Transcript Document 182281

TRADE AND INVESTMENT
OPPORTUNITIES
IN KENYA UNDER AGOA
THE SAFARI COUNTRY
INTRODUCTION
Africa is endowed with huge natural
resources and is emerging as the
new development frontier of the 21st
Century.
AGOA provides duty free market
access to 39 SSA beneficiary
countries for over 6,400 products.
Kenya will be hosting the AGOA
forum between 4th to 6th August
2009.
INTRODUCTION
Your Ultimate Investment Partner
The Republic of Kenya
is in East Africa and
neighbours
Ethiopia,
Somalia,
Tanzania,
Uganda, Sudan.
Size:582,646 sq kms.
Population:37.2 million
(2007)
GDP:$27 billion(2007)
Per capita:$3,000
KENYA AT A GLANCE
Kenya is a member of
UN,
AU,
EAC,
COMESA, ACP, Non
Aligned
Movement,
and
WTO
among
others. It hosts the
only headquarters of
UN
outside
New
York, Geneva and
Vienna i.e UNEP and
Habitat.
REGIONAL HEADQUARTERS
Nairobi-Capital City
Kenya is also a regional
headquarters for numerous
international Media and
NGO Agencies. It also
hosts regional offices of
World Bank, IMF, IFC,
WHO, UNDP, UNHCR,
UNESCO, East African
Development
Bank,
Eastern
and Southern
African
Trade
and
Development Bank (PTA
Bank) among others.
NAIROBI- REGIONAL AIR
SERIVICES HUB
Regional air traffic and
transit hub providing
connections to most
destinations in Africa,
Europe, Asia and beyond.
In 2008 Travel News &
Lifestyle Magazine voted
Kenya Airways as African
Airline of Choice, Best
Regional Airline,Flying
Blue voted the best
Frequent Flier program and
Msafiri - Best inflight
magazine
CENTRE FOR REGIONAL
CAPITAL MARKETS
Kenya has the largest
Securities Exchange in
East and Central Africa.
The NSE index market
capitalisation for example
increased by 314% from
Kshs 112 Billion in 2002 to
Kshs 792 Billion in 2006.
The three East African
Securities Exchanges,
namely the Nairobi Stock
Exchange (NSE), Uganda
Securities Exchange (USE)
and Dar es Salaam Stock
Exchange (DSE) have
established a working
relationship among them in
the spirit of integrating and
developing capital markets
in the East African
Community (EAC). The
exchanges operate under
the umbrella of the East
African Securities
Exchanges Association
(EASEA).
NOBEL PRIZE WINNER
Wangari Maathai receiving her Nobel
Prize from Ole Danbolt Mjøs,
Chairman of the Norwegian Nobel
Committee, 10 December 2004
Home to the first
African woman
Nobel Prize
Laureate, Prof
Wangari
Maathai.
TOURISM
Origin of Safari and the most preferred tourist
destination in Africa. The wild beest of masaai
mara migration is now one of the 7th wonders of
the world.
NATIONAL HERITAGE AND
PRIDE
Enjoys cultural mosaic and linguistic
tapestry based on ethnic diversity
SPORTS
Home to Olympic
medalists and
perennial winners
of Boston, Chicago
and Los Angeles
marathon.
ECONOMIC BACKGROUND
Achievements by the Government under
Economic Recovery Strategy (ERS)
Years: 2003-2007
Since 2003 the Government developed the ERS as a
strategy aimed at revitalizing economic growth, wealth and
employment creation based on three pillars of promoting
economic growth, reducing poverty, and good
governance. The focus has been macroeconomic stability,
financial sector development, infrastructure development
through private sector participation and revitalization of
agriculture, trade, tourism and the manufacturing sectors.
Economic Growth
Growth Rates
7
6
5
4
3
2
1
0
2002 2003 2004 2005 2006 2007
Since 2002 the GDP
growth rate has
maintained a steady
growth rate expanding
from only 0.5% in
2002 to a high of 6.4%
GDP in 2006 and 7.1% in
2007. Despite the
2007 election
stalemate and other
global factors the
economy grew by
3.5% in 2008.
ACHIEVEMENTS
 Structural reforms at
the Kenya Revenue
Authority has resulted
in revenue collection
growth of an average
of 10% and above
20% of GDP per year
thus
enabling
the
government to fund
95% of the national
budget.
ACHIEVEMENTS
Education
 Since 2003 the
Government
implemented
universal Free
Primary school
education and
also from
January 2008
free tuition in
secondary
schools was
introduced.
