baringo investments catalogue 2015

Governor’s Message

Deputy Governor’s Message

Message from the Presidency

Message from the Senator

Baringo County Government Leadership

CEC Trade and Investment

Bio - Data

Why invest in Baringo

Projects and Opportunities

Incentives

A Guide to investing in Baringo

Contacts

Invest in Kenya —- 1 to 46

A Practical Guide to Doing

Business in Kenya - 1 to 62

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Table of Contents

Why Invest in Baringo County?

As the Governor of Baringo County, and on behalf of the Baringo County Government, I am pleased to introduce this Guide to Investment Opportunities in Baringo County. Investors in Kenya should look at growing horizons of opportunities that the new political dispensation has created. Investing in large cities and the surrounding areas may provide a simple option, but investors that really want to make money and create social impact must look beyond – far into the countryside where opportunities are not only unexplored but offer much greater margins of returns on capital. Baringo County is one such area with plenty of opportunities for both large and small investors.

Located in the former Rift Valley Province of Kenya, Baringo County lies about 270km north-west of Kenya’s capital, Nairobi and covers an area of 11,015.32 sq km. With very diverse endowments within this area coupled with its location in the North Rift, Baringo is undoubtedly a strategic investor destination.

Believing firmly that Baringo is ready to do business, we recognize that the existing opportunities must be made known to potential investors. We have, in deed, embraced the UN advice to States and Counties to professionally package and disseminate relevant, useful and targeted information to put our county on the map of local and international investors. This guide starts that crucial journey for Baringo. It explains the opportunities available to the investor as well as the respective requirements and the environment – socioeconomic, cultural and political – that surrounds the investor.

I trust that that the information herein will provide the key to sound and intelligent investing. Welcome to Baringo County!

H.E. Benjamin Cheboi, EBS, Governor, Baringo County

Message from the Governor

PREFACE

2 Investments. Imagine Baringo. Kenya.

‘Investment environment in Baringo’

Organizing an event of this magnitude is not easy and it is with great pleasure and humility that I present to you the first Baringo Entrepreneurship and Expo Summit (2015) BEES in Kabarnet ASK Show grounds. This journey started in Mid 2014 and it involved a lot of consultations and in depth research on the key areas of investments in our county of great diversity. The three sectors that we zeroed onto are Agribusiness, clean energy and tourism were arrived at after mapping our resources and these offer many opportunities and other sectors of investments are hinged on this. Kenya’s energy consumption is projected to hit approximately 20,000 MW by 2030 and the population will be about 60 million.

It therefore gives a golden chance to start preparing ourselves to be among the top suppliers of geothermal, solar and biomass energy, food and processed agricultural products among other services. The development of major infrastructure like the Lappset corridor and the Standard gauge Railway and the proximity of Eldoret International Airport, tourism and hospitality industries is set to bloom.

I would therefore like to welcome you to take part in this investment summit and think of Baringo as your new frontier and home of unparalleled opportunities. Last but not least, may I thank all the people of Baringo led by H.E. Governor, Hon senator, all members of parliament, the speaker and all members of the county assembly, all partners and stakeholders for making Investments. Imagine Baringo. Kenya. a eat success . Finally, I would like to thank the event organizer Ultum Mega in a special way for conceptualizing and turning our ideas in to a reality, a dream come true.

Hon. Matthew TuitoekDeputy Governor and Chairman Steering Committee

Message from the Deputy Governor

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Message from the Presidency

H.E. Hon. William Samoei Ruto, Deputy President of the Republic of Kenya.

His Excellency, Uhuru Kenyatta C.G.H. President and Commander in Chief of The Defence Forces of The Republic of Kenya.

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The Presidency fully supports investments in the Republic of Kenya.

Message from the Senator

Imagine. Baringo County. Kenya.

Hon. Gideon Moi Senator, County of Baringo

Imagine an investment destination that offers you more than you require.

Imagine investing in a region where your return on investment is assured.

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Hon. Caroline Tenges (CEC Livestock & Fisheries)

Hon. Matthew Tuitoek (Deputy Governor)

Hon. Luka Rotich (CEC Roads & Infrastructure)

Hon. Kipchumba (CEC Trade Industralization)

Hon. Stella Kereto (County Secretary)

Hon. Lilian Sadalla (CEC Education and ICT)

Hon. Edwin Riamangura (CEC Lands Housing & Urban Devt)

Hon. Geoffrey Bartenge (County Treasury)


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Hon. Matthew Tuitoek(Deputy Governor & Chair BEES)

Hon. Kipchumba(CEC Trade Industralization

& Co-Chair BEES)

Hon. Caroline Tenges(CEC Livestock & Fisheries)

Hon. Dr. Andrew Kwonyike(CEC Environment, Natural

Resources, Energy & Mining)

Hon. Lilian Sadalla(CEC Education and ICT)

Hon. Emily Kibet(CEC Youth, Gender, Sports,

Labor & Social Security Services)

Hon. Eng. Job Tomno(CEC Water & Irrigation)

Hon. Edwin Riamangura(CEC Lands Housing & Urban Devt)

Hon. Luka Rotich(CEC Roads & Infrastructure)

Hon. Stella Kereto(County Secretary)

Hon. Geoffrey Bartenge(County Treasury)

Baringo is a scenic region. It is impressively attractive. Richly colourful and sight-fully sumptuous. An array of a spectacular wide range of international destination class products to sample.

The picturesque landscape of Baringo County is strategically positioned at the heart of the Great Rift Valley with prominent valleys while the towering Tugen hills sandwiched between the two escarpments running along the center of the county.

Baringo is thus prominent and enjoys increasing number of visitors due its high tourism potential in the county including fresh water Lake Baringo which has 13 islands and other breathtaking views, the magnificent and internationally renowned lake Bogoria with its globally acclaimed unique geysers and over 2Million flamingoes that often paint the lake’s shores bright pink; Lake Kamnorok, Africa’s second largest oxbow lake a home to white crocodiles Kapedo hot springs and Silale cave which tourism players unanimously agree to be.

one of the longest caves in the world in Tiaty Sub-county also with a huge potential in geothermal energy. Korosoi volcano which towers 1,449m above sea level is an amazing site to be hold. Rare birds such as bat hawks and the majestic Verreaux’s eagle nest in Baringo.

We boast of a rich heritage and cultural diversity, wildlife diversity, conservancies, unmatched pre- historic wealth. Baringo is most definitely a must visit investment destination in the Kenya and the world.

Hon. Kipchumba KeitanyCEC in Charge of Trade and Investment

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CEC in Charge of Trade and Investment

Imagine...

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a county that has world class Human Resource that thrives on professionalism.

a county that has a united diaspora community in all continents of the world.

a county where your investment positively transforms the lives of the local community.


Arap Segem - BEES MASCOT / AMBASADOR

The sponsors

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County Executive Members

NAME of the C.E.C.S. DEPARTMENT NAME of the CHIEF OFFICERS

1. Hon. Emily Kibet Youth,Gender, Sports, Labour & SocialSecurity services Mr. Enock Y. Kiptaiwa

2. Hon. Dr. Andrew Kwonyike Environment, Natural Resources, Energy & Mining Mr. Richard Koech (acting)

3. Hon. Kipchumba W. Keitany Industrializtion,Commerce,Tourism&Enterprise Development

Mr. Samuel KisaMr. Collins Cheruiyot

4. Hon. Luka C. Rotich Transport and Infrastructure Mr. Daniel K. Sacho

5. Hon. Job Kibei Tomno Water and Irrigation Ms. Christine Rono

6. Hon. Edwin M. Riamang’ura Lands ,Housing & Urban Development Ms. Dorcas Kandie

7. Hon. Caroline Tenges Agriculture, Livestock & Fisheries Development

1. Julius Mwoliot(Agricult)2. Dr. Gideon Toromo(livestock &

Fisheries)8. Hon. Moses Atuka Health services Mr. Festus Kuniya

9. Hon. Lillian J. Sadalla Education and ICT Mr. Joseph Waiharo

10. Hon. Geoffrey Bartenge Finance and Economic Planning Mr. Richard Koech

11. Hon. Stella Kereto County Secretary

COUNTY PUBLIC SERVICE BOARD

1. Mr. Mark Suge Chairman

2. Mr. Nicholas Chepkoiwa Secretary and C.E.O.

3. Mr. Luka Ketter Member

4. Dr. Peter Moindi Member

5. Mrs. Grace J. Chelagat Member

6. Mrs. Rebecca Lomong’ Member

7. Mr. Christopher Lenongonop Member

OFFICE OF THE SUB-COUNTY & TOWN ADMINISTRATORS

1. Mr. Daudi Aengwo Baringo North

2. Mr. Julius Bolei Baringo Central

3. Mr. William Chelal Baringo South

4. Mr. Anthony Tanui Eldama Ravine

5. Ms. Dorcas Kibet Mogotio

6. Mr. Moses Akeno Tiaty

7. Mr. Sammy Kibor Town Administator Eldama Ravine

8. Mr. Michael Rotich Town Administator Kabarnet

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H.E. Benjamin Cheboi, EBS,Governor, Baringo County

Hon. Matthew TuitoekDeputy Governor and Chairman Steering Committee

SENATOR MEMBERS OF PARLIAMENT

Hon. Gideon Moi

• Hon. County MP(women) Grace Kiptui

• Hon Grace Kipchoim –Baringo South Constituency

• Hon. Hellen T. Sambilli-Mogotio Constituency

• Hon. Moses Lessonet –Eldama Ravine Constituency

• Hon. Asman Kamama-Tiaty constituency

• Hon. William Cheptumo-Baringo North

• Hon. Sammy Mwaita-Baringo Central

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Elected MCAs and WardsHon. William Kassait Kamket: Speaker

S/NO NAME WARD

1. Hon. Nelson Lotela Jackwan Silale

2. Hon.Daniel Tuwit Loreria Ribkwo

3. Hon. Peter P. Amasile Tangulbei /Korosi

4. Hon. Stephen Maklap Tirioko

5. Hon. Makal S. Loluka Loiwat/Kolowa

6. Hon.Cheretei F. Kibet Loiyamorock

7. Hon.Thomas L. Minito Churo/Amaya

8. Hon.Joseph Makilap Barwesa

9. Hon.Richard Kambala Saimo/Soi

10. Hon. Reuben C. Chepsongol Bartabwa

11. Hon. James Cheptoo Kabartonjo

12. Hon. Vincent Kirior Saimo/Kipsaraman

13. Hon. Johana Chebon Kabarnet

14. Hon. Zakariah Chepkuto Sacho

15. Hon. Hon. Solomon Cheptai Tenges

16. Hon.Richard Kitilit Ewalel/Chapchap

17. Hon. Solomon Chemjor Kapropita

18. Hon. Isaiah C. Kibowen Marigat

19. Hon. Wesley Lekakimon Ilchamus LEADER of Minority

20. Hon. Jackson T. Kaberegei Mochongoi

21. Hon. Renson Perkei Mukutani

22. Hon. Elijah Toroitich Mogotio LEADER of MAJORITY

23. Hon. Geoffrey Chelal Emining

24. Hon. Jacob Cheboiwo Kisanana

25. Hon. John Mutai Kibet Mosop

26. Hon.Cyrus Kibii Kiprotich Lembus Kwen

27. Hon. Douglas Kiplimo Ravine DEPUTY SPEAKER

28. Hon. Peter Kagathi Maji mazuri

29. Hon. Kibiwot Munge Lembus/Perkerra

30. Hon. Benard Borus Koibatek

NOMINATED MCAS

1. Hon. Beatrice J. Changwony

2. Hon. Cynthia J. Kiptui

3. Hon. Emmy Buttuk

4. Hon. Eunice Achua Karani

5. Hon. Jennifer N. Kopiri

6. Hon. Jennifer Kabon Kiptoo

7. Hon. Judy Yator

8. Hon. Juliana S. Letangule

9. Hon. Julius Lekosek

10. Hon. Linah Sote Chebet

11. Hon. Lucy Ng’etich

12. Hon.Lydia C. Francis

13. Hon. Magdalene Chebet

14. Hon. Purity Tallam

15. Hon. Risper Kimaiyo

16. Hon. Safina J. Jepkorir

17. Hon. Valentine Sergon

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Imagine...

FORWARD


a county that has world class Human Resource that thrives on professionalism.

a county that has a united diaspora community in all continents of the world.

a county where your investment positively transforms the lives of the local community.


The sponsors

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Important Partners of Baringo County

KENYA BIO-DATA

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Kenya at a glance

PARAMETER KENYA

Surface Area (Inc. Water) 580,367 Sq Km

Population 43.0 Million (2014)

Official Language English & Kiswahili

Total GDP Usd 58.1 Billion (2014)

Average GDP Per Capita Usd 1418.7 (2014)

Average Annual GDP Growth 5.3%

Total Exports Volume Usd 6.1 Billion (2014)

Total Imports Volume Usd 18.4 Billion (2014)

Average Annual Consumer Price Index 125 (0.2)

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About Baringo!!Baringo covers an area of 11,015.3 KM2 of which 165 KM2 is covered by surface water .It constitutes 6 constituencies namely: Baringo Central, Tiaty, Baringo East, Eldama Ravine, Baringo East and Mogotio. The administrative

capital of the county is Kabarnet Town.It borders seven counties. These are Elgeyo Marakwet to the west, Samburu o the north, Laikipia to the east, Nakuru to the South East,Uasin Gishu to the west and Kericho to the South West.

Baringo County LeadershipThe County Governor is Benjamin Cheboi and is deputized by Engineer Mathew Tuitoek. The Senator is Gideon Moi, the County Commissioner is Mr. Benard Leparamarai while the County Women is Grace Kiptui.The County has 30 elected and 18 nominated Members of County Assembly. The Speaker is Hon. William Kamket .

The PeopleThe population size of Baringo County is 555,561, consisting of 279,081 males and 276,480 females .It has a population density of 50 people per km2.The population growth rate is 2.6% (2009Census).

