Invest in Kenya

Why Invest in Kenya

  • Kenya is the land of unlimited possibilities. It is ranked the 4th largest economy in Sub-Saharan Africa with a GDP of USD 60 billion.
  • The World Economic Forum’s country competitiveness report ranks Kenya number one (1) in Africa in quality of human capital and availability of research and innovation.
  • Kenya has one of the highest rate of internet access in the continent, with 72% (approximately 32 Million) of its population having internet access making it ideal for investment on internet driven and knowledge economy.
  • Kenya has the second largest population within the EAC at 44.2 million and is growing at a rate of 2.7% per annum. The country has a rising middle class with increasing urbanization, which contributes to an increase in consumer demand for high-value goods and services. This trend is forecasted to continue, with 50% of the population expected to live in urban areas by 2050. The country’s income per capita has also increased at a Compound Annual Growth Rate (CAGR) of 2 % over the past ten years.
  • Kenya is the dominant economy in the East Africa Community (EAC), contributing approximately 50% of the region’s GDP. Furthermore, Kenya is centrally located within the EAC and provides investors access to a wider consumer market of up to 400m people in the EAC/COMESA region.
  • Kenya’s investment climate is the strongest in the EAC, with Foreign Director Investment (FDI) flowing in from emerging and developed markets and a high number of multinational companies with regional and continent-wide presence. Having their headquarters in the country.
  • Kenya is firmly interconnected through a network of roads, railways, ports, airports, waterways, and telecommunications. For example, Kenya‘s Jomo Kenyatta International Airport and Mombasa port are the second busiest in Africa.
  • Kenya is a member of trade arrangements and a beneficiary of trade promotion schemes that include Africa Growth and Opportunity Act (AGOA), World Trade Organization, and EAC-EU Trade Agreement. It is also a member of East Africa Community (EAC), Common Market for Eastern and Southern Africa (COMESA) & Southern Africa Development Cooperation (SADC) regional bloc that will soon be a Tripartite Free Trade Area (FTA) cooperation creating a potential market of over 600million people.
  • Kenya‘s Financial Sector development continues its economic growth through mobilization of large savings to finance investment needs. In the 2015/16 World Economic Forum Global Report, Kenya ranked number 42 in the world out of 140 countries for financial market development. In 2015, the country was ranked 1st in the world for leveraging technology to drive inclusion by Brookings Financial and Digital Inclusion project (FDIP).
  • Kenya has an extensive and relatively well-developed banking industry serving the domestic, regional and international markets. There are 44 banks registered in Kenya. They include global names such as Barclays, Citi Bank, and Standard Chartered Bank. Kenya is currently ranked 28 out of 151 countries in ease of accessing credit in the World Bank Ease of Doing Business Reports 2016.
  • Kenya has the most developed stock market in the Eastern and Central African region,i.e., the Nairobi Stock Exchange (NSE) with a market capitalization of about Ksh. 1.992 trillion(approximately USD 19.48 billion).
  • Kenya is a position to improve its power generation capacity through a focus on geothermal energy and other green energy and cost-effective energy sources. The Country’s Second Medium Term Plan (2013-2017) has targeted generation of 5,000+MW. To date, 615MW of power have been added to the national grid and has significantly reduced the cost of power. An additional 300MW of the power of wind is expected to be added to the national grid in the next one year with the ongoing works at Lake Turkana wind project. These resources are expected to increase our clean energy mix cementing Kenya’s position as world leader in renewable energy. These, and other ongoing power projects, will ensure adequate power supplies and significantly reduce the cost of doing business.

Investment Opportunities

Kenya has a wide range of sectors with ready to be accessed investment opportunities. The various sectors available are :

