Kenya courts technology to woo investors
By Omondi Julius Odera, Kampala, Uganda
Kenya, East Africa’s lead economic hub, has taken a notch higher its efforts to woo investors through its rigorous incorporation and adaptation of technology to ease business transactions.
As a result, investors in Kenya can now take only a day to register their business, file taxes electronically and access both regional and international markets easily, thanks to favorable business reforms and policies championed by public private initiatives.
These and other factors have seen the country’s ease of doing business improve slightly by a single digit from last year’s 137 to 136 this year, according to the 2015 Ease of Doing Business index report released recently. The government aims to expand power generation capacity by 5,000 megawatts (MW) by 2017, adding to installed capacity of 1,664 MW in a bid to tame high cost of power that has inflated the cost of doing business hence scaring off potential investors.
Speaking during the Kenya International Investment Conference (KIICO) held on Wednesday 18th November at KICC, President Uhuru Kenyatta said that his government is keen to provide investors with clean and cheap energy as well as adapting technology to ease business transactions.
A single window system, an electronic platform that serve as a single entry point for shippers involved in international trade, also started to operate in October. The system aims at speeding up the clearance of imports at Kenyan ports hence cutting on trade transaction costs, delays from bureaucratic procedures, corruption in addition to improving space utilization at ports.
Kenya, together with other East African states, is 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 that limit their communication window, 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) that has seen the cost of money transfer within East Africa lowered. This 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 participation, abolishment of exchange controls, freeing of the Kenya shilling exchange rate to be market driven and removal of price controls. The President promised the government’s commitment 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 every part of the country.
In spite of all these measures, Kenya’s economic performance and level of global competitiveness remains low relative 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, 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 showcase friendly investment windows in the country in a bid to reap from huge investment interests in Africa by international companies.