Climate and WeatherIt has a moderate climate with temperatures ranging from a minimum of 10 °C to a maximum of 35.0 °C in different parts. Rainfall varies from 1,000 to 1,500mm in the highlands to 600mm per annum in the lowlands. Baringo experiences two rainy seasons; March to June (long rains) and November (short rains).

Economic ActivitiesThe main economic activity is agriculture In the highlands. In the lowlands livestock keeping is carried out to supplement crops farming. Because of the many tourist attractions located within the county, tourism is a major income generating activity in Baringo Bee keeping and Aloe Vera plant cultivation are the emerging economic activities in Baringo.

Places of InterestTourist attraction sites are Lake Baringo,Lake Bogoria ,Tugen HillsLake Kalmanarock and Kabarnet national museum and Kipsaraman community museum Tourist attractions in Baringo County include Lake Bogoria National Reserve, Lake Baringo, Tugen Hills and Kabarnet Museum.

Lake Bogoria National Reserve which covers 107 sq. km, is home to a huge population of wildlife including leopards, cheetahs, zebra, monkeys and the scarce kudu antelopes. The reserve has more than 350 bird species, including over 2million lesser flamingoes. Hot springs situated along the banks of Lake Bogoria are a major tourist attraction in the county.

The 144 sq. km Lake Baringo offers beautiful scenery. It has nine islands, the largest of which is called Olkokwe - covering about 1,200 hectares. The island is home to the Ilchamus community.

The lake supports 450 bird species including Paradise Flycatcher, Marabou Stocks, Hemphrick’s Hornbill and many others. Dr. Richard Leakey’s Snake Park and Lake Baringo Reptile Park, both located in the lakeshore, are major tourist attractions in Lake Baringo.

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Tugen Hills offer beautiful sceneries to the tourists, while the Kabarnet museum is a major attraction to visitors interested in learning about the Baringo history and culture.

Notable PersonalitiesSome of the famous people in Baringo County include Daniel Arap Moi and Paul Tergat.Daniel Arap Moi was the second President of Kenya from 1978 to 2002. He had served as the Vice-President of Kenya from 1967 to 1978. Mr. Moi was born at Kurieng’wo village in Baringo County. Paul Kibii Tergat is a Kenyan athlete who held the world record in the marathon from 2003 to 2007 - with a time of 2:04:55. Mr. Tergat, who lives in Ngong town near Nairobi, was born at Riwo village in Baringo.

Travelling to Baringo CountyBaringo is easily accessible by road from neighbouring towns, thanks to the county’s well maintained roads. The county is about 270km from Nairobi and 115km from Nakuru. It is accessible from Nairobi via Nakuru town. From Nakuru you can travel to Kabarnet through Eldama Ravine. You can also access Baringo from Eldoret via Kabarnet. There is an airstrip near Kabarnet town, but

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BARINGO COUNTY

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Tourism Potential The picturesque landscape of Baringo County is strategically positioned at the heart of the Great Rift Valley. Opportunities for tourism include construction and development of resorts, hotels, lodges and tented camps to take advantage of the high number of tourists visiting the region and for Meetings, Incentives, and Conferences & Exhibitions (MICE).

Several three-star tourist hotels as well as low budget resorts are setting base in the region. Investors keen on marketing the county’s potential as a tourist destination would get support, Investors eyeing Baringo would lease land, get access to water, hire local labor and get tax-friendly incentives to help them create jobs.

Energy Baringo has the potential to Generate over 3000 MW Geothermal power out of Kenya’s estimated 10,000 MW around lakes Bogoria and Baringo. Geothermal power will reduce electricity supply costs in line with the implementation of Vision 2030.

Baringo is also a site of intensive exploration of Petroleum and fossil fuels. Tullow Oil is exploring energy resources while a feasibility study for a planned cable-cars investment is underway. The deal is being jointly done by Baringo and Elgeyo Marakwet county governments. It will see private investors implement the project running from Elgeyo Marakwet to Tugen Hills. Other opportunities exits renewable Energy (solar) and Biomass.

WHY INVEST IN BARINGO

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Mineral wealth Baringo has many untapped mineral resources where investors can make profits while creating jobs for the locals. Already ruby, manganese and diatomite mineral deposits have been discovered in the county. The Geothermal Development Company is currently exploring how to harness 7,000MW of geothermal power at Silale belt. Infrastructure A modern and well maintained physical infrastructure is a key catalyst to economic growth. Baringo County has invested heavily on a good road transport network complimented by the national government. Baringo is also connected with Telecommunication and internet connectivity infrastructure. Agribusiness Value Addition There is a huge potential in value addition in Baringo. The County has good soil a favorable climate and access to markets. Opportunities exist in supply of farm inputs, large and medium scale farming (coffee, bee keeping, livestock production, aloe Vera, fruits and vegetables and floriculture), there are Farmers who plant all types of fruits sold in Nairobi, Mombasa, Nakuru and Uasin Gishu counties as well as in Kisumu. Bee farming is also at the heart of a Baringo farmer. Investors in the value addition industry can partner with farmers to process and package these products for both local and international market.

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1. Overview of the ProjectSummary /Key highlights of the project including a brief description, economic and social benefits.

The 800MW Bogoria-Silali Block Phase I is a joint steam development project whose objective is to generate steam for electricity generation. The Project is scheduled for commissioning in 2019. This Block comprises Bogoria, Baringo, Arus, Korosi, Chepchuk, Paka and Silali prospects.

Detailed surface studies estimates the Block’s potential to be about 3,000 MW. Geothermal Development Company Limited (GDC) in partnership with the private sector will undertake the development. GDC is a parastatal wholly owned by the Government and under the oversight of the Ministry of Energy. It is expected that a rate of return of about 18% will be realised with a projected payback period of about 12%. The project benefits include ;

Economic Benefits Reduced Electricity Tariffs. Currently, the country is procuring emergency power at 22 US cents per kilowatt hour. Alternative

oil based source of power cost about 16 US cents per kilowatt hour. It is projected that the cost of power from this project will be below 10 US cents per kilowatt hour therefore contributing to lowering the cost of electricity. Job Creation and Income Generation: The project will enable job creation opportunities enhancing income generation activities.

Social Benefits Increased Security: Geothermal development will enhance security in the areas as a result of the economic activities and social amenities.

Forest Conservation: Displacement of biomass fuel consumption by enhanced access to electricity will contribute to conserve forests that are also serving as water catchment areas.

2. Project Drivers Need for the project such as Market size, Volume of market components, etc. According to the LCPDP, the current growth on power demand stands at 8% and is projected to increase to over 10% upon

RENEWABLE ENERGY

800Mw Bogoria-Silali Phase I A. Project Information

PROJECTS & OPPORTUNITIES

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successful implementation of Vision 2030 initiative. The current peak power demand stands at about 1,200 MW and is projected to grow to about 19,000 MW over the next 20 years. It is planned that the increased demand will be met by 5,000 MW capacity from geothermal and the remainder from various other sources of energy including imports, nuclear, coal and hydro. The electricity sub-sector is facing challenges of; rapidly growing demand for electricity, high dependence on hydroelectric power which has become unreliable due to frequent drought, high cost of supply, low access rate (about 23%), compounded by the additional risk of climate change and high petroleum price variability.

Together, hydro and oil based thermal contribute over 80% power supply making the Kenyan system very vulnerable to oil price variations and weather changes. 3. Key Challenges These are the key cost / quality factors determining the success of the Project. (e.g. Track alignment for railways, land form for roads.) • Resourceavailability• InfrastructuraldevelopmentwhichincludesaccessroadsanddrillingwatersupplysystemsSuccessdrillingprogram

for 210 wells • TransmissionLine• PowerPlantConstruction• Financing 4. Preliminary design The project will be undertaken in four development phases outlined below;

Project Preparation Under the project preparation phase, GDC will obtain all land rights, permits and undertake expansion of the road network, drilling water reticulation system, drilling of several exploration wells to confirm presence of the resource.

Steam Development In addition, jointly with the selected partners, GDC will undertake all the remaining drilling works (appraisal, production and re-injection), feasibility study(s) and construction of the necessary steam gathering and reinjection network.

This segment of the project will be developed jointly by GDC and the selected joint steam development investors and the steam sold to competitively selected power plant operators for electricity generation. GDC plans to employ eight rigs. Power Plant Construction. The steam will be provided to eight independent power producers who will finance, build, own, operate and transfer eight power plants of 100MW each. Substation and Transmission In order to evacuate the power from the Bogoria-Silali Block, Kenya Electricity Transmission Company (KETRACO) will construct a transmission line and substation. The fields under this Block are allocated along the Rift Valley towards the northern part of Kenya. GDC plans to align its power evacuation plans with KETRACO’s in order to benefit from the transmission line planned to be built from Turkana.

The power generated is then expected to be sold to the national off taker, in this case Kenya Power & Lighting Company Limited. The power generator will enter into a Power Purchase Agreement with the Off taker.

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5. Construction Plan Timetable with timelines from project development, through tender where applicable to expected date of completion.

The project timelines are outlined below;

ITEM ACTIVITY START COMPLETION REMARKS

1 Rig Procurement Jun 2012 Dec 2014 6 Rigs GoK/GDC funded

2 Civil Infrastructure July 2013 Jun 2014 2013/2014 budget Projected

3 Drilling Jan 2014 Feb 2019 Projected

4 Feasibility Study Jun 2014 Jan 2015 Projected

5 Investor Engagement Jan 2015 Jun 2015 Projected

6 Power Plant Construction May 2017 Dec 2019 Projected

6. Cost Estimates Overall costs, component costs To sustain the pace of geothermal development at the 800 MW Bogoria-Silali Phase I Project, the Government requires;

a) Joint Steam Development –USD 800 million b) Power Plant Construction- USD 2 billion


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7. Economic Evaluation Overall EIRR, Component EIRR, PPP component income

a) In the case of Bogoria-Silali under PPP Scheme, the generation tariff is estimated at US$ 3.5 cents. b) The expected rate of return for GDC is 15% and for the EIRR is 18%. c) The Payback Period is twelve (12) years

8. Investment PlanLevel of government and reasons, Level of participation by third parties, PPP mode e.g. leasing, owning, operations and management etc

GDC’s RoleUnder this joint steam development project, GDC will obtain all land rights, permits and undertake expansion of the road network, drilling water reticulation system, drilling of serveral exploration wells to confirm presence of the resource. In addition, jointly with the selected partners, GDC will undertake all remaining drilling works (appraisal, production and re-injection), feasibility study(ies) and construction of the necessary steam gathering and re-injection network. GDCs investment will comprise a total of 20% to 40% of the required capital. GDC will also bear the risk for failed wells. After power plants commissioning, GDC will be responsible for reservoir management and the brine re-injection system.

GDC SURFACE EXPLORATION

INVESTMENTBY PRIVATE

ENTITY

INVESTMENTBY PRIVATE

ENTITY

FEASIBILITY STUDY

EXPLORATION & APPRAISALDRILLING

PRODUCTION & DEVT OF STEAM SUPPLY

CONSTRUCTION & OPERATION OF POWER PLANT

GDC

GDC

GDC

PRIVATE ENTITY

Sale of

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PPP Component

a) Joint Steam development The Investors, under a joint steam development contract, will finance between 60% and 80% of the required capital. The joint steam development is currently on offer. b) Power Generation Under power plant construction, the private sector will finance, design, construct, operate and maintain the power plants. The Investor will enter into a steam purchase agreement with GDC and a Power Purchase Agreement with Kenya Power Company Limited. The opportunity to install wellhead generation units for early power generation is also open to the private sector. The investors will recoup their investments through regular payments made from revenue generated through steam sales in a manner to be agreed upon and an agreed period. The Independent Power Producers for power plant construction have been shortlisted.

9. Institutional and legal frameworks

The institutions involved and their roles. • Geothermal Development Company Limited (GDC) will own and implement the project. GDC will enter into a steam

sales/supply contract and also sign an investment contract with the Independent Power Producers. In addition, GDC will enter into an agreement with KPLC for compensation of supplied steam and a wheeling contract with KETRACO.

• Ministry of Energy (MOE)-will offer coordination & supervisory role to all players • Energy Regulatory Commission (ERC) –will ratify the Power Purchase Agreements and the Tariff.


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• Kenya Power and Lighting Company (KPLC) -will enter into Power Purchase Agreements with IPP & offtake the power. In addition, KPLC will enter into a wheeling power contract with KETRACO and a steam compensation agreement with GDC.

• Kenya Electricity Transmission Company Ltd (KETRACO)-will construct the evacuation facilities and enter into a wheeling contract with KPLC. There will be a wheeling contract entered between GDC and KETRACO.

• Independent Power Producers (IPPs): The IPPswill enter into a steam sale agreement and an investment contract with GDC. The IPPswill also enter into a Power Purchase Agreement with KPLC and acquire a generation license from ERC.

• The Government of Kenya (through the Ministry of Finance)-will finance the project through budgetary allocations and support from development partners. It will also provide securities and facilitate guarantees.

SOLAR ENERGY Promoter : County Government of Baringo Estimated Investment : Undisclosed Private Sector Participation : PPP Location : Baringo

insolation is received throughout the year and is estimated at 4 -6 kWh/m²/day. here is high potential for investment in solar energy for sale to the national grid. Solar Arid/semi-arid Baringo has potential for 2650kW p.a. There is also potential for investment in PV panel manufacturing.

BIOMASS ENERGY Promoter : County Government of Baringo Estimated Investment : Undisclosed Private Sector Participation : PPP Location : Baringo

vast plantations(50,000 ha) of the Prosopis juliflora plant. There is opportu nity for sale to he project involves the production of energy from animal waste and plant waste from the the mini grid.

BIOGAS ENERGY Promoter : County Government of Baringo Estimated Investment : Undisclosed Private Sector Participation : Direct Investment Location : Baringo

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animal waste. Baringo has approximately 135,000 households with the average cattle per he project involves the setting up of medium scale biogas plants using abattoir and household being 6-100 cattle hence the usage for power generation.