ACHIEVEMENTS
 Tourism Growth by
over 1.6 Million
Visitors from Yr
2006 with earnings
increasing to over 1
Billion US Dollars.
International arrivals
hit over 1.6 million
in 2007 with US
surpassing
Germany in terms of
arrivals and second
after UK.
ACHIEVEMENTS
Nairobi Stock Exchange
 Capitalisation of the Nairobi Stock Exchange has grown
tremendously. The successful conclusion IPO’s especially
for state owned corporations such as Safaricom and Telkom
that were fairly oversubscribed is an indication of the
vibrancy of the market.
ACHIEVEMENTS
 The
government
has embarked on a
major overhaul and
reconstruction
of
roads across the
country to facilitate
trade
and
investment
and
also reduce the
cost
of
doing
business.
Road network
CHALLENGES
Achieving MDG’s e.g complete
elimination of poverty and hunger
Unemployment for the youth
Infrastructure constraints e.g ports,
roads and airports
Huge deficit in energy production ETC
VISION 2030
Overarching vision
Vi
si
on
Strateg
y
Strategy
Master Plan
Plans and
implement
ation
Implementation
A globally competitive and prosperous nation
with a high quality of life by 2030
Economic
Social
Political
To maintain a
sustained
economic
growth of 10%
p.a over the
next 25 years
A just and
cohesive society
enjoying equitable
social
development in a
clean and secure
environment
An issue-based,
people-centered,
result-oriented,
and accountable
democratic
political system
INVESTMENT OPPORTUNITIES
UNDER VISION 2030
SIX KEY SECTORS
(GROWTH DRIVERS)
Tourism
Increasing Value in Agriculture
Better & More Inclusive Wholesale
and Retail Trade Sector
Manufacturing for the Regional
Market
Business Process Offshoring (BPO)
Financial Services
FLAGSHIP PROJECTS
TOURISM
 3 Resort Cities: Coast, South Coast, Isiolo
AGRICULTURE
 Improving value gained in the production & supply chain through
branding Kenyan farm products
 Tana River Basin Agricultural Development Scheme
WHOLESALE & RETAIL
 Creation of at Least 10 Wholesale Hubs and 1,000-1,1500 Produce
Business Groups (Maragua, Central Province)
 Building at Least 10 “Tier 1” Retail Markets (Athi River)
 Building free trade port at the coast to “Bring Dubai to Kenya”
servicing Eastern and Central Africa
FLAGSHIP PROJECTS
MANUFACTURING FOR THE REGIONAL MARKET
 Development of Strategy for Establishment of 2 special “economic
clusters” related to industries located together
 Development and creation of 5 Small and Medium Enterprise
(SME) Industrial Parks
BUSINESS PROCESS OFFSHORING (BPO)
 To design and establish 1 major BPO Park in Nairobi that will have
world class infrastructure developed by top international IT
suppliers
FINANCIAL SERVICES
 Facilitate the transformation of the banking sector to bring in fewer
stronger, larger scale banks
 Implement legal and institutional reforms required for a regional
finance centre
TAX AND INVESTMENT
INCENTIVES
TAX INCENTIVES AVAILABLE IN KENYA





Tax incentives are mainly in place to promote investment or
exports. Major tax incentives available include:
Investment Deduction Allowances (IDA): introduced in
1991 to encourage new investment,
Industrial Building Allowance: granted on cost of
construction of buildings used for manufacturing purposes
and also hotel premises,
Capital Expenditure on agricultural land: targeted at
farmers who incur capital expenditure in the course of their
operations
Mining deduction allowance: granted to businessmen
involved in mining,
Import duty set off: allows import duty paid on import of
capital equipment to be set off against income tax payable
TAX INCENTIVES AVAILABLE IN KENYA
 Export
Processing
Zones: allow for duty
and
VAT
free
importation of inputs
for
production
of
export products within
specified
zones.
Incentives include 10
year
tax
holiday,
exemptions
from
stamp duty,
non
liability on income tax
for
non
resident
employees, etc,
TAX INCENTIVES
 Manufacture under
bond: also allow for
duty and VAT free
importation but require
that corporation tax be
paid,
 Tax
Remissions
Export Office: TREO
primarily involves VAT
refunds since duty on
most of their inputs is
already at 0%
IVESTMENT PROCEDURES AND
GUARANTEES TO INVESTORS
One Stop Shop – Kenya Investment
Authority
Registration of the business
Submit applications for approval by the Kenya
Investment Authority.
Private/Public Partnership (PPP) in place
Kenya is a member of MIGA (Multilateral
Guarantee Agency) an affiliate of World Bank
and guarantees against non-commercial
risks.
