP : USD 35 Billion
Population : 40 million
GDP per Capita: USD 800 (USD 1700 in Purchasing
Power Parity terms)
Facts about Kenya
From a Great Past to a Greater Future 2
GDP % Growth(2011): 4.4%, 5.2% (Projected 2012)
Debt/GDP: 48%, B+ with stable outlook (Fitch Rating)
Gateway to:
East Africa Community 150 million people, among
the fasted growing regions in the world.Ethiopia, South Sudan, DRC 150 million people
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Real GDP growth of
4.4% (2011); 5.2%
(projected 2012);
Inflation for July
Kenyas Economy is on a Rebound After a Series of
Shocks: Domestic and External
5.1
5.9
6.3
7.0
5.8
4.45.0
6.0
7.0
8.0
(%)
Real GDP growth
From a Great Past to a Greater Future 3
2012 stands at 7.7%
The shilling
exchange rate stableat the range of KES
84-85 per US$
2.9
1.5
2.7
0.0
1.0
2.0
3.0
4.0
2003
2004
2005
2006
2007
2008
2009
2010
2011*
percen
tage
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Economic Prospects into the Medium Term and
Beyond
Projected growth of 5.2% for 2012 (rising gradually to 6% over themedium-term) is moderate given the obtaining economic
circumstances (both globally and domestically)
Overall, we expect this growth to be bolstered by continued
expansion in:
agriculture (with normal weather),
tourism (with improved security and marketing),
From a Great Past to a Greater Future 4
construction (with continued public infrastructure spending),
transport and communication (with expansion of ports), and
ICT (with increased investment in technology)
Exports expected to continue performing well given the relatively
strong growth in the sub region, and measures to promote Kenyas
exports globally.
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Flower Farming Using Geothermal Steam in Naivasha
(to boost Exports)
From a Great Past to a Greater Future 5
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Assessment of Kenyas Economic Management
by Independent Sources
Kenyas track record in sound economic management
has been validated through independent external
reviews by international financial institutions and rating
agencies.
The latest Country Policy and Institutional Assessment
(CPIA) Scores by World Bank released in June 2012
From a Great Past to a Greater Future 6
p ace Kenya at a score o . out o a max mum 5. T s s
well above the average for IDA countries (i.e. low income
countries) at 3.3.
The score is even higher for economic management and
structural policies which averaged a score of 4.1. The Standard and Poors rating for Kenya is B+ stable
Fitch rating is B+ positive.
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Tourism - Kenya
From a Great Past to a Greater Future 7
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From a Great Past to a Greater Future 8
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Kenya Investment Authority (KenInvest) wasestablished under the Investment PromotionAct, 2004, as the one-stop shop to promote andfacilitate investments in Kenya for both domestic
and foreign investors.
Institutional Framework for Promoting and
Supporting Investment - KenInvest
From a Great Past to a Greater Future 9
This role has been brought into sharper focusunder Vision 2030, which has set investmenttargets for identified priority sectors that will help
make Kenya an industrialized, middle incomecountry by the Year 2030.
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PolicyAdvocacy
Investment
Promotion
After Care
Services
KenInvest delivers its mandate through:
From a Great Past to a Greater Future 10
InvestmentFacilitation
InvestorTracking
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Investment Promotion:
Facilitates investments through:
Issuance of Investment Certificates;
Assisting investors to obtain necessary
From a Great Past to a Greater Future 11
licenses and permits;
Assisting to obtain incentives or exemptions
under various Acts and other regulations;
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Facilitation and Advocacy Roles:
Provides Information on Investment
opportunities and sources of capital;
Promotes, both locally and internationally,
investment opportunities in Kenya ;
From a Great Past to a Greater Future 12
Reviews the investment environment and makes
policy recommendations for the promotion and
facilitation of investment
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Step by Step Guide To Investing in Kenya
Issue of the Investment Certificate
RegisterApply to
ApprovalCriteria:
security,
Approval
Investment
From a Great Past to a Greater Future 13
thebusiness
forApproval
health andenvironme
ntrequiremen
ts
within 21days
Certificateissued byKenInvest
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Legal Protection for Investment
Kenya Constitution protects against expropriation of privateproperty
Free Movement of Capital : no exchange controls exist inKenya: investors can freely repatriate capital, profits andinterest.
Member of the Multi-lateral Investment Guarantee AgencyMIGA an affiliate of the World Bank insures forei n
From a Great Past to a Greater Future 14
investments against non-commercial risks
Member of the International Centre for Settlement of
Investment Disputes (ICSID) which arbitrates cases between
foreign investors and host governments
Member of the Africa Trade Insurance Agency (ATIA) which
insures investors against political risks
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Financial Sector Reforms
A financial infrastructure fully aligned to
international best practice
Review of banking, capital
Reforms to Improve Investment Climate
From a Great Past to a Greater Future 15
mar ets, insurance, an pension egis ations
Deepening and developing the financial
market
Working on an MOU with theCityUK to supportestablishment of International Financial Centre
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Business Regulatory Reforms
Reforms in the
Land registry
From a Great Past to a Greater Future 16
,
companies registry
The Single Business Permit
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Business Regulatory Reforms cont
Modernization of private sector laws
aimed at simplifying business
registration, dispute resolution and winding-
up procedures.