AGRIBUSINESS

Agriculture, Livestock and FisheriesThere are great investment in the sector of Agriculture, livestock and Fisheries. This is because Baringo County has great opportunity in the valure chains. The Ministry is geared towards the achievement of its vision: To be a food secure and wealthy County anchored in vibrant, innovative and competitive agricultural sector in Fisheries, Lake Baringo, a fresh water 130KM2 provides a perfect opportunity for value addition of Tilapia Oreochromis niloticus baringoensis fish species which is endemic to Lake Baringo.

The fish species is in large quantities from the Lake and 775 fish ponds in the County there is evident opportunity in a processing plant for fish fillets and fish feeds. Livestock numbers is in the County stands at 1,770,653 and this is a great opportunity for meat and milk processing, feeds manufacture investments, livestock dairy ranching, hides and skins processing, biogas technologies and livestock insurance. There lies and opportunity for a Class A abattoir, the County has vast land, holding grounds and is on the move on creation of a livestock disease free Zone.

Honey Value chain is an untapped potential, the County produces 567,529 kg of honey annually of Ksh.113.5M value. This excludes value from wax produced from the 141,715 beehives. This calls for investment in Honey refineries, packaging and branding, small scale honey processing equipments, and formulation of pharmaceutical products using honey.

Five agro climatic conditions prevail in Baringo County presenting an opportunity for cultivation of a variety of cash crops: coffee, tea, pyrethrum, ground nuts, cotton, sisal, flowers, food crops and horticultural crops like vegetables, fruits; opportunities


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lie in Factories for Value addition and processing , Contract Farming , Provision of storage facilities (Cold stores and Silos), export Business and start of Convenient stores in major towns.

Development of an Aloe Vera Processing Facility

a) Project Information

1. Overview of the Project

Summary /Key highlights of the project including a brief description of the economic and social benefits Aloe vera in Kenya is a succulent plant species that is found only under farming, having no naturally occurring populations. The species is frequently cited as being used in herbal medicine since the beginning of the first century AD. Extracts from Aloe vera are widely used in the cosmetics and alternative medicine industries, being marketed as variously having rejuvenating, healing, or soothing properties. There are close to 200 species of aloes in the world and they range in size from as little as one inch to well over 2 feet. The species most are familiar with is the aloe barbadensis, better known as Aloe Vera (“True Aloe”). Aloe Vera is quite popular because of its medicinal qualities that have been recognized since ancient times.

The gel inside the leaf of the Aloe Vera plant is quite effect for treating burns (including sunburns), rashes and insect stings. The gel is also used in a variety of beauty products. Aloe Vera also makes a unique, easy-to-care-for houseplant. The lifting of the ban on commercialization of aloe by the government in December 2007, presented the community with an avenue to elevate poverty within the semi-arid area. The project benefits include; Economic Benefits

Job Creation and Income Generation: The project will enable job creation opportunities enhancing income generation activities.

2. Product offering Description Describe the product/service being offered including its use and technology utilised. Aloe Vera is a sub-tropical plant. This essentially means

thatthis crop will not tolerate cold climate therefore, the best parts of Kenya to plant it would be in areas like Baringo. The Aloe crop had previously been banned by the government of Kenya due to the protection of endangered product. This ban was however lifted in 2004. This has therefore led to the commercialization of the crop. The potential of Baringo County to produce the aloe stands at 10,000 tonnes annually and if the farmers are trained they would be able to increase the potential. The County already has an existing factory that had previously been funded by the European Union. The farmers in the region are already trained on the commercial growing of the aloe and will therefore have a reduced learning curve. The project therefore will require technological upgrade as well as management of the farmers as well as the facility. 3. Markets and Customers Justify the need for the project noting available market size, Volume of market components and target customers The project provides various variety of outputs which include; • Medicinal • Skin lotion • Soaps

The dynamic nature of aloe makes its marketability adaptable to various targeted audience from medical researchers, to beauty producers. The value addition of the product makes it suitable to be sold directly to supermarkets. The country has almost 27 supermarkets serving 30 per cent of Kenyans. This forms the local market.

4. Business Model How is the project planned to generate revenue. What will be the costs and expected gross margins.

On 1 acre of land has the capacity to produce 500 tonnes aloe plants which produces 336Kg of sap sacks ready for the market that are bought at Sh300 and Sh400 per kilo or Kshs 4,000 per ton It is assumed that with 500 farmers cultivating 4 acres each then the farm produces 666 tonnes

5. Competitors Who are the project competitors both direct, indirect

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(substitute) and potential competitors? The importers of already processed aloe products. Small processing companies in the market.

6. Institutional and legal frameworks

Which institutions will be involved and what are their roles?

INSTITUTION ROLE

County Government of Baringo Business permit

National Environmental Management (NEMA) Environmental Licensing

Kenya Wildlife service (KWS) License of commercial growing of Aloe

Ministry of Health Health and Safety license

Kenya Bureau of Standards Quality cerifification

VALUE ADDITION IN PYRETHRUM Promoter : Baringo County Private Sector Participation : Direct Investment Location : Baringo The project entails processing of pyrethrum to produce various products such as; Crude O.R which is used in the formulation


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of mosquito coils as well as space sprays and dusts; Superfine Pyrethrum Powder mainly used as an active ingredient in the manufacture of mosquito coils and Pyrethrum Marc which is a filler material in mosquito coils.

DEVELOPMENT OF A MACADEMIA FRUIT ROASTING AND PACKAGING FACTORY Promoter : Baringo County Private Sector Participation : To be determined Location : Baringo

This project aims to develop a roasting and packaging factory for the macademia fruit. Baringo produces high quality nuts which are free from diseases and pests attack.

ESTABLISHMENT OF A FRUIT ORCHARD Promoter : Baringo County Estimated Investment in US$ : Undisclosed Private Sector Participation : PPP Location : Baringo

Baringo county has embarked on a major affruitation project which it targets in establishing new fruit orchards of Bananas , Mangoes, Pawpaws and Avocadoes covering 7000 hectares across the County within the next three years.

RE-ESTABLISHMENT OF A WINE FACTORY Promoter : Baringo County Estimated Investment in US$ : Undisclosed Private Sector Participation : PPP Location : Baringo The project involves the reestablishment of the county’s wine factory at Marigat to process the fruits in and outside the county.

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Ground Nuts Promoter : County Government of Baringo Estimated Investment : Undisclosed Private Sector Participation : PPP Location : Baringo

Groundnuts is a major cash crop in the ASAL areas of Baringo The main areas where groundnuts are grown are in Baringo central, Baringo North, Mogotio and East Pokot. The crop has a very high potential in agro-ecological zones UM4- LM5 which covers almost 50% of the total arable land in Baringo County

OTHER OPPORTUNITIES Project : Promoter Establishment of a weaving industry : Baringo County

The County department is mandated to facilitate trade and Investments; ensure fair trade practices and consumer protection; promote investments; Industrial and Enterprise development and tourism promotion.

So far the department has engaged in various activities aimed at achieving its mandates.On tourism, the department is championing a partnership between Baringo and Elgeyo Marakwet counties for the development of a cable car facility that will exploit the scenic beauty of Kerio Valley and serve as a catalyst to drive more visitors to the region, create new jobs and diversify the local economy with substantial service components.


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TOURISM

Development of Hotels in Various Touristic Sites Promoter : County Government of Baringo Estimated Investment : Undisclosed Private Sector Participation : Direct Investments Location : Baringo County

The County is endowed with different kinds of wildlife, natural tourists’ he total estimated bed capacity of the tourist class hotels is 500. The county currently has attraction sites and diversified culture. Some of these are lakes; such as Kamnarok, hot springs & geysers at lake Bogoria; valleys such as Bosei valley and Nuregoi; Gorges located at Cheploch in Baringo and Keiyo County border and home to the African paradise flycatcher bird. All these sites are ideal for any investor to set up a hotel, a restaurant and campsites. Development of a MICE (Meetings, Incentives, Conferences, Events) Center Promoter : County Government of Baringo Estimated Investment : Undisclosed Private Sector Participation : PPP Location : Baringo

Contemporary design to ensure largescale meetings, events and conferences can be he concept entails the development of a multi-purpose Convention Center, with a facilitated in Kenya. Vision 2030 identifies conferences and business tourism as important factors in fulfilling the growth strategy. This project will seek to enhance the country’s capacity to host major events through upgrading hotel facilities and improving transport infrastructure.

Development and Maintance of Cable Car System Promoter : County Government of Baringo Estimated Investment : US$41 Million Private Sector Participation : Concession Location : Nairobi

The government has already invested in the restoration of the rails. The project will boost his project seeks a partner to develop and run the cable car system. The County tourism as well as provide expanded, safe, affordable and efficient transportation in the County. Establishment of a Film Production Facility Promoter : County Government of Baringo Estimated Investment : Undisclosed Private Sector Participation : Direct Investment Location : Baringo

Is meant to develop the talent within the county and Kenya as well. This initiative will result in the development of film recording and producing facility. Other Opportunities PROjECT PRIVATE SECTOR ENGAGEMENTSetting up a Tour and Travel Direct Investment Development of conservancies Joint venture Community Enterprises Joint Venture Cultural Centre Direct Investment

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REAL ESTATE DEVELOPMENT OF STAFF & RESIDENT HOUSING

a) Project Information 1. Overview of the Project

tSummary /Key highlights of the project including a brief description of the economic and social benefits Baringo constitutes 5 constituencies (Baringo Central, Baringo East, Eldama ravine, Baringo East and Mogotio). The County’s population as of 2014 stands at 555,561 out which 61,551 are located in the urban cities. Despite this huge population, housing is a major challenge facing the County. More so the staff housing as major services were devolved to the County from the National government. In Baringo Central, there are 170 government houses while in Mogotio and Eldama Ravine there are 214 housing units. Existing approximately 384 county housing units are not enough to house over 10,000 county workers and residents therefore an urgent need for the additional housing units. The project aims to improve the living standards of both staff and residents. It is assumed that the completion of these projects will reduce the existing gap of housing.

2. Product offering Description Describe the product/service being offered including its use and technology utilised. The project has various components that will include: • One Bedroomed storeyed House -self-contained. • Two Bedroomed storeyed House self-contained. • Three Bedroomed storeyed House self-contained. There are already available approved development plans for towns that can be acquired by lease or community owned land and group ranches that are can be sourced. The county has already secured 10 Acre land parcel Kabarnet town for development of public servants units. The advantages of this land is; • Conducive environment for investment • Availability of cheap Labour • Security

3. Markets and Customers Justify the need for the project noting available market size, Volume of market components and target customers


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5. Competitors Who are the project competitors both direct, indirect (substitute) and potential competitors? Existing contractors in the market 6. Institutional and legal frameworks Which institutions will be involved and what are their roles?

INSTITUTION ROLE

County Government of Baringo Business permit

National Environmental Management (NEMA) Environmental Licensing

National Construction Authority License of construction

Ministry of Health Health and Safety license for workers

Shopping Mall Complex Promoter : County of Baringo Private Sector Participation : Direct Investment Location : Baringo

Within the County. The project will comprise banking hall, restaurants, social hall, Green he aim is to develop an ultra-modern shopping mall. That will be one of the iconic sites Park, super-market, clinics and other retail shops. Other Opportunities PROjECT PRIVATE SECTOR ENGAGEMENT Development of recreational parks Direct Investment Development of tourist resort Centre Direct investment

The project targets the county staff and those officers deployed within the county. In addition, the residents of the County and those in the diaspora that may looking to own property in the community. 4. Business Model How is the project planned to generate revenue. What will be the costs and expected gross margins. The project cost is as below;

S/N O SIZE COST PER UNIT TOTAL UNITS TOTAL COST (DOLLARS)

1 One Bedroomed 10,000 USD 50 500,000 USD

2 Two Bedroomed House 15,000 USD 50 750,000 USD

3 Three Bedroomed 20,000 USD 50 1M USD

TOTAL 150 2.25M USD

The Expected income is as below;

S/N O SIZE COST PER UNIT TOTAL UNITS TOTAL COST (DOLLARS)

1 One Bedroomed 100 USD 50 5,000 USD

2 Two Bedroomed House 150 USD 50 7,500 USD

3 Three Bedroomed 180 USD 50 9,000 USD

TOTAL 150 21,500 USD

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Housing • Tax deductibility of interest from infrastructure and

social service bonds. • Tax deductibility for expenditures for social infrastructure. • Expenditure of a capital nature incurred by a person

on the construction of a public school, hospital or any similar kind of social infrastructure and is given prior approval by the Minister of Finance is tax deductible.

• A prescribed dwelling house (a house constructed for and occupied by employees of a business) qualifies as an Industrial Building as defined under the income Tax Act. Hence the employer is allowed a deduction against his taxable income at the rate of 1/40 of the capital expenditure per annum.

• Industrial Building deduction on capital expenditure incurred on the construction of an industrial building to be used in a business carried on by a person or the lessee for any year of income in which the building is so used.

Environment • The Minister responsible for finance may, on the

recommendation of the NEMA, propose Government tax and other fiscal incentives, disincentives or fees to induce or promote the proper management of the environment and natural resources or the prevention or abatement of environmental degradation.

Tourism • The government, upon application, exempts import

duty and VAT on the following items and equipment for hotel construction and refurbishment: washing machines, kitchen ware, cookers, fridges and freezers, air conditioning systems, cutlery, televisions, carpets, furniture and linen and curtains. All other items and equipment required by hoteliers are only VAT exempt upon application for construction and refurbishment.

• Exemption from VAT - Materials and equipment for use

in the construction or refurbishment of tourist hotels. All materials and equipment, excluding vehicles and goods for regular repair and maintenance, the purchase or importation of which is approved by the Permanent Secretary to the Treasury, for use in the construction or refurbishment of tourist hotels. This is subject to the production of such evidence as the Commissioner may require details of the quantity, quality and type of good for the project.