SECTOR SPECIFIC
OPPORTUNITIES
AGRICULTURE
 Largest sector of the economytea, coffee, sugar, horticulture,
meat, dairy products etc:
 25% of GDP
TEA
Kenya
is
a
leading producer
of tea of which
95% of it is
exported in bulk.
Egypt
is
the
leading
export
destination
for
Kenya
tea
in
volume
terms
followed
by
Pakistan,
UK,
Afghanistan and
Sudan. Potential
exists in value
addition/processi
ng.
AGRICULTURE
COFFEE
Kenya is a producer of
some of the best types of
quality Coffee in the world.
Coffee is important in the
Kenyan economy due to its
contribution
to
foreign
exchange earnings, farm
incomes, employment and
food security to smallholder
coffee farmers belonging to
co-operative societies, who
are about 700,000 in
numbers.
AGRICULTURE
Kenyan Flowers
 The flower industry has
maintained an average growth
of 20 per cent per annum.
This has seen Kenya emerge
as the largest supplier to the
European Union, representing
31 per cent of their imports.
The major market for Kenyan
flowers is Holland with 69
per cent of all the Kenyan
flower
exports.
Other
destinations
include
UK
accounting for about 19 per
cent and Germany 6 per cent,
among others.
AGRICULTURE - Investment
Opportunities
Agriculture and Agro-processing
Adding value to: Tea, coffee, cotton,
pyrethrum, and horticultural products.
Livestock products: processing of meat and
dairy products.
Developing niche products and markets e.g.
beef concentrates.
Irrigation projects: potential in arid and semi
arid areas
Provision of agricultural extension services.
MANUFACTURING
Developing high-tech industries
Agro-processing
Manufacture of textiles, garments and apparels
Domestic and industrial products
Fast moving consumer goods
Electronic & electrical goods
Car assembly, among others
Manufacture of products to serve the regional
market.
Petroleum products e.g. construction of more
refineries.
KNOWLEDGE BASED
INDUSTRIES
Research & development
Biotechnology
Science & Industrial parks
Information Technology enabled
services
Assembly lines
INFRASTRUCTURE AND
UTILITIES
Energy
Geothermal & coal powered electricity generation
plants
Solar Energy Plants and Wind Energy Generation
LPG handling storage and bottling facility
Storage, distribution and product handling facility
Regional Electricity Distribution
Kenya-Uganda and regional pipeline extension
Construction of refinery
Exploration and production
Transmission lines
INFRASTRUCTURE AND
UTILITIES
Road Infrastructure
BOO and BOT or concession.
Ports
Privatization and development of ports
Rehabilitation of inland port facilities
Telecommunications
ICT
The
government
is
constructing
an undersea
Fibre Optic
Cable from
Mombasa to
Fujaira to
provide
cheap
international
broadband
connectivity.
INFORMATION AND
COMMUNICATION
Back office operations and call centers
Software development and consultancy
Internet services
Hardware assembly and repairs
Privatization of telecommunication
providers
Provision of ICT training for growing
market
Development of broad band Infrastructure
Investment in digital radio and television
HOUSING
Demand for
housing stands
at about
200,000 unit
against the
supply of about
35,000 units per
year especially
for middle and
lower income
groups.
MINING
Precious metals: gold, silver.
Metallic minerals: titanium and iron ore.
Industrial minerals: Vermiculite, Limestone,
Carbon dioxide, Zircon, Soda ash, Common
salt, Fluorspar and Gypsum, among others
Building materials: Volcanic rocks and Tuffs,
granite for dimension stone and silica sand.
Gemstones: Ruby, garnet, sapphire and
tourmaline.
Potential for energy minerals: coal and oil.
TOURISM
Film making
Recreation and entertainment facilities
Safaris
Conference tourism
Cultural tourism
Cruise ship tourism (ocean and lake)
Eco-tourism
Tourists Hotels
Game lodges
TOURISM
Fastest
growing
sector
of
the
economy. Earnings
at$0.5billion in 1st
half of 2007.A 25%
increase
over
similar period last
year.
INVESTMENT IN HOTELS – TO
INCREASE BED CAPACITY WHICH IS
FAIRLY INADQUATE AT 40,000
CONFERENCE TOURISM
Huge potential for expansion- (KICC)
INTERNATIONAL COMPANIES DOING
BUSINESS IN KENYA
Barclays Bank
Shell
Nation Media Group
British American Tobacco
END & THANK YOU
EMBASSY OF THE REPUBLIC OF
KENYA
2249 R STREET, WASHINGTON, DC
2008, USA. TEL- 202-387-6101
EMAIL:
[email protected]