From a Great Past to a Greater Future 17
Bills before Parliament include:
New Companies Bill;
The Insolvency Bill;
Limited Liability Partnership Bill; andThe Partnerships Bill.
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Market Access/Integrationopportunities
Kenya is the gateway to the East
From a Great Past to a Greater Future 18
African Community (EAC) and isactively positioning herself to reapthe benefits from regional
integration in the EAC and the widerCOMESA market.
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Mombasa Port: Gateway to East Africa
From a Great Past to a Greater Future 19
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Trade Facilitation
Kenya is implementing an Electronic Single
Window System to serve as a single entry
point, for parties involved in trade and
transport, to lodge documents
From a Great Past to a Greater Future 20
e ec ron ca y, or process ng an approva
and make payments electronically for
fees, levies, duties and taxes due to the
Government, on goods imported or
exported.
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Existing taxation incentives are
favorable
100% investment allowance for manufacturing projects;
VAT remission on capital goods including machinery;
Export processing zones (10 year tax holiday, exemption on
duty and VAT on machinery, equipment and raw
materials, exemption from stamp duty and withholding tax
From a Great Past to a Greater Future 21
Duty remission on inputs for production of exported
goods; and
We are in the process of preparing a legislation on Special
Economic Zone (SEZ) to attract investment inmanufacturing
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Kenya is providing the right environment for implementation of PPPs
by:
1. Provision of Supportive Policy and Legal Environment
Issuing a PPP Policy by Government in December, 2011
A PPP Bill is currently in Parliament2. Placin the PPP initiative within the reform a enda
Creating an Enabling Environment for
PPPs
From a Great Past to a Greater Future 22
3. Establishing a PPP Secretariat at Treasury, as well as PPP
Nodes in Contracting Authorities
4. Adoption and localisation of internationally successful PPP
models
5. Preparation of Bankable PPP Transactions: A PPP Pipeline finalized in June 2012
World Bank financial support sought to prepare the priority
projects
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What The PPP Law Provides To Investors
Risk mitigation - Letters of Support, Guarantees
(Demand/Traffic Guarantee), subsidies
Inflation and interest rate indexation
Performance monitoring mechanisms
Direct Agreement and step-in rights to Lenders
From a Great Past to a Greater Future 23
Compensation for termination/ extra-ordinary events/ direct
impact of change of Laws/political event
Establishment of a Viability Gap Fund to support
economically viable projects which may not be financially
viable without Govt support
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A clear, transparent, fair and competitive process for
PPPs, covering Project
identification, selection, prioritization, preparation, appraisal,
procurement, approvals and procurement of project
Advisors;
A clear institutional framework for develo ment and a roval
What the PPP Law Provides To Investors
contdPPP Law Provides To Investors
From a Great Past to a Greater Future 24
of PPP projects Cabinet, PPP Committee, PPP
Secretariat, Contracting Authorities and the role of Treasury
in fiscal risk management and Contingent Liabilities
Government will prepare bankable projects before going to
the market; and Use of Privately Initiated Investment Proposals (unsolicited
bids) method of procurement when there is urgent need for
continuity and where there is intellectual /innovation.
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The PPP Process
1. Feasibility/RFP2. PPP Comm.
Approval
3. Pre-q/Competitive
Dialogue/Bidding
4. Evaluation/Negotiations: by
5. A roval b
6. A roval b
From a Great Past to a Greater Future25
ec .
& Commercial
PPP Committee
.Cabinet
7. Notify Successful
Bidder 8. Financial Close.
9. Formalize
ConcessionAgreement
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PPP Framework/Legal
Kenyas legal system is based on Common Law which isconducive for PPP development
Kenya has a New Constitution (2010) that provide
democratic and governance institutions (stability)
There is existence of conducive regulatory framework in
the utility sectors to facilitate PPPs (energy, ICT, Transport) Judiciar is under oin structural reforms to im rove
From a Great Past to a Greater Future26
business climate
There is a strong Contract law (contracts will be honoured)
Government, as a first step, issued PPP Regulations,
March 2009
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Menengai Geothermal
From a Great Past to a Greater Future27
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Concluding Remarks.
Our overriding objective is to create and sustain a
stable and predictable macroeconomic
environment that is supportive of private
investment.
In this way, we can grow our economy, reduce
From a Great Past to a Greater Future28
poverty and ultimately attain our Vision 2030
objectives.
In short, Kenya is open for business and you are
all welcome.
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Nairobi Welcomes You to Invest in Konza
From a Great Past to a Greater Future29
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From a Great Past to a Greater Future30