Energy • Biomass - fixed tariff not exceeding USD 0.8 per kilowatt-

hour of electrical energy supplied in bulk to the grid operator at the interconnection point.

• Wind - fixed tariff not exceeding USD 0.12 per kilowatt-hour of electrical energy supplied in bulk to the grid

INCENTIVES

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operator at the interconnection point. • Geothermal - A fixed tariff not exceeding USD 0.85 per

kilowatthour of electrical energy supplied in bulk to the grid operator at the interconnection point.

• Biogas - A fixed tariff not exceeding USD 0.8 per kilowatt-hour of electrical energy supplied in bulk to the grid operator at the interconnection point.

• Solar - A fixed tariff not exceeding USD 0.2 per Kilowatt-hour of electrical energy supplied in bulk to the grid operator at the connection point.

Agriculture

Farm Works Deductions (FWD) • This is granted at the rate of 33.33% per annum for

three years to the owner or tenant of any agricultural land who incurs capital expenditure on the construction of farm works. Farm works means labor quarters, farm house and any other immovable building necessary for the proper operation of the farm such as fences, dips, drains, dams, water and electrical supply works etc.

Double Taxation

Treaties Double Taxation treaties • Kenya has entered into double taxation treaties which

mitigate the tax chargeable on the income of persons derived from a country in which they are resident. These

include Canada, Denmark, Norway, Sweden, India, Zambia, United Kingdom and Germany.

• A double tax agreement for East African region (between Kenya, Uganda and Tanzania) has not been ratified. However income tax legislation allowing for unilateral relief operates in Uganda and Tanzania, which enables both individual and business receiving income from off-shore to obtain a tax credit for tax paid on such income in the countries from which it originates. In Kenya, the benefit of such unilateral relief is restricted to the employment income of Kenyan citizens.

Investment Guarantees • Kenya Constitution guarantees security of life and

property. • Member of Multilateral Guarantee Agency covers foreign

investors against noncommercial risks. • Member of International Centre for Settlement of

International Disputes (ICSID) covers arbitration of disputes outside of Kenya.

• Member of Africa Trade Insurance Agency (ATIA) covers both commercial and non-commercial risks.

• Protection of innovation and intellectual property to catalyze technological development on such income in the countries from which it originates. In Kenya, the benefit of such unilateral relief is restricted to the employment income of Kenyan citizens.

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Types business in Kenya The principal types of business enterprises in Kenya are: 1. Registered Companies (Private and Public) Companies are registered as limited liability companies

and are regulated by the Companies Act (Cap 486) 2. Branch offices of companies registered outside Kenya The branch will be issued with a Certificate of Compliance 3. Partnerships A partnership is restricted to a maximum of 20 persons,

each of whom is jointly and separately liable for all debts incurred- regulated Partnership Act 1981

4. Sole Proprietorships 5. Co-operatives Procedure for setting business in Kenya. Step by step guide a. Company incorporation (Registrar of Companies) • Reserve a company name and get it approved Registrar

of Companies - Done online/Mobile phone. o Prepare the Memorandum of Association and Articles of Association.

Complete various forms including Statement of Nominal Capital, Particulars of Directors and Shareholders, Situation of Registered Office and Certificate of a Lawyer involved in the Formation of the Company.

• Stamp the Memorandum of Association and Articles of Association and the Statement of Nominal Capital at the

• Lands Office together with payment of stamp duty on Nominal Capital. o File all the forms together with one stamped copy of the Memorandum of Association and Articles of Association with the Registrar of Companies. Certificate of Incorporation will be issued by the Registrar of Companies. In addition, for public companies, the Registrar will also issue a Trading Certificate.

b. Company PIN and VAT number registration by

Kenya Revenue Authority. c. National Social and Security Fund and National

Health and Insurance Fund registration. d. Get Single business permit from respective county

government. e. Submit application forms with copies of Certificate

of Incorporation, • Registration or Certificate of Compliance and

memorandum and Articles of Association to KenInvest. f. Issuance of The Investment Certificate from

KenInvest, • upon conforming to Health, Environment and Security

requirements;

A GUIDE TO INVESTING IN BARINGO

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County Government of Baringo

P.O BOX 53-30400, Kabarnet. Telephone: +254 (0) 53 - 22115 E-mail: [email protected]

KenInvest Head Office

Kenya Railways Headquarters Block D, 4th Floor. Workshops Road, off Haile Selassie Avenue P.O. Box 55704 - 00200 Nairobi, City Square Tel: (+254) 730104 200 [email protected] investmentkenya.com

CONTACTS

6

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INVEST IN

2014 POPULATION

43 MILLION

2014 TOTAL GDP

$ 58.1 BILLION

2014 AVERAGE GDP PER CAPITA

$ 1418.7

2014 TOTAL EXPORTS VOLUME

$6.1 BILLION2014 TOTAL IMPORTS VOLUME

$18.4 BILLION

AVERAGE ANNUALCONSUMER PRICE INDEX

125 / 0.2

SURFACE AREA INCLUDING WATER

580,367 SQ KM

AVERAGE ANNUAL GDP GROWTH

5.3%

KENYA AT

FOREWORD & PREFACE

WHY INVEST IN KENYA?

Keninvest – Core Functions & Services

AN OVERVIEW OF INVESTOR INCENTIVES

KEY CONTACTS

Flagship Projects

08 East and Central Africa’s Largest Economy

09 Low Risk Investment Environment 11 Strategic Geographical Location

12 Wide Market Access 13 Political Stability & Favourable Investment Policy

14 Improving Infrastructure

15 Reducing Cost Of Energy and Improving Energy Availability

16 Well Established Private Sector

A Skilled and Educated Talent Pool

Vibrant Capital Markets

18 Transport

21 Energy

28 Agriculture

30 Real Estate

31 Tourism

04 07

37 38 46

17 32 Water Supply

34 Health

35 Education

36 Manufacturing

Finance

Source: Kenya National Bureau of Statistics

2014 POPULATION

43 MILLION

2014 TOTAL GDP

$ 58.1 BILLION


$ 1418.7



$18.4 BILLION


125 / 0.2


580,367 SQ KM


5.3%

KENYA AT

FOREWORD & PREFACE




KEY CONTACTS

Flagship Projects









18 Transport

21 Energy

28 Agriculture

30 Real Estate

31 Tourism

04 07

37 38 46

17 32 Water Supply

34 Health

35 Education

36 Manufacturing

Finance


2014 POPULATION

43 MILLION

2014 TOTAL GDP

$ 58.1 BILLION


$ 1418.7



$18.4 BILLION


125 / 0.2


580,367 SQ KM


5.3%

KENYA AT

FOREWORD & PREFACE




KEY CONTACTS

Flagship Projects









18 Transport

21 Energy

28 Agriculture

30 Real Estate

31 Tourism

04 07

37 38 46

17 32 Water Supply

34 Health

35 Education

36 Manufacturing

Finance


4 | INVEST IN KENYA | KENINVEST KENINVEST | INVEST IN KENYA | 5

The re-based Gross Domestic Product (GDP) figures of USD 58.1 billion in 2014 place Kenya as one of the largest economies in Sub-Saharan Africa and fastest growing in the world – distinguished from many nations by the fact that it is one of the most diversified and advanced.

Our economy is built around agriculture, manufacturing, real estate and services. Although agriculture remains the mainstay of the economy at 25 per cent of GDP, manufacturing’s contribution to GDP has been increasing significantly over recent years. Manufacturing – which has been strong in processing agricultural products – is the second largest contributor to GDP at 13 percent. Tourism – the third largest source of foreign exchange – has strong links to transport, food production, retail trade, and the entertainment industry. For us Kenyans to achieve the aspirations of Vision 2030, we should keep these inter-sectoral linkages of our economy in perspective.

I want to assure our investors, both local and foreign, that Kenya is open and safe for doing business. Our Government is implementing measures aimed at ensuring political and economic stability – which are key pillars for the long-term prosperity of any country. In addition, the Government is developing world-class infrastructure including transport and power projects to make our country more globally competitive.

The Jubilee Government welcomes all investors to our beautiful county, Kenya; an ideal destination for investment, trade and tourism. To our investors, be assured that our Government will do everything necessary to reap maximum returns for your investment.

This investment book contains viable investment opportunities and bankable investment projects for private-public partnerships (PPPs), concessional projects, joint ventures and sole entrepreneurship.

On behalf of all Kenyans, I assure all investors of necessary Government support.

Vision 2030 aspires to further develop Kenya’s position as a globally competitive nation with a high quality of life for all

citizens by the year 2030. The economic pillar of the strategy identifies several developmental projects – the execution

of which is core to achieving strong economic growth and continued opportunity for global investors.

We, at KenInvest, are expected to play a key role in accelerating uptake of these projects by investors and to contribute to Vision 2030. We need to grow investment

as a ratio of GDP from the current level to at least 32 percent. As part of our efforts to reach this level, it’s my

pleasure to present to you this investment handbook.

This handbook presents reasons why you should invest in Kenya, gives you step-by-step guides on the

company formation process in Kenya, incentives available as well as investment opportunities.

Although we act locally, KenInvest is a global agency with considerable experience in helping

both international and local companies to invest in Kenya. Our range of advisory services, investment information, and project facilitation services help

investors start operations smoothly and within the most time efficient way possible.

Talk to us today to find out how we can help your business.

Mrs. Anne Kirima Muchoki, Chairlady, KenInvest

Mrs. Anne Kirima Muchoki Dr. Moses Ikiara

Dr. Moses Ikiara, PhD, MBS, Managing Director, KenInvest
























Investment is crucial in fulfilling our Vision 2030 goals. The vision aims at transforming Kenya into a newly industrializing, middle-income country providing a high quality life to all its citizens by year 2030.

For us to achieve the goals set forth in Vision 2030, we are focused on promoting private sector participation in the sectors and industries that provide fast-paced growth and spur a wave of investment opportunities for companies around the world.

Achievement of the double-digit annual growth rate targeted in Vision 2030 requires investment to grow - and we are making great strides in this direction. Foreign direct investments increased by almost 100% in 2013, reaching USD 514 million. Kenya boasts of a number of attractive investment strengths, including its strategic location as a gateway to East Africa, a fully liberalized economy, a large domestic market, access to a skilled human resource pool and advanced infrastructure.

We welcome investors from around the world to take advantage of the business opportunities available in Kenya.

Mrs. Phyllis J. Kandie Cabinet Secretary, Ministry of East African Affairs, Commerce and Tourism

Mrs. Phyllis J. Kandie SECTION 1



STRONG AND LARGE REGIONAL PLAYER Kenya is the dominant economy in the East Africa Community, contributing to more than 40% of the region’s GDP.

Growing consumer marketKenya has the second largest population within the EAC at 43 million and is growing at a rate of 2.7 per cent per annum. There is a rising trend towards urbanization, which is contributing to an increase in consumer demand for high value goods. This trend is forecasted to continue, with 50 per cent of the population expected to live in urban areas by 2050.

The size of Kenya’s middle class is growing as evidenced by the growth in its gross national income per capita, which has increased at a CAGR of 2 per cent over the past 10 years.

COMPARATIVE GDP, CURRENT USD BN, 2013

POSITIVE INVESTOR SENTIMENTFDI has been on the rise and is stronger than investment in other EAC countries. Given its position as the economic, commercial and logistical hub of East Africa, private equity capital is now flowing into Kenya.

In 2013, Kenya was the top destination for international investors in the Eastern Africa Region after attracting 12 private equity deals valued at over USD 110.5 million; and in 2015, PwC ranked Nairobi as the most attractive African city for FDI.

“Kenya is developing as the favoured business hub, not only for oil and gas exploration in the sub region but also for industrial production and transport. The country is set to develop further as a regional hub for energy, services and manufacturing over the next decade.” – UNCTAD.

East and Central Africa’s Largest Economy

Low Risk Investment Environment

Kenya is the largest and the most advanced economy in East and Central Africa; with strong growth prospects supported by an emerging, urban middle class and an increasing appetite for high-value goods and services.

Kenya’s investment climate is the strongest in the EAC, with FDI flowing in from emerging and developed markets and a high volume of multinational companies with regional and continent-wide headquartered in the country.

01 02

Kenya 44.1%

Burundi 2.72%

Rwanda 7.45%

Tanzania 33.23%

Uganda 21.48

SOURCE:World Bank

FDI INFLOWS, USD MNSOURCE:World Bank

2009 2010 2011 2012 2013

115 178

346%

335 259 514

Sales

bur

kenya

rwanda

tanzania

uganda


• Kwale International Sugar Company invested USD 200 million in a sugar processing facility in Ramisi – one of the largest greenfield projects in Africa.

• Harith General Partners invested USD 870 million in a wind project in Lake Turkana – one of the biggest wind projects in Africa.

• GZI Kenya Limited is setting up a beverage aluminum can manufacturing plant in Sultan Hamud Kajiado County with capacity to produce 1.2 billion per year.

global brand presence

RECENT LANDMARK INVESTMENTS

Kenya’s geographical location makes the country ideal for strategic partnerships aimed at improving regional and global market share.

REGIONAL CONNECTIVITYKenyan infrastructure, including the Ports of Mombasa and the KE-UG railway, is the gateway to the vibrant East and Central Africa region.

INTERNATIONAL CONNECTIVITYJomo Kenyatta International Airport functions as an effective air hub between Africa, Europe and Asia.

StrategicGeographical Location 03


• Kwale International Sugar Company invested USD 200 million in a sugar processing facility in Ramisi – one of the largest greenfield projects in Africa.

• Harith General Partners invested USD 870 million in a wind project in Lake Turkana – one of the biggest wind projects in Africa.

• GZI Kenya Limited is setting up a beverage aluminum can manufacturing plant in Sultan Hamud Kajiado County with capacity to produce 1.2 billion per year.

global brand presence

RECENT LANDMARK INVESTMENTS

Kenya’s geographical location makes the country ideal for strategic partnerships aimed at improving regional and global market share.