  1. Agriculture
    The Agriculture Sector is the mainstay of the economy. As of 2013, the sector contributes 25% to GDP directly, forms 65% of Kenya’s total exports and provides 18% of formal employment.
    Agricultural sector is not only the driver of Kenya’s economy but also the means of livelihood for the majority of Kenyan people. The sector comprises of crop production (industrial & food crops), horticulture, livestock, fisheries and forestry. Production of crops and horticulture contributes 76.5% of Agriculture GDP followed by livestock production at 4.9%.
    Fishing and forestry contribute 0.5% and 0.7% of the total agriculture GDP respectively. Kenya’s Agricultural exports are classified into traditional (tea and coffee) and non-traditional exports (horticulture – which increased to 213.8 thousand tonnes in 2013 from 205.7 thousand tonnes in 2012).
    There are joint venture opportunities for foreign investors seeking local counterparts, Sugar and Cotton processing factories have been earmarked by the government for privatization. Others include export-oriented agri-business, horticulture and processing of oil crops and investment in large scale irrigation schemes.
  2. Manufacturing
    This sector is mainly agro based at the moment and plays an important role in adding value to agricultural output by providing forward and backward linkages with agricultural sector. However, there is a shift to export oriented manufacturing as the main thrust of Kenya’s industrial policy since the country aims to raise the share of products in the regional market from 7% to 15 % and develop niche products for existing and new markets.
    Kenya is promoting development of Special Economic Zones (SEZs), Industrial Parks, Industrial Clusters, promotion of small and medium scale manufacturing firms, development of niche products, commercialization of research and development results.
    In addition to high demand for locally manufactured goods, regional markets are accessible for Kenya’s manufactured goods owing to its membership to two key regional economic blocs the East African Community (EAC) and Common Market for East and Southern Africa (COMESA). Furthermore, Kenya is one of the first Sub Saharan countries eligible to export its textile products to the USA under the provisions of the African Growth Opportunity Act (AGOA).
    Investment opportunities exist for direct and joint-venture investments in iron and steel industries, manufacture of fertilizer, agro-processing, machine tools and machinery, motor vehicle assembly and manufacture of spare parts agro-processing, manufacture of garments, assembly of automotive components and electronics, manufacture of plastics, paper, chemicals, pharmaceuticals, metal and engineering products for both domestic and export markets.
  3. Tourism
    Tourism is one of Kenya’s leading foreign exchange earner and third largest contributor to the GDP after agriculture and manufacturing. The sector has been growing fast as a result of various factors such as liberalization, diversification of tourist markets and continued Government support and commitment to providing an enabling environment, coupled with successful tourism promotion and political stability.
    Investors can take advantage of Kenya’s endowment of unique and combination of tourist attractions such as beautiful coastal beaches, coral reefs, caves and river deltas, abundant wildlife including the ‘big five’ in their natural habitats, national parks and game reserves, good climate, beautiful geographical landscapes, savannah grasslands, forests, salt and fresh water lakes. Others include hot springs, mountains, botany and zoology, world heritage sites, and rich cultural history.
    Out of the 26 Parks and Game Reserves in Kenya, only 7 parks including Masaai Mara, Nakuru and Amboseli are fully operational accounting for more than 80% of the total number of visitors. This presents an opportunity to develop and add value to the other parks with modern facilities and infrastructure.
    Investors can also take advantage of several strategies and programmes that have been earmarked by the government to attract investments into the industry such as establishment of three resort cities, branding of premium parks, development of high value niche products, development of a replica of Kenya Utalii College at the Coast, and building of new high- end international hotels chains among others.
  4. Infrastructure Development
    The 47 counties in Kenya have given rise to increased demand for housing facilities. Each county is now developing its own structures, hotels and residential quarters to cater for its increasing Population. Lots of opportunity also exist in the development of industrial parks in Kenya. Investor can also participate in major infrastructure projects such as Road construction and rehabilitation; Development of the Ksh 2 trillion Lamu Port and associated infrastructure within the Lamu Port – South Sudan – Ethiopia Transport corridor Project (LAPSSET), Rehabilitation of airports; Construction of power generation plants, construction of the proposed multi-billion shilling Konza ICT Park and construction of resort cities in Isiolo, Lamu, Diani, Kilifi and Lokichoggio towns
  5. Money, Banking & Finance
    Kenyan financial sector comprises of Banking, Insurance, Capital markets, Pension Schemes and Quasi-banking institutions such as: Savings and Credit Cooperative Societies (SACCOs); Microfinance Institutions (MFIs); Building Societies, Kenya Post Office Savings Bank (KPOSB); Development Finance Institutions; (DFIs) and informal financial services such as Rotating Savings and Credit Associations (ROSCAs). Financial intermediation in Kenya has continued to recorded high growth rates due to increased lending as reflected by the rise in domestic credit backed by significant financial innovation.
    The more than 40 banks in the banking sector is dominated by five large banks which account for the bulk of deposits. The remaining banks are small and have limited outreach. This has reduced competition and resulted in high cost of credit. Further given the low penetration of the formal financial services, investing in Microfinance institutions, banks and SACCO’s would have a considerable potential to address the large remaining demand for financial services by the large section of population that is unbanked.
    Kenya is under-insured with penetration level of about 1 % of GDP. This signifies the necessity of having an insurance sector that can add more to the economic development of the country therefore a huge potential for the insurance business in Kenya.
  6. Energy
    In Kenya, energy is identified as one of the infrastructural enablers of the three pillars of Vision 2030, with an expected surge in energy use within the commercial sector on the road to 2030. As a result, the government has identified the need for generation of additional energy and efficiency in energy consumption as priorities in Vision 2030. Investment opportunities exist in provision of solar energy, Wind Energy, generation of Geothermal power, Hydroelectric generation, Development of diesel plants etc. The discovery of oil in Turkana County and coal deposits in Mui Basin, in Mwingi East, Mwingi Central and Mutitu Districts provides more opportunities in meeting Kenya’s energy needs.
  7. Information & Communications Technology
    The information Communication Technology sector is expanding every day in Kenya. Investors can tap on the growing population to provide communication outlets and modern technology such as mobile phone services. Provision of Internet connectivity will enhance economic growth in Kenya. The size of the local ICT market is estimated at US$ 500 million. Contraction and operationalization of Konza ICT hub avails enormous investment opportunity.
    We are home a large number of highly educated and innovative talent – We are known for innovation as demonstrated by the all very well-known M-Pesa Software for some of the best banks in the world. All the above factors coupled with the friendly business environment and an innovative culture have made Kenya a premier outsourcing destination. Kenya is also host to regional offices for the world’s biggest technology companies including Microsoft, Google, Cisco, Oracle, IBM and SAP.