By Chrispinus Omar NAIROBI (Xinhua) --
Kenya’s business environment is set to change
radically with the expected launch of the first phase of the
Chinese-funded Standard Gauge Railway (SGR) in June and the
opening of the first berth at the second port of Lamu in 2018, a
Kenyan investment official has said.
Authority (Ken-Invest) CEO Moses Ikiara said Kenya was gearing
up for the arrival of mega-investors, including an auto company
that hopes to set up an operating hub in Nairobi.
“These are indeed
very exciting times for our country,” Ikiara told Xinhua in an
interview, without naming the company due to regulatory
Ikiara said with the
first berth at the second port of Lamu ready for use in 2018 and
the government still working towards a preferential arrangement
for large investors seeking to use Kenya as a regional
manufacturing hub, the investment body was under pressure to
government released a draft Kenya Investment Policy for March
for public scrutiny on April 3, promising to create a single
stop for all investors.
“We hope to have
established the one stop Kenya investment Centre by end of
April. The government has already done the nominations for 11
key institutions which would form part of our investment
interactions,” Ikiara said.
According to the
official, the completion of the China-funded railway project
would ease the flow of freight from the port of Mombasa to the
The added advantage
in logistics would enable companies operating in the country to
produce at more affordable costs.
“We have managed to
reduce the amount of time a container used to cross from the
port of Mombasa from 24 days to just six days. We hope to do
even better from June when the SGR project becomes operational,”
Kenya hopes the
completion of the first phase of the SGR, which would greatly
increase the speed at which freight moves, would cut the cost of
freight transportation by a massive 40 percent, Ikiara said.
“We are discussing a
range of issues to improve our investment climate. We are
contemplating reducing the minimum capital requirement for local
investors. This will encourage more local investors to come on
board,” Ikiara said.
readily admit that the high cost of energy and the lack of
preferential arrangements have made it more difficult for Kenya
to compete for large investors.
Kenya has lowered
the cost of electricity for large-scale investors from a high of
0.16 U.S. dollars per kilowatt hour to 0.12 dollars with plans
to further cut the price to just 0.7 dollars.
Meanwhile, Kenya is
progressing with efforts to implement its grand vision of
setting up Special Economic Zones.
The government is
expected to soon announce the appointment of the Chief Executive
Officer of the Special Economic Zones, a new industrial park
which would help advance manufacturing.
With the new
measures announced, Ikiara said the East African nation believes
its ranking on the World Bank’s Ease of Doing Business Survey
would improve from 114, but only if further measures are also in
place to ease the doing business environment for the Small and
Medium Enterprises (SMEs).
Under the new
arrangements, Kenya plans to increase the level of private
investment in relation to the GDP to 24 percent in 2020 and to
32 percent by 2030.
The government also
hopes to increase the level of manufactured products locally to
20 percent of the GDP.
These measures would
help the country achieve its dream of a regional manufacturing
hub, soon to be supported by an upcoming oil and gas industry,
according to government officials.
“We want market
entry to be easy and transparent. We are working on good logic
and a series of incentives which would be based on conditions
being met by foreign investors, such bigger tax incentives to
foreign investors with bigger local investment partners,” Ikiara