REGIONAL CONNECTIVITYKenyan infrastructure, including the Ports of Mombasa and the KE-UG railway, is the gateway to the vibrant East and Central Africa region.

INTERNATIONAL CONNECTIVITYJomo Kenyatta International Airport functions as an effective air hub between Africa, Europe and Asia.

Strategic Geographical Location 03



Wide Market Access EAC Member Countries: 5

Population: 143.5 million

Total GDP: $110.3 billionSource: EAC Facts & Figures Report (2014)

Kenya’s membership of regional economic blocs, coupled with its strategic geographic position, make the country the gateway to the huge EAC and COMESA regional markets and a beneficiary of several preferential trade arrangements.

COMESAMember Countries: 20

Population: 469 million

Total GDP: USD 636 billion Source: COMESA (2013)

PREFERENCIAL TRADE TREATMENTKenya is a member of several trade arrangements and beneficiary of trade promotion schemes that include the Africa Growth and Opportunity Act (AGOA), World Trade Organisation and EAC-EU Trade Agreement.

TRIPARTITE (EAC-SADC-COMESA) There will soon be Tripartite Free Trade Area (FTA) cooperation, a regional bloc of the EAC, COMESA & SADC nations – create a potential market of over 600 million.

Strategy• Market Integration• Infrastructure development • Industrial development

Pillars• Harmonization and improvement of functionality of regional trade agreements and programs

• Trade promotion

• Joint planning and implementation of infrastructure programs

• Free movement of business persons within the region

04Empowered by a new constitution and administration, the national and county Governments are approaching the private sector as a central partner in the development and growth of the Kenyan economy.

A NEW APPROACH TO THE PRIVATE SECTORA New GovernmentThe new Jubilee Administration regards the private sector as a key centre of economic and social development. It has signaled this shift in the Government’s orientation through the divestment of its majority shareholding in state commercial companies through the Nairobi Securities Exchange.

Business environment reformsKenya is making efforts to lower the cost of doing business by conducting extensive business regulatory reforms intended to substantially reduce the number of licensing requirements and to make the licensing regimes more transparent and focused on legitimate regulatory purposes.

Open market access system Kenya has fully liberalised its economy and removed all obstacles that previously hampered the free flow of trade and private investment, such as exchange controls, import and export licensing, as well as restrictions on remittances of profits and dividends.

Devolution into County Governments Empowered by the new constitution, devolution offers an opportunity for investment through localised innovation and through collaboration, by building commercial ecosystems that expand employment opportunities and empower local communities.

INVESTOR GUARANTEES• The Kenya Constitution guarantees against expropriation of private property

• No exchange controls guarantee repatriation of capital, profits and interests

• A Member of the Multilateral Investment Guarantee Agency (MIGA) and the Africa Trade Insurance Agency (ATIA), which both insure foreign investments against non-commercial risks

• A member of the International Centre for Settlement of Investment Disputes (ICSID), which arbitrates cases between foreign investors and host Governments.

Political stability & favourable investment policy 05


Kenya is ideally positioned to unleash Africa’s power generation capacity through its focus on green energy and cost effective sources of energy, set to contribute to a 5000MW increase in the national power grid.

POWER & ENERGY STRATEGYIncreasing share of power generated from green and more cost effective sources, with a target to increase electricity generation capacity by 5,000MW from the current 1,644MW to 6,700MW in 40 months.

Key Power Project and Recent Resource DiscoveriesWIND POWER PROJECT300 MW Lake Turkana Wind Power Project valued at USD 823 million.

WATER DISCOVERYTwo new water sources at Turkana Basin and Lotikipi Basin holding 250 billion m3 of water, sufficient to supply Kenya for 70 years.

OIL DISCOVERYDiscovery of reserves by Tullow oil are estimated to extract as much as one billion barrels.

GEOTHERMAL POWER PROJECT3,000 MW Geothermal Power Project in Baringo valued at USD 135 million.

COAL POWER PLANT900-1,000MW Coal Power Plant in Lamu.

NATURAL GAS PLANT700-800MW Natural Gas Fired Plant near Mombasa through a PPP.

Kenya’s infrastructure landscape is also undergoing significant transformation as evidenced by commitment of over USD 20 billion towards infrastructure development through public-private partnerships.

INFRASTRUCTURE STRATEGYIncreasing investment in infrastructure under PPP arrangements

USD 14.5 billion Konza Technology City “Silicon City”IT hub to be built on 5000 acres of land in Machakos County.

USD 5.5 billion Lamu Port Southern Sudan – Ethiopia Transport Corridor Construction of Lamu Port headquarters is in progress.

USD 3.6 billionStandard Gauge Railway links Kenya’s Indian Ocean port city of Mombasa to the capital Nairobi

USD 654 million Jomo Kenyatta International Airport expansioncomprises of a 178,000m2 facility due for completion in 2017, complemented by Nairobi Commuter Rail Service linking the city centre to the airport.

USD 366 million The Port of Mombasa harbour channel was deepened by 15 metres and widened to 500 metres to accommodate larger vessels.

USD 360 millionConstruction of the eight-lane controlled-access 50km

Nairobi–Thika superhighway was completed in 2012. It has led to the emergence of new businesses, especially in retail and real estate including the creation of three major malls.


Improving Infrastructure06 Reducing cost of energy and improving energy availability 07


SECTION 2

Kenya’s private sector is substantial and includes a number of foreign investors.

Key players in voicing private sector concerns include: Kenya Private Sector Alliance (KEPSA), Federation of Kenya Employers (FKE) and the Kenya Association of Manufacturers (KAM).

Kenya prides itself on its large, highly educated and skilled work force – with 55% of the population aged 15-64.

Foreign participation in NSE: 54.1% of total equity turnover (January-June 2014).


Well established private sector

A skilled and educated talent pool

Vibrant capital markets

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09

10


Lamu Port (LAPSSET- Lamu Port Southern Sudan Ethiopia Transport Corridor Project) Promoter: Kenya Ports Authority (KPA)

Estimated Investment: USD 664 million

Private Sector Participation: Build-Operate-Transfer

Location: Lamu

The project will see the construction of three additional berths and a draft of 18 metres to accommodate larger ships equivalent to 100,000 tons. The first three berths are under construction through the Government funding. The port will be linked to Ethiopia and South Sudan through a road network and a standard gauge railway line via Garissa, Isiolo, Maralal, Lodwar and Lokichogio.

Nairobi Commuter RailPromoter: Kenya Railways Corporation

Estimated Investment: USD 68 million (private equity)

USD 70 million (private debt)

Private Sector Participation: Concession

Location: NairobiThis project seeks a partner to run the commuter service of the Nairobi Commuter Rail and will include provision of rolling stock. The new rail line will provide expanded, safe, affordable and efficient rail commuter services in Nairobi with the additional benefit of decongesting the capital city’s roads. The Government has already invested in the restoration of the rails.

Railway CitiesPromoter: Kenya Railways Corporation

Estimated Investment: USD 2,150 million

Private Sector Participation: Joint Venture

Location: Nairobi, Mombasa, and Kisumu

This initiative will redevelop existing rail stations into mini cities, which include business parks for light manufacturing, hotels, shopping arcades, restaurants and parking garages.

Flagship Projects

TRANSPORT TRANSPORT01 01 Thika Toll RoadPromoter: Kenya National Highways Authority (KeNHA)



Location: Nairobi - Thika Highway

The highway serves numerous large commercial and industrial enterprises and rapidly growing real estate zones. The 52 km long high capacity expressway is part of the International Trunk Road linking Kenya to Southern Africa through Tanzania and Northern Africa through Ethiopia. It connects high potential industrial and commercial areas in central parts of Kenya to the regional highway backbone (Northern Corridor), Kenya’s International Airport, and three (3) major city arterial roads. The highway will enable smooth dispersal of traffic within the greater Nairobi metropolitan area.


Lamu Port (LAPSSET- Lamu Port Southern Sudan Ethiopia Transport Corridor Project) Promoter: Kenya Ports Authority (KPA)


Private Sector Participation: Build-Operate-Transfer

Location: Lamu

The project will see the construction of three additional berths and a draft of 18 metres to accommodate larger ships equivalent to 100,000 tons. The first three berths are under construction through the Government funding. The port will be linked to Ethiopia and South Sudan through a road network and a standard gauge railway line via Garissa, Isiolo, Maralal, Lodwar and Lokichogio.

Nairobi Commuter RailPromoter: Kenya Railways Corporation

Estimated Investment: USD 68 million (private equity)

USD 70 million (private debt)


Location: NairobiThis project seeks a partner to run the commuter service of the Nairobi Commuter Rail and will include provision of rolling stock. The new rail line will provide expanded, safe, affordable and efficient rail commuter services in Nairobi with the additional benefit of decongesting the capital city’s roads. The Government has already invested in the restoration of the rails.

Railway CitiesPromoter: Kenya Railways Corporation

Estimated Investment: USD 2,150 million


Location: Nairobi, Mombasa, and Kisumu

This initiative will redevelop existing rail stations into mini cities, which include business parks for light manufacturing, hotels, shopping arcades, restaurants and parking garages.

Flagship Projects

TRANSPORT TRANSPORT01 01 Thika Toll RoadPromoter: Kenya National Highways Authority (KeNHA)



Location: Nairobi - Thika Highway

The highway serves numerous large commercial and industrial enterprises and rapidly growing real estate zones. The 52 km long high capacity expressway is part of the International Trunk Road linking Kenya to Southern Africa through Tanzania and Northern Africa through Ethiopia. It connects high potential industrial and commercial areas in central parts of Kenya to the regional highway backbone (Northern Corridor), Kenya’s International Airport, and three (3) major city arterial roads. The highway will enable smooth dispersal of traffic within the greater Nairobi metropolitan area.


Mombasa 2nd Container TerminalPromoter: Kenya Ports Authority

Estimated Investment: USD 330.1 million

Private Sector Participation: PPP

Location: Mombasa

A new container terminal at the port of Mombasa – on an area of 100 hectares at the western side of the existing Kipevu Oil Terminal – is planned to create an additional capacity of 1.2 million TEU.

Multi-story Terminal at Likoni Promoter: Kenya Ferry Services Limited



Location: Mombasa

Development of a multi-story terminal on 1.6 hectares in Mombasa to provide a modern ferry terminal, parking, bus terminal as well as a variety of commercial services to maximize revenue potential of the site.

UPCOMING PROJECTS

Olkaria I United 6 (70MW)Promoter: Kenya Electricity Generating Company (KenGen)

Estimated Investment: USD 314 Million

Private Sector Participation: EPC

Location: Olkaria, Naivasha

The Olkaria I Unit 6 geothermal power project is an extension to the recently completed Olkaria I Unit 4&5 under the GoK’s 5000+Strategy of provision of affordable power through renewable energy sources. Opportunities exist for EPC Contractor for:

• Lot 1- LOT I Contract: Steam-field Development.

• Lot 2- LOT II Contract: Power Plant - Civil, Electrical and Mechanical Works including interconnection to Grid.

Olkaria V (140MW)Promoter: Kenya Electricity Generating Company (KenGen)




This project will increase geothermal generation through the development of a new 140 MW power plant. This provides the following opportunities to EPC contractors.

• Lot I: steam-field development contract

• Lot II: power plant - civil, electrical and mechanical EPC contract

• Lot III: sub-station, transmission line and interconnection into the grid

• Lot IV: local infrastructure works (road, offices, training school and accommodation).

Flagship Projects

Project

PPP Structure for food courts at JKIA

O&M of JKIA Terminal 2(Greenfield Terminal)

Kisumu Lake Port

Integrated Marine Transport System(IMTS)

O&M of Nairobi Southern Bypass

2nd Nyali Bridge

O&M of Nairobi-Thika Road

Dualing of Nairobi-Nakuru Road

Dualing of Nairobi-Mombasa Highway

Conversion of berths 11-14 into container terminals.

Promoter

Kenya Airports Authority


Kenya Ports Authority

Kenya Ferry Services Limited

Kenya National Highways Authority






Flagship Projects

TRANSPORT01 ENERGY02





Location: Mombasa





Location: Mombasa


UPCOMING PROJECTS

















Flagship Projects

Project

PPP Structure for food courts at JKIA


Kisumu Lake Port



2nd Nyali Bridge





Promoter











Flagship Projects






Location: Mombasa





Location: Mombasa


UPCOMING PROJECTS

















Flagship Projects

Project

PPP Structure forfood courts at JKIA


Kisumu Lake Port



2nd Nyali Bridge





Promoter











Flagship Projects



Meru Wind (400MW)Promoter: Kenya Electricity Generating Company (KenGen)



Location: Meru

The proposed project will be undertaken in three phases of 50MW, 150MW and 250MW. The project provides opportunities for EPC Contractor to design, supply, install, test and commission Phase I of the Meru Wind Project. In addition, an equity partner is required for the subsequent phases.

Olkaria VI (140MW)Promoter: Kenya Electricity Generating Company (KenGen)

Estimated Investment: USD 418.52 Million



Olkaria Field is endowed with geothermal energy for the provision of steam and power. KenGen has been exploring the field and currently, the exploited capacity amounts to 487MW of power. The project presents opportunities in terms of advisory services, consultancies, financing (loan or equity), EPC contract, O&M management contract among others in line with the preferred model that will be selected for implementation.

635MW Geothermal Olkaria PipelinePromoter: Kenya Electricity Generating Company(KenGen)



Location: Olkaria Field, Naivasha

The Government of Kenya has granted KenGen the license to develop the Olkaria field, which has an estimated resource potential of about 1200 MW, of which 204.8 MW is already developed, and an additional 280 MW is in the construction stages.

The development will also bring local employment opportunities and skills development directly through the provision of construction and operational jobs, and indirectly through the attraction of investment into the area.

