INVESTMENT OPPORTUNITIES AVAILABLE IN KENYA
Kenya has a wide range of sectors with ready to be accessed investment opportunities. The various sectors available are :
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.
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.
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.
- 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
- 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.
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.
- 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.