How Kenya drives business reforms to woo investors
Those who intend to invest in Kenya can now get their business registered within 24 hours. It is also a bonus that they are able to file taxes electronically and access both regional and international markets easily. What a favorable business reforms. The country’s ease of doing business has improves considerably by a single digit from last year’s 137 to 136 this year. This is according to the 2015 Ease of Doing Business index report released lately.
The government is aiming to expand power generation capacity by 5,000 megawatts (MW) by 2017. It is adding to installed capacity of 1,664 MW in a bid to tem high cost of power. The cost of power has swollen the cost of doing business hence scaring off would-be investors.
Speaking during the Kenya International Investment Conference (KIICO) held this month at KICC, President Uhuru Kenyatta said that his government is keen to see investors provided with clean and cheap energy.
The setup standard gauge railway project that aims at getting Kenya connected to other East African states is a huge baby step towards diversifying means of transport.. Apart from lowering the cost of transport, the bulky rail transport is industrial friendly as it provides direct link between industries and sources of raw materials.
The first phase of the project will cover about 610 kilometers from the port of Mombasa to Nairobi. It will cost $3.6 billion which is Sh314.2 billion at today exchange rate. 90 per cent of the financing will come from China Exim Bank. The remaining 10 per cent gap will be filled up by the Government of Kenya.
A single window system and an electronic platform that will serve as a single entry point for shippers involved in international trade. It is hoped to start to operate in October next year. The system aims at speeding up the clearance of imports at Kenyan ports. This will be a cut on trade transaction costs, delays from bureaucratic procedures, and corruption in addition to improving space use at ports.
Kenya and East African states, are championing one network in communication sector that will see calling rates lowered. The initiative is good news especially for entrepreneurs in the region who have for a long time been affected by high cross border calling rates. The high cost of calling rate has limits their communication window which is a key aspect in the business space. The talk on one network comes barely a few months after successful launch of the East Africa Payment System (EAPS). The system has seen the cost of money transfer within East Africa lowered. The platform offers a secure and cheap money transfer mode especially for huge investors in the region.
Other reforms initiated by the government in a bid to woo international investors include opening of capital markets for foreign participant, abolishing of exchange controls, freeing of the Kenya shilling exchange rate to be market driven and removing price controls. The President has promised, his government’s commitment to signing a double taxation agreement that aims at exempting foreign investors from harsh tax regime. The decentralized form of governance also point investors to economic resources in all parts of the country.
In spite of all these measures, Kenya’s economic performance and level of global competitiveness remains low compared to global benchmarks. According to the World Economic Forum’s Global Competitiveness Report 2012-2013, Kenya is ranked 106 out of the 144 countries evaluated. It is an indication of a relatively steady performance when compared to last year’s ranking of 106 out of 139 countries ranked. It is perhaps on this back drop that KIICO is assembling both local and international economic players to setting friendly investment windows in the country to reap from huge investment interests in Africa by International companies.
The President has assured investors of their security and the government’s commitment to create free business environment.