Flagship ProjectsFlagship Projects

ENERGY02 KenGen Industrial ParkPromoter: Kenya Electricity Generating Company (KenGen)

Private Sector Participation: Leasing


This project will see the development a world-class mixed use in-dustrial park including various clusters of businesses, manufactur-ing and services in Olkaria. The project will cover 1200 acres and will benefit from the proximity to the geothermal power stations and the Nairobi-Kampala railway

Mombasa Petroleum Trading Hub Promoter: National Oil Corporation (NOCK)



Location: Mombasa

The Trading Hub will be a modern petroleum terminal comprising of two offshore petroleum jetties with one dedicated to loading/offloading of crude oil and black fuels. The other dedicated to refined products. A modern greenfield petroleum tank farm with a design capacity of 800,000MT is to be developed in phases from an initial minimum capacity of 300,000 MT. The project aims at improving supply security and reducing the cost of supply.

Liquefied Natural Gas (LNG) Storage and Regasification Facility with Associated Power GenerationPromoter: Ministry of Energy


Private Sector Participation: 30 year concession for LNG facility and a 20 year power purchase agreement for a Build Own Operate plant with additional time for decommissioning and land restoration

Location: Dongo Kundu, Mombasa

The project comprises of two components. One component involves the development of a jetty, storage and the re-gasifica-tion facilities. The second component will see the development of a power generation plant in partnership with KenGen and the private sector.

ENERGY02


Meru Wind (400MW)Promoter: Kenya Electricity Generating Company (KenGen)



Location: Meru

The proposed project will be undertaken in three phases of 50MW, 150MW and 250MW. The project provides opportunities for EPC Contractor to design, supply, install, test and commission Phase I of the Meru Wind Project. In addition, an equity partner is required for the subsequent phases.

Olkaria VI (140MW)Promoter: Kenya Electricity Generating Company (KenGen)




Olkaria Field is endowed with geothermal energy for the provision of steam and power. KenGen has been exploring the field and currently, the exploited capacity amounts to 487MW of power. The project presents opportunities in terms of advisory services, consultancies, financing (loan or equity), EPC contract, O&M management contract among others in line with the preferred model that will be selected for implementation.

635MW Geothermal Olkaria PipelinePromoter: Kenya Electricity Generating Company(KenGen)



Location: Olkaria Field, Naivasha

The Government of Kenya has granted KenGen the license to develop the Olkaria field, which has an estimated resource potential of about 1200 MW, of which 204.8 MW is already developed, and an additional 280 MW is in the construction stages.

The development will also bring local employment opportunities and skills development directly through the provision of construction and operational jobs, and indirectly through the attraction of investment into the area.


ENERGY02 KenGen Industrial ParkPromoter: Kenya Electricity Generating Company (KenGen)

Private Sector Participation: Leasing


This project will see the development a world-class mixed use in-dustrial park including various clusters of businesses, manufactur-ing and services in Olkaria. The project will cover 1200 acres and will benefit from the proximity to the geothermal power stations and the Nairobi-Kampala railway

Mombasa Petroleum Trading Hub Promoter: National Oil Corporation (NOCK)



Location: Mombasa

The Trading Hub will be a modern petroleum terminal comprising of two offshore petroleum jetties with one dedicated to loading/ offloading of crude oil and black fuels. The other dedicated to refined products. A modern greenfield petroleum tank farm with a design capacity of 800,000MT is to be developed in phases from an initial minimum capacity of 300,000 MT. The project aims at improving supply security and reducing the cost of supply.

Liquefied Natural Gas (LNG) Storage and Regasification Facility with Associated Power GenerationPromoter: Ministry of Energy


Private Sector Participation: 30 year concession for LNG facility and a 20 year power purchase agreement for a Build Own Operate plant with additional time for decommissioning and land restoration

Location: Dongo Kundu, Mombasa

The project comprises of two components. One component involves the development of a jetty, storage and the re-gasifica-tion facilities. The second component will see the development of a power generation plant in partnership with KenGen and the private sector.

ENERGY02


Arror Multipurpose Dam Promoter: Kerio Valley Development Authority



Location: Kapsowar Town

The development is proposed to generate 60MW of hydropower using waters of Arror River, as well as irrigating 2500 hectares for crop production whilst conserving, rehabilitating and protecting the environment along the Arror.

Magwagwa Multipurpose Dam Promoter: Lake Basin Development Authority



Location: Magwagwa

Magwagwa Multipurpose Dam Project comprises the construction of a 95m high and 450m long concrete faced rock fill dam with a design total output of 120MW and an annual energy production of 510GWh per year. It also comprises a reservoir with a maximum capacity of 445*10,000,000 cubic meters expected to supply water to 19 service centres starting with Magwagwa town, whilst also providing water for irrigation and fisheries.


ENERGY02 Gitwiki Hydro Falls Promoter: County Government of Meru



Location: North Imenti

The development is proposed to generate 1.5 MW of hydropower on Kathita River. The payback period of the development is seven years. The annual revenue projection is USD 657,000.

Kamachege Hydro FallsPromoter: County Government of Meru



Location: South Imenti

The development is proposed to generate 2.5MW of hydropower using waters of Kithinu River. The annual revenue projection is USD 1.095 million.

ENERGY02


Project

Kiambere-Solar Energy Development

2x100MW Menengai Phase I-I

800 MW Menengai Phase 2

Offshore Jetty

300MW Geothermal Plant

Promoter

Tana & Athi Rivers Water Development Authority

Geothermal Development Corporation (GDC)


National Oil Corporation of Kenya


Nturingwi Solar PVPromoter: County Government of Meru



Location: Nturingwi

The development is proposed to generate 80MW of solar power. The flat topography, its average global horizontal irradiation of 6.2kWh/m2 per day and 2263.3kWh/m2 per annum make it ideal for a solar PV project.

Kandebene Wind ProjectPromoter: County Government of Meru



Location: Kangeta Hills- Tigania East

The development is proposed to generate 50MW as the area falls under wind class 4-5. The annual revenue projection is USD 14.45 million, with an estimated payback period of seven years.

UPCOMING PROJECTS


ENERGY02


TANA DELTA IRRIGATION SUGAR PROJECTPromoter: Tana & Athi Water Rivers Development Authority



Location: Garsen County, 100km North of Malindi

Development of 20,000 hectares of sugar fields, construction of a 10,000 hectares sugar processing plant, installation of a 34 MW cogeneration power plant and installation of ethanol plant with capacity of 75,000 litres per day.

FISH PORT DEVELOPMENT PROJECT Promoter: Coast Development Authority

Estimated Investment : USD 820 million


Location: Kenyan Coastline

The project is designed to develop a modern and equipped fish port along the Kenyan coastline.

UPCOMING PROJECTS

flagship projects

AGRICULTURE03

projects PROMOTER

Tana Delta Irrigation Sugar Project

Meat Processing Plant

Fruit Processing Plant

Modern state-of-the-art Abattoir

Munyu Mutipurpose and Greater Kibwezi Irrigation

Tana Delta Irrigation Rice Project

Tana &Athi Water Rivers Development Authority

Kerio Valley Development Authority

Kerio Valley Development Authority

Mandera County Government




Konza City Technopolis Promoter: Konza Technopolis Development Authority

Estimated Investment: USD 14.5 Billion


Location: Malili, Machakos

The aim is to develop an ultra-modern Technopolis City 60km south off Nairobi. The Konza Technopolis will comprise of a Business Processing Offshoring (BPO) Park, together with a residential area and a modern Central Business District.

UPCOMING PROJECTS

flagship projects

REAL ESTATE04

Civil Servants Housing Project

Ministry of Land, Housing and Urban Development

projects PROMOTER

Isiolo ResorT Promoter: Ministry of Tourism


Private Sector Participation: Public Private Partnership

Location: Isiolo

The project will include the development of a five-star hotel (400 rooms), two-three star hotels (300 rooms), conference facilities, an office park and car park for 2000 vehicles.

Mombasa International Convention CenterPromoter: Tourism Finance Corporation

Estimated Investment: Undisclosed


Location: Mombasa

This project entails the development of a multi-purpose convention centre, with a contemporary design to ensure large scale meetings, events and conferences can be facilitated in Kenya.

The site is located on a reformed quarry within Haller Park, located south of the Bamburi Cement plant along the Mombasa-Malindi Highway, on the Kenyan Coast.

Expansion and Development of Kenya International Convention Centre Promoter: Kenya International Convention Centre

Estimated Investment: USD 232 million; average operating cost of USD 11 million

Private Sector Participation: Build-Lease-Transfer

Location: Nairobi

This project covers the expansion and development of a 300-bed hotel and exhibition centre in the middle of Nairobi’s central business district.

Tourism05


First Class Hotel at Bomas of Kenya Promoter: Ministry of Tourism


Location: Karen

Development of a five-star hotel with authentic African architecture and features. Traditional houses like those of the Maasai, Kalenjin, Mijikenda and Luo can be used, and are easily adaptable to hotel-type accommodation.

UPCOMING PROJECTS

flagship projects

tourism

Mwache Multipurpose Dam Development ProjectSPromoter: Coast Development Authority



Location: Mwache River, Mombasa

This project sees the construction of an 83.7m high dam with capacity to produce 47.45 million m3 of water per annum for domestic use - serving 1.5 million people and 20,000 livestock. This dam will also have an annual capacity to produce 51.79 million m3 of water for irrigation to serve an irrigated area of 8,532 hectares.

water supply06

Development of Marina at Shimoni

Tourism Finance Corporation

projects PROMOTER

Masinga Dam Ecotourism Complex

Tana & Athi Water Rivers Development Authority

05 Lake Challa Water ResourcesDevelopment ProjectPromoter: Coast Development Authority



Location: Challa River, Coast

This investment will see the development of a multi-purpose project to contribute to increases in water production for domestic use in agriculture and for irrigation, livestock, fisheries and forestry.

Dembwa Multipurpose Dam Development ProjectPromoter: Coast Development Authority

Estimated Investment: USD 8 Billion


Location: Dembwe River, Taita Taveta

This project includes the development of a 100m high dam with a reservoir capacity of 60 million m3 set to generate 3 MW of hydro power, irrigate 3,000 hectares, serve 200,000 people and 20,000 livestock and conserve 300 km3 of catchment land.

Sabaki River Basin IntegreateDPromoter: Coast Development Authority



Location: Sabaki River, Malindi

This integrated project is set on 10,000 hectares and will involve crop farming, livestock production, aquaculture, environment conservation, water supply and sanitation and development of support infrastructure.

water supply06


First Class Hotel at Bomas of Kenya Promoter: Ministry of Tourism


Location: Karen

Development of a five-star hotel with authentic African architecture and features. Traditional houses like those of the Maasai, Kalenjin, Mijikenda and Luo can be used, and are easily adaptable to hotel-type accommodation.

UPCOMING PROJECTS

flagship projects

tourism

Mwache Multipurpose Dam Development ProjectSPromoter: Coast Development Authority



Location: Mwache River, Mombasa

This project sees the construction of an 83.7m high dam with capacity to produce 47.45 million m3 of water per annum for domestic use - serving 1.5 million people and 20,000 livestock. This dam will also have an annual capacity to produce 51.79 million m3 of water for irrigation to serve an irrigated area of 8,532 hectares.

water supply06

Development of Marina at Shimoni

Tourism Finance Corporation

projects PROMOTER

Masinga Dam Ecotourism Complex

Tana & Athi Water Rivers Development Authority

05 Lake Challa Water Resources Development ProjectPromoter: Coast Development Authority



Location: Challa River, Coast

This investment will see the development of a multi-purpose project to contribute to increases in water production for domestic use in agriculture and for irrigation, livestock, fisheries and forestry.

Dembwa Multipurpose Dam Development ProjectPromoter: Coast Development Authority

Estimated Investment: USD 8 Billion


Location: Dembwe River, Taita Taveta

This project includes the development of a 100m high dam with a reservoir capacity of 60 million m3 set to generate 3 MW of hydro power, irrigate 3,000 hectares, serve 200,000 people and 20,000 livestock and conserve 300 km3 of catchment land.

Sabaki River Basin IntegreateDPromoter: Coast Development Authority



Location: Sabaki River, Malindi

This integrated project is set on 10,000 hectares and will involve crop farming, livestock production, aquaculture, environment conservation, water supply and sanitation and development of support infrastructure.

water supply06


UPCOMING PROJECTS

flagship projects

water supply

projects PROMOTERprojects PROMOTER

Athi Water Services Board

Lake Basin Development Authority

Lake Basin Development Authority

Nairobi County Government

Mombasa County Government

Nakuru County Government

Nairobi Bulk Water Supply

Nandi Forest Multipurpose Dam

Webuye Multipurpose Dam Development

Nairobi Solid Waste Management

Mombasa Solid Waste Management

Nakuru Solid Waste Management

Moi University Student HostelsPromoter: Moi University

Private Sector Participation: Build-Operate-Transfer (BOT) PPP model

Location: Nairobi

Construction of seven student hostels and blocks to accommodate 9,880 students.

UPCOMING PROJECTS

education08

300 - Bed Hospital at KNH-Private WingPromoter: Kenyatta National Hospital



Location: Nairobi

This project will see the development of the first full health PPP project in Kenya and will provide local access to state-of-the-art specialty care thereby reducing the need to travel. As a build-operate-transfer PPP investment, the investor will finance, construct, operate and maintain the envisaged seven-story building to house a 300-bed private wing.

UPCOMING PROJECTS

health07

projects PROMOTERprojects PROMOTER

Ministry of Health

Ministry of Health

Ministry of Health

Equipment Lease and Infrastructure Improvement

ICT Services at Kenyatta National

Oxygen Plant

06

projects PROMOTER

Embu University College Student Accommodation Hostels

Maseno University Student Accommodation Hostels

Egerton University Student Accommodation Hostels

SEKU Student Accommodation Hostels

Kenya School of Government-Embu Accommodation Hostels

Embu University

Maseno University

Egerton University

SEKU

Kenya School of Government-Embu


Shimoni Cement ProductionsPromoter: Coast Development Authority


Private Sector Participation: FDI, Development Partners, PPP

Location: Shimoni, Kwale District, Coast Province

This project will see the development of a cement production plant – from which the cement will be used for domestic use and export.

