Kenya embarked on a comprehensive program of economic reforms designed to deregulate the economy and put it on the path of rapid employment generating growth.
Sustained effort by the government to tighten fiscal and monetary policies since mid 1993 has been effective in stabilizing the economy and contributing to the revival of economic growth. Annual inflation has been contained to a single digit. Tight control on the budget has been accompanied by tax reforms aimed at reducing the tax rates and broadening the tax base.
The government has since mid-1993 made significant strides. It has eliminated exchange controls including restrictions on inward portfolio investments and removed all trade restrictions, except for a short list of a few products controlled for health, security and environmental reasons.
Stable macro-economic conditions, liberalized markets, and more operations of the strategic public enterprises are expected to enhance the level and the efficiency of private investment, and result in increased income and job creation.
Trade & Investment
The government encourages investment and the Kenyan economy remains open to foreign investors. There are no restrictions on foreign investment, foreign ownership, and repatriation of profits or capital.
Investment in the Export Processing Zones (EPZs) and Manufacturing Under-Bond (MUB) enjoys a 10 year tax holiday followed by 25% tax rate for the next 10 years and exempt from import duties, VAT, and Sales Tax.
Foreign ownership in listed Kenyan companies is generally restricted to 40% in the aggregate and 5% for each individual investor.
There is manufacturing – Under Bond Scheme in operation.
The Export Processing Zones Authority (EPZA) operates in 39 Zones, (37 private, 2 public).
Direction of Trade
African countries continue to be the major market for Kenya’s exports followed by EU. In 2002 the market share of total exports to African countries and EU stood at 48.9% and 28.5% respectively. Among the EU countries UK continues to be the leading market for Kenyan exports with a market share of 39.6% of exports to the region. UK was Kenya’s second leading destination for Kenyan exports after Uganda.
Investment opportunities exist in nearly all the sectors and especially in agro based industries, machinery and building materials, furniture and paper products, garments and textiles, jewelry and watch manufacture, food processing, cosmetics, pharmaceuticals, electronic goods, solar technology products; IT/Data processing, tourism, banking and financial services, housing, roads, ports, railways and energy sector.
For more information, please visit www.investmentkenya.com