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China-backed rail project ‘set to spur investment in Kenya’

Kenya's business environment is “set to change radically” with the expected launch of the first phase of the Chinese-funded standard gauge railway in June, according to the head of Kenya’s investment agency.21 Apr 2017

CEO of Ken-Invest, Moses Ikiara, told China’s state Xinhua News Agency that the rail project, and the opening of the first berth at the second Kenyan port of Lamu in 2018, will burnish Kenya’s investment credentials.

In addition, Ikiara said Kenya was “gearing up for the arrival of mega-investors, including an auto company [which he did not name] that hopes to set up an operating hub in Nairobi”.

Ikiara told Xinhua that, with the first berth at Lamu ready for use in 2018, Kenya’s government was still working towards a preferential arrangement for large investors seeking to use Kenya as a regional manufacturing hub. Meanwhile, Ken-Invest is “under pressure to improve services”, Xinhua said.

Kenya’s government has promised to establish a “one stop shop” for investment in the country by the end of April 2017, Ikiara said.

“We are discussing a range of issues to improve our investment climate,” Ikiara said. “We are contemplating reducing the minimum capital requirement for local investors. This will encourage more local investors to come on board.”

Meanwhile, Ikiara said Kenya plans to increase the level of private investment in relation to gross domestic product (GDP) to 24 percent in 2020 and to 32 percent by 2030. The government also hopes to increase the level of manufactured products locally to 20 percent of GDP, Xinhua said.

“We want market entry to be easy and transparent,” Ikiara said. “We are working on good logic and a series of incentives which would be based on conditions being met by foreign investors, such as bigger tax incentives to foreign investors with bigger local investment partners.”

In addition, Ikiara said Kenya “is progressing with efforts to implement its grand vision of setting up special economic zones”.

According to Xinhua, Kenya’s government is soon expected to announce the appointment of a chief executive officer of special economic zones “to help advance manufacturing”.

In 2015, China and Kenya agreed to extend their ‘industrialisation partnership’ with a new focus on technology transfer and more Chinese involvement in infrastructure development. The agreement came as China’s foreign minister Wang Yi visited Kenya’s capital Nairobi as part of a tour of African nations aimed at bolstering commercial ties with the region.

Kenya's Nairobi Securities Exchange (NSE) is planning to woo investors from China to deepen the African nation's capital market, the head of the bourse said recently.

NSE chief executive officer Geoffrey Odundo said the bourse is preparing to hold a series of "roadshows" in China "so that we create awareness of the NSE".

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