UPCOMING PROJECTS

MANUFACTURING09

projects PROMOTER

Flat Glass Production

Dongo Kundu Special Economic Zones

Coast Development Authority

Ministry of Industrialization Cooperatives and Enterprise Development

flagship projects

Expansion of Jamii Bora BankPromoter: Jamii Bora



Location: Nairobi

The bank focuses on small and medium entrepreneurs seeking to scale up to become future corporates. The bank seeks either equity or long-term debt to expand and match the growing demand of these clients.

UPCOMING PROJECTS

finance10

projects PROMOTER

Nairobi International Financial Centre

The Treasury

• Provide information on investment opportunities or sources of capital.

• Promote the opportunities for investment in Kenya by organizing forums, workshops and global marketing initiatives.

• Facilitate joint venture between local and foreign investors


INVESTMENT PROMOTION

• Investor tracking and after care services.• Assist in issuing investment certificates.• Assist in obtaining necessary licenses and permits.• Assist in obtaining incentives or exemptions under

various Acts of Law and other regulations.

INVESTMENT facilitation

• Review the investment climate and make recommendations to Government and relevant stakeholders, with respect to changes that would greater promote and facilitate investment, including changes to licensing requirements.

POLICY ADVOCACY

Facilitate joint venture between local & foreign investors

POLICY ADVOCACY investment promotion

investment trackingafter care services

investment facilitation


AN OVERVIEW OF INVESTOR INCENTIVESMinistry: Ministry of Information, communication and technology

Concerned Institutions: Kenya ICT Board Ministry of Information, communication & technology

Sector: ICT

Incentives: • Reduced income tax for expatriates and key national employees as well as corporate tax holiday for BPO/ITES firms to lure major investors.

• Exemptions on custom duties for ICT equipment.

• For BPO providers’ ministry offers simplified recruitment, expedited business set-ups and training program subsidies.

• Discounts on rent in BPO-specific locations.• Tax waiver on computer and computer accessories.

Ministry: Ministry of Land, Housing and Urban Development.

Concerned Institutions: Ministry of Land, Housing and Urban Development.

Sector: Housing

Incentives: • Tax deductibility of interest from infrastructure and social service bonds.

• Tax deductibility for expenditures for social infrastructure.• Expenditure of a capital nature incurred by a person on the construction of a public school, hospital or any similar kind of social infrastructure and is given prior approval by the Minister of Finance is tax deductible.

• A prescribed dwelling house (a house constructed for and occupied by employees of a business) qualifies as an Industrial Building as defined under the Income Tax Act. Hence the employer is allowed a deduction against his taxable income at the rate of 1/40 of the capital expenditure per annum.

• Industrial Building deduction on capital expenditure incurred on the construction of an industrial building to be used in a business carried on by a person or the lessee for any year of income in which the building is so used.

Ministry: Ministry of Industrialization and Enterprise Development.

Concerned Institutions: Export Processing Zone Authority, Kenya Revenue Authority, & National Treasury

Sector: Manufacturing

Incentives: EPZs

• An initial 10-year corporate income tax holiday and 25% corporation tax.

• 10-year withholding tax holiday on dividends and other remittances to non-resident parties.

• Perpetual exemption from VAT and customs import duty on inputs –raw materials, machinery, office equipment, certain petroleum fuel for boilers and generators, building materials, other supplies. VAT exemption also applies on local purchases of goods and services supplied by companies in the Kenyan customs territory or domestic market. Motor vehicles which do not remain within the zone are not eligible for tax exemption.

• Perpetual exemption from payment of stamp duty on legal instruments

• 100% investment deduction on new investment in EPZ buildings and machinery applicableover 20 years.

• Exemptions from any quotas or other restrictions or prohibitions on imports or exports with the exception of trade in firearms and military equipment.

• Procedural incentives-facilitation services by the EPZ authority together with exemption from having to take out a number of licenses.

Tax Remission for Exports

• For investors operating outside an EPZ, incentives are provided through the remission of taxes incurred in respect of exports of taxable goods by the Tax Remission Export Office (TREO). This applies where a person incurs VAT on goods imported under bond for manufacture of exports.

• The remission of VAT paid will also be allowed in respect of capital goods (excluding motor vehicles) imported or purchased for investment in industries such as oil exploration or prospecting for minerals.

Manufacturing Under Bond

• This is available to investors manufacturing for exports.

• It allows for duty and VAT free importation but the investors will be required to pay corporation tax.

• Investors operating under this license will have their operations bonded by a customs officer.


Capital Investment AllowancesThey are offered to those investing in capital projects on a reducing balance and include:

INDUSTRIAL BUILDING ALLOWANCE (IBA)IBA is granted on capital expenditure incurred on the construction of an industrial building. A rate of 2.5% per annum is applied to the qualifying cost of the construction of an industrial building and 4% per annum is applied on the qualifying cost of a hotel building. These rates may however be varied upon formal application to the Revenue Authority detailing the inadequacy of the rate provided.

INVESTMENT DEDUCTIONThis incentive is granted to encourage development in manufacturing industries. It is granted once at 100% in the first year of use to any person who incurs capital expenditure on construction of a new building and installation therein of new or old manufacturing machinery. It is also offered for the construction of a hotel that is certified to be an industrial building. Machinery that is ancillary to manufacture such as water pumps, electricity transformers, generators, machinery for disposal of effluent and enhancing cleanliness of the environment also qualify for investments deduction. Where the machinery is installed in an old building, only the machinery will qualify for the allowance and not the building.

SHIPPING INVESTMENT DEDUCTIONThis is granted at the rate of 40% on capital expenditure and only one such deduction can be allowed in respect of the same ship.To qualify the purchase must be that of a new unused power driven ship of more than 495 tonnes or on the purchase and subsequent refitting for the purpose of shipping business of a sued power driven ship of more than 495 tonnes.

Ministry: Ministry of Water and Natural Resources

Concerned Institutions: National Environment Management

Authority

Sector: Environment

Incentives: The Minister responsible for finance may, on the recommendation of the NEMA, propose Government tax and other fiscal incentives, disincentives or fees to induce or promote the proper management of the environment and natural resources or the prevention or abatement of environmental degradation.

Ministry: Ministry of Education, Science and Technology

Concerned Institutions: Ministry of Education, Science and Technology

Sector: Education

Incentives: Tax exemptions on building materials for educational infrastructure and equipment intended for training purposes.

Ministry: Ministry of Commerce and Tourism

Concerned Institutions: Kenya Tourist Development Corporation

Sector: Tourism

Incentives: • The Government, upon application, exempts import duty and VAT on the

following items and equipment for hotel construction and refurbishment: washing machines, kitchen ware, cookers, fridges and freezers, air conditioning systems, cutlery, televisions, carpets, furniture and linen and curtains. All other items and equipment required by hoteliers are only VAT exempt upon application for construction and refurbishment.

• Exemption from VAT - Materials and equipment for use in the construction or refurbishment of tourist hotels. All materials and equipment, excluding vehicles and goods for regular repair and maintenance, the purchase or importation of which is approved by the Permanent Secretary to the Treasury, for use in the construction or refurbishment of tourist hotels. This is subject to the production of such evidence as the Commissioner may require details of the quantity, quality and type of good for the project.








Authority

Sector: Environment




Sector: Education




Sector: Tourism











Authority

Sector: Environment




Sector: Education




Sector: Tourism





Ministry: Ministry Of Energy and Petroleum

Concerned Institutions: Energy Regulatory Commission

Sector: Energy

Incentives: • Biomass - fixed tariff not exceeding USD 0.8 per kilowatt-hour of electrical

energy supplied in bulk to the grid operator at the interconnection point.• Wind - fixed tariff not exceeding USD 0.12 per kilowatt-hour of electrical

energy supplied in bulk to the grid operator at the interconnection point.• Geothermal - A fixed tariff not exceeding USD 0.85 per kilowatt-hour of

electrical energy supplied in bulk to the grid operator at the interconnection point.

• Biogas- A fixed tariff not exceeding USD 0.8 per kilowatt-hour of electrical energy supplied in bulk to the grid operator at the interconnection point.

• Solar- A fixed tariff not exceeding USD 0.2 per Kilowatt-hour of electrical energy supplied in bulk to the grid operator at the connection point.

Ministry: The National Treasury

Concerned Institutions: Capital Markets Authority

Sector: Financial

Incentives: Preferential corporate tax treatment• For any newly listed company and approved under the Capital Markets Act

with at least 20% of it issued share capital listed, the tax shall be 27% for 3 years commencing immediately after the year of income following the date of such listing.

• A company that applies and is listed shall get a tax amnesty on its past omitted income, provided it makes a full disclosure of its assets and liabilities and undertakes to pay all its future due taxes.

• In the case of a newly listed company on any securities exchange approved under the Capital Markets Act with at least 30% of its issued share capital listed, the tax rate shall be 25% for the period of five years commencing immediately after the year of income following the date of such listing.

• For a newly listed company which has at least 40% of its issued share capital listed, the tax rate will be 20% for five years commencing immediately after the year of income following the date of such listing.

Reduction of Issuance and Listing Costs• Law amended to reduce the listing fees by 50% i.e. from 0.3% to 0.15% for

offers of equity.

Tax Deductibility on Issuance and Listing Costs• Exemption of stamp duty and value added tax on the transfer of listed

securities.

AN OVERVIEW OF INVESTOR INCENTIVES• Reduction of withholding tax applicable to dividend income arising from

investment on listed securities for both local and foreign investors. Foreign investors – 10-15%; local investors – 5%

• Expenditure of a capital nature incurred in that year of income by a person on legal costs and other incidental expenses relating to the authorization and issue of shares, debentures or similar securities offered for purchase by the general public were all made tax deductible expenses.

• Expenditure of a capital nature incurred in that year of income by a person, on legal costs and other incidental expenses, for the purposes of listing on any securities exchange operating in Kenya, without raising additional capital is tax deductible.

Tax Exemption for Insurance Companies • Investments by insurance companies on listed securities exempted from tax

arising out of capital gains on sale of shares.

E. Tax deductibility for credit rating companies. • Cost of rating made tax deductible in order to encourage credit rating.

Stamp duty and Value Added Tax (VAT) exemption on share capital• Exemption of stamp duty and value added tax on the transfer of listed

securities.

Amnesty on past omitted Income• Companies that apply and are listed shall get a tax amnesty on their past

omitted income, provided they make a full disclosure undertake to pay all their future due taxes.

Reduction of withholding tax• Reduction of withholding tax applicable to dividend income arising from

investment on listed securities for both local and foreign investors. Foreign 15% to 10%; local 5%

• Withholding tax rate on interest income arising out of fixed income securities such as bonds as well as bank deposits reduced to 15% and made a final tax. Investors at the NSE has increased from 150,000 in 1995 to 600,000 in 2006 to over1.2 million in 2009

Increased investment limits for foreign investors• Threshold of foreign shareholding of domestic companies increased from

60% to 75%.

Tax exemption on investment income from Collective Investment Schemes• Investment income of a pooled fund or other kind of investment consisting

of retirement schemes registered by the Commissioner is tax exempt;


Tax exemption for infrastructure securities (Asset Backed Securities and Infrastructure Bonds).• New and expanded share capital by listed companies or those seeking listing exempt from

stamp duty• Transfers of assets involved in the issuance of asset-backed securities will to be exempt from

stamp duty• Interest income accruing from all listed bonds used to raise funds for infrastructure and social

services,exempt from income tax, provided that the bonds shall have a maturity of at least three years.

• Interest income earned by investors who buy listed bonds as asset-backed securities for purposes of developing infrastructure exempted from income tax

• Exemption from the Stamp Duty Act (Cap 480) for any instrument that is certified to be in connection with the issue of asset-backed securities through a scheme approved by the Capital Markets Authority

Tax exemption for Real Estate Investment Trusts (REITS)• Instruments used in the transfer of property to listed property investment vehicles exempt

from stamp duty in order to encourage land consolidation and discourage non-productive land use

Tax exemption for Venture Capital Companies• Gain arising from trade in shares of a venture company earned by a registered venture capital

company, within the first ten years from the date of first investment in that venture company by the venture capital company, is tax exempt: provided that the venture company,has not been listed in any securities Exchange operating in Kenya for a period of more than two years.

Tax exemption for Dealer• Licensed dealers to enjoy tax benefits, as long as they turn their portfolios within 24 months

and according to laid down guidelines

Investor Compensation Fund• A amendment of the Capital Markets Act to recognize unclaimed dividends outstanding in

listed companies for more than seven years as income to Investor Compensation Fund; and to establish an Investor Compensation Fund Board to administer investor compensation fund.

Ministry: Ministry of Mining

Concerned Institutions: Ministry of Mining

Sector: Mining

Incentives:This is granted to a person who incurs capital expenditure on searching for, discovery, testing and winning access to minerals; expenses incurred in obtaining acquisition rights over deposits; expenses related to purchase of machinery and buildings together with the development, general administration and management prior to commencement of production. This is granted at the rate of 40% in the first year and 10% from the second to the seventh year. More details are outlined in the Mining Act.

Ministry: Ministry of Agriculture

Concerned Institutions: Ministry of Agriculture

Sector: Agriculture

Incentives:Farm Works Deductions (FWD)• This is granted at the rate of 33.33% per annum for three years to the owner or tenant of any

agricultural land who incurs capital expenditure on the construction of farm works. Farm works means labor quarters, farm house and any other immovable building necessary for the proper operation of the farm such as fences, dips, drains, dams, water and electrical supply works etc.


Concerned Institutions: The National Treasury, Ministryof Foreign Affairs and International Trade

Sector: Double Taxation Treaties

Incentives:Double Taxation treaties • Kenya has entered into double taxation treaties, which mitigate the tax chargeable on the income of

persons derived from a country in which they are resident. These include Canada, Denmark, Norway, Sweden, India, Zambia, United Arab Emirates, Kingdom and Germany.


