9 catalysts for entering the Kenyan Market
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Kenya adopts a market-based economy that represents the largest and most advanced economy in East and Central Africa. As such, current estimates indicate that growth is projected to reach 97 billion USD, which represents a 5.8% GDP growth figure for 2019.
The country is recognised as a key logistical conduit into the East African Community’s (EAC) regional market, consisting: of Tanzania, Uganda, Rwanda, Burundi and South Sudan.
Following these pertinent developments, the following 9 presented catalytic points aim to shed more light as to why Kenya is one of the most favourable destinations for FDI within the East and Central African region, respectively.
1.Tax Treaties and Investment Promotion and Protection Agreements
Kenya is a signatory to a large and growing number of tax treaties and investment promotion and protection agreements such as the Multilateral Trade System (MTS), ACP-EU Cotonou Partnership Agreement, and the Africa Growth and Opportunities Act (AGOA).
This allows exports from Kenya to enjoy preferential access to world markets under a number of special access and duty reduction programmes.
Since independence, Kenya has maintained remarkable stability despite changes in its political system. Since the re-emergence of multiparty democracy and promulgation of a new constitution in 2011, the country has continued to attract substantial amounts of FDI.
Kenya is making efforts to lower the cost of doing business by conducting extensive business regulatory reforms intended to substantially reduce the number of licensing requirements. These vital interventions have contributed to licensing regimes being made more simple and transparent.
4.Access to a Large pool of Highly Educated and Skilled Work Force
Kenya prides itself on its large pool of highly educated, skilled and sought after workforce in Africa – trained from within the country, and from reputable internationally renowned institutions around the world.
As the leading economy in East Africa, Kenya’s strategic location and its well-developed business infrastructure make it a natural choice for investors and many international firms have made it their regional hub.
This grants investors’ access to the larger East African Community (EAC) and regional markets – with access to over 450 million consumers.
The country’s capital, Nairobi, is also a major transport hub in East Africa, with connections from Jomo Kenyatta International Airport to Major Destinations around the world. All these are coupled with a convenient Time zone of (GMT +3).
6.Highly Developed Social and Physical Infrastructure
Kenya affords a pleasant and quality standard of living with its spectacular and diverse natural resources. These impressive qualities range from wildlife and a mixture of scenic environments – that includes the world-famous Maasai Mara.
The country also boasts of high-quality social amenities such as restaurants, hospitals and entertainment spots. Hence, these impressive qualities further justify the reason as to why the country attracts a high number of expatriates.
7.Fully Liberalised Economy
Kenya fully liberalised its economy by eliminating all obstacles that previously hampered the free flow of trade and private investment. These include exchange controls, import and export licensing, as well as restrictions on remittances of profits and dividends.
8.Preferential Market Access
Kenya is a signatory to a number of multilateral and bilateral trade agreements as part of its trade policy. Kenya is a member of the World Trade Organisation (WTO), which provides the country’s products access to more than 90% of world markets – at Most Favoured Nation (MFN) treatment.
In addition, Kenya holds noteworthy memberships to key trade arrangements and beneficiary to trade-enhancing schemes that include the Africa Growth and Opportunity Act (AGOA), ACP-EU Trade Agreement and Common Market of Eastern and Southern Africa (COMESA).
9.Well Established and Vocal Private Sector
Kenya endows a robust private sector, which has been considered to be one of the most resilient in the world. This key development is further highlighted by the increased number of high-profile foreign investors entering the country.
Kenya has always been a market economy. Key players in voicing private-sector concerns include: The Kenya Private Sector Alliance (KEPSA), Federation of Kenya Employers (FKE), The Kenya Association of Manufacturers (KAM) and the Kenya National Chamber of Commerce and Industry (KNCCI).
Furthermore, the government frequently conducts regular policy dialogues with private-sector players – through various impactful stakeholder Round Tables.
Riding on progressive macroeconomic policies, and bolstered with heightened economic growth and increased FDI, Kenya presents one of the most favourable marketplaces in East and Central Africa.