Investment Guarantees• The Constitution of Kenya guarantees security of life and property.• Member of Multilateral Guarantee Agency covers foreign investors against non-commercial risks.• Member of International Centre for Settlement of International Disputes (ICSID) covers arbitration of

disputes outside of Kenya.• Member of Africa Trade Insurance Agency (ATIA) covers both commercial and non-commercial risks.• Protection of innovation and intellectual property to catalyze technological development on such

income in the countries from which it originates. In Kenya, the benefit of such unilateral relief is restricted to the employment income of Kenyan citizens.


Tax exemption for infrastructure securities (Asset Backed Securities and Infrastructure Bonds).• New and expanded share capital by listed companies or those seeking listing exempt from

stamp duty• Transfers of assets involved in the issuance of asset-backed securities will to be exempt from

stamp duty• Interest income accruing from all listed bonds used to raise funds for infrastructure and social

services,exempt from income tax, provided that the bonds shall have a maturity of at least three years.

• Interest income earned by investors who buy listed bonds as asset-backed securities for purposes of developing infrastructure exempted from income tax

• Exemption from the Stamp Duty Act (Cap 480) for any instrument that is certified to be in connection with the issue of asset-backed securities through a scheme approved by the Capital Markets Authority

Tax exemption for Real Estate Investment Trusts (REITS)• Instruments used in the transfer of property to listed property investment vehicles exempt

from stamp duty in order to encourage land consolidation and discourage non-productive land use

Tax exemption for Venture Capital Companies• Gain arising from trade in shares of a venture company earned by a registered venture capital

company, within the first ten years from the date of first investment in that venture company by the venture capital company, is tax exempt: provided that the venture company,has not been listed in any securities Exchange operating in Kenya for a period of more than two years.

Tax exemption for Dealer• Licensed dealers to enjoy tax benefits, as long as they turn their portfolios within 24 months

and according to laid down guidelines

Investor Compensation Fund• A amendment of the Capital Markets Act to recognize unclaimed dividends outstanding in

listed companies for more than seven years as income to Investor Compensation Fund; and to establish an Investor Compensation Fund Board to administer investor compensation fund.

Ministry: Ministry of Mining

Concerned Institutions: Ministry of Mining

Sector: Mining

Incentives:This is granted to a person who incurs capital expenditure on searching for, discovery, testing and winning access to minerals; expenses incurred in obtaining acquisition rights over deposits; expenses related to purchase of machinery and buildings together with the development, general administration and management prior to commencement of production. This is granted at the rate of 40% in the first year and 10% from the second to the seventh year. More details are outlined in the Mining Act.

Ministry: Ministry of Agriculture

Concerned Institutions: Ministry of Agriculture

Sector: Agriculture

Incentives:Farm Works Deductions (FWD)• This is granted at the rate of 33.33% per annum for three years to the owner or tenant of any

agricultural land who incurs capital expenditure on the construction of farm works. Farm works means labor quarters, farm house and any other immovable building necessary for the proper operation of the farm such as fences, dips, drains, dams, water and electrical supply works etc.


Concerned Institutions: The National Treasury, Ministry of Foreign Affairs and International Trade

Sector: Double Taxation Treaties

Incentives:Double Taxation treaties • Kenya has entered into double taxation treaties, which mitigate the tax chargeable on the income of

persons derived from a country in which they are resident. These include Canada, Denmark, Norway, Sweden, India, Zambia, United Arab Emirates, Kingdom and Germany.


Investment Guarantees• The Constitution of Kenya guarantees security of life and property.• Member of Multilateral Guarantee Agency covers foreign investors against non-commercial risks.• Member of International Centre for Settlement of International Disputes (ICSID) covers arbitration of

disputes outside of Kenya.• Member of Africa Trade Insurance Agency (ATIA) covers both commercial and non-commercial risks.• Protection of innovation and intellectual property to catalyze technological development on such

income in the countries from which it originates. In Kenya, the benefit of such unilateral relief is restricted to the employment income of Kenyan citizens.

46 | INVEST IN KENYA | KENINVEST

keninvestKenya Railways Headquarters

Block D, 4th Floor. Workshops Road, off Haile Selassie Avenue

P.O. Box 55704-00200 Nairobi, City Square

Tel: (+254) 730104200

[email protected]

investmentkenya.com

@KenInvest

EXPORT PROCESSING ZONE AUTHORITYAdministration Building, Viwanda Road, off Nairobi-Na- manga Highway, Athi River, Kenya,

P.O. Box 50563 - 00200, Nairobi Kenya

VoIP Lines: +254-20-760 60 40/3

Cellphone: (Safaricom): +254-713-051172/3;

(Airtel): +254-786-683222/+254-733-683222

Email: [email protected]

epzakenya.com

EXPORT PROMOTION COUNCIL1st and 16th Floor Anniversary Towers, University Way

P.O. Box 40247 - 00100, GPO Nairobi, Kenya

Tel: +254-20-222 8534-8

www.epckenya.org

Vision 2030 Delivery Secretariat

Kussco Centre, 2nd Floor, Upper Hill.

P.O. Box 52301 - 00200, Nairobi, Kenya

Tel: +254-20-272 20 30, +254-20-272 22 004

Fax: +254-20-809 13 53

vision2030.go.ke

KONZA technopolis development authority (kotda)Westlands, Capital West Business Centre 5th Floor, Opposite New Rehema HouseP.O. Box 30519 - 00100, Nairobi, Kenya

Email: [email protected]

konzacity.go.ke

KEY CONTACTSLAPSSET Corridor Development Authority (LCDA)Chester House Building. P.O. Box 45008 - 00100, Koinange Street, Nairobi

Tel: +254-(0)20-2218968

lapsset.go.ke

kENYA ASSOCIATION OF MANUFACTURERS86 Riverside lane, off Riverside drive, Riverside, Nairobi


Tel: +254-20-374 6022

Fax: +254-20-216 6658

Cell: +254-722-201 368

+254-734-646 005/4

KENYA NATIONAL CHAMBER OF COMMERCE AND INDUSTRY (KNCCD)Heritan House, Ground Floor, Woodlands Road, Off Arg- wings Kodhek Road, Opposite Department of DefenceHQs, Hurlingham.


kenyachamber.or.ke

www.investmentkenya.com

Kenyatta International Convention Centre, Lower Ground floor Suite 12P.O. Box 39097-00623, Nairobi Kenya contact Susan on; (+254) 721 701 333

[email protected]

Ultum Mega Limited is part of the Ultum Mega Group of Companies.

PREFACE This book was prepared by COMESA Regional Investment Agency in cooperation

with Kenya Investment Authority. It was written to give the busy executive a quick overview of the investment climate, taxation, types of business organisation, and

accounting practices in Kenya. Making decisions about foreign operations is complex and requires an intimate knowledge of a country’s commercial climate.

Companies doing business in Kenya, or planning to do so, are advised to get current and detailed information from experienced professionals. This book

reflects information current as of November 2014.

INVESTOR’S GUIDE TO KENYA In the preparation of this guide, every effort has been made to offer current, correct

and clearly expressed information. However, the information in the text is intended to afford general guidelines only. This publication is distributed with the understanding that

COMESA RIA is not responsible for the result of any actions taken on the basis of information in this publication, nor for any errors or omissions contained herein.

7Investor’s Guide To KENYA

CONTENTS1. Politics & General country information

2. economy

3. PoPulation and demoGraPhics

4. education and human resources

5. labor situation analysis

6. natural resources & GeoGraPhic Profile

7. licensinG and PermittinG

8. inVestment Promotion and Protection

frameWorK

9. sPecial economic Zones

10. international orGaniZations membershiP,

marKet access, and sPecial trade reGimes

11. infrastructure and cost of doinG business

12. banKinG and financial serVices

13. Quality of life

14. sectors

6

10

14

16

20

23

27

31

34

36

38

49

53

55

8 Investor’s Guide To KENYA

Politics & General Country Information

1


Politics & General Country Information

1


Kenya attained its independence in 1963 from britain and since then has maintained a diversified economy in which the private sector has always played a strong role. Today, Kenya’s political system is characterized by a democratic republic government and numerous political parties, major parties including the National Alliance (TNA), the Orange Democratic Movement (ODM), the united republic Party (urP) and the Wiper democratic Party (WPD). These parties are organized in two major coalitions-Jubi-lee, the ruling and Coalition for Reform and Democracy (CORD), the opposition.

The 2010 Kenyan Constitution brought in numerous changes to Kenya’s political system including devolution according to which two levels of government were created: the Central Government and 47 county governments. Unlike the federal system in which sovereignty is constitutionally divided between the Federal Government and the states, the devolution system in Kenya still maintains a unitary political concept as a result of the distribution of functions between the two levels of government. Devolution is only autonomous in implementation of these distinct functions. While the national Government has the three main arms of the Government, county governments have got only two arms: the county executive headed by the Governor and the county

Assembly (Legislature) made of Members of County Assemblies (MCAs) and headed by the Speaker. Each MCA represents a ward which constitutes a single member constituency.

For accountability purposes of both levels of government, the Constitution introduced more checks and balances. The bi-cameral-Parliament consisting of the Senate and the National Assembly has much discretion on budgetary allocations to county Governments. the commission of revenue allocation makes recommendations to the Senate on revenue allocation criteria. the constitution bars the national Government from intruding wilfully with county government roles and functions unless approved by the Parliament.

1.2. Structure of Government and Checks & BalancesTraditionally the power of the Kenyan Government has been divided into three main arms: the Executive, Legislature and Judiciary. The 2010 Constitution includes a greater separation of powers between the Legislature, Executive and Judiciary, the introduction of checks and balances on the Executive, and devolution of power on local matters to the 47 counties.

1. Politics & General Country Information1.1. General information

Official Name republic of Kenya

Form of state Unitary stated with Multi party democracy

Surface Area 582,646 km2

Population 45,010,056 (2014 est.) with population growth rate at 2.11 per cent urban population (% of the total) 24.8 Per cent Kenya’s middle class (% of population) 36.1 (2012)

Density 77.9 people per Km2

Official Language Swahili is the national language and English & Kiswahili are official languages. In addition, Kenya’s 42 communities have their own languages

Climate Kenya lies on both sides of the equator and enjoys varied climate ranging from tropical to temperate. The central highland and Rift Valley have the most pleasant climate, with temperatures ranging from the low teens to the mid-twenties Celsius.

Religion Christian, Muslims, indigenous African and others

Administration 47 counties

Time Zone Gmt +3

Currency 1 Kenya Shillings is equal to 100 cents

GDP at current price USD usd 55.2 b (2013)

Per Capita GDP USD usd 1,246 (2013)

GDP Growth 5.7 (2013)

Total Exports Volume usd 5.8b (2013)

Total Imports Volume usd 16.4b (2013)

Human development Index 0.519 (2013)

Standard and Poor rating b+ (stable)

Moody’s Rating b1 (stable)


1.3. Legislative BranchThere is a bicameral parliament consisting of the Senate and the national assembly. the national assembly consists of 290 representatives from single member constituencies, 47 women elected from the counties and twelve nominated members to represent special interests. the roles of the national assembly are to: exercise oversight of state organs, national revenue and expenditure, appropriate funds for expenditure by the national government, and enact laws that govern the country.

the senate consists of 47 members, one elected from each county and 16 women nominated by the various parties, 2 youth representatives, and 2 representatives of persons with disabilities. The roles of the Senate are: to protect the interests of counties, to enact laws that affect counties, and to provide oversight of state officers.

1.4. Judicial BranchThe Judiciary is repositioning itself within the context of the 2010 Kenyan Constitution. The Judiciary is involved in a major transformation programme which includes the competitive recruitment of the Chief Justice, other judicial offices, as well as administrative and paralegal staff. The major reorganisation of the institution is currently underway to enable it to fulfil its consti-tutional mandate under article 159 and meet public expectation. It includes the hierarchy detailed below.

The Supreme Courtthe supreme court hears and determines cases relating to presidential elections, hears appeals on cases that have been concluded by the court of appeal, issues advisory opinions on matters concerning county governments in any case involving the interpretation or application of the constitution and in matters of general public importance. Furthermore, the Supreme Court hears appeals from any other court or tribunal as prescribed by national legislation.

The Court of Appealthe court of appeal is established under article 164 of the Constitution and consists of a number of judges, being not fewer than 12, as prescribed by an Act of Parliament, and is organized and administered in the manner prescribed by an Act of Parliament. the court comprises of a President of the court of Appeal who is elected by the judges of the Court of Appeal from among themselves. The Court of Appeal has jurisdiction to hear appeals from the High Court and any other court or tribunal as prescribed by an act of Parliament.

The High CourtThe High Court is established under article 165 and consists of a number of judges to be prescribed by an Act of Parliament. The High Court has unlimited original jurisdiction in criminal and civil matters.

The High Court does not have jurisdiction with respect to matters reserved for the exclusive jurisdiction of the supreme court under the Constitution or falling within the jurisdiction of the courts contemplated in article 162 (2). The High Court has supervisory jurisdiction over subordinate courts and over any person, body or authority exercising a judicial or quasi-judicial function, but not over the Superior Court.

Subordinate Courtssubordinate courts are provided for under article 169 of the Constitution and include:

• The Magistrates Courts;• The Kadhis’ Courts.

Martial Courtssection 84 of the Armed Forces Act gives court martial power to try any person subject to the Act for any offence which under the Act is triable by Martial Courts, and to award for such an offence any punishment provided by the act for that offence.

Tribunalstribunals in Kenya are administrative bodies established by acts of Parliament whose purpose is to exercise judicial and quasi-judicial functions. The members of a tribunal are empowered to listen to and rule on specific matters as set out in the statute that establishing them. In exercising its powers, tribunals must adhere to the same standards as ordinary courts and the rule of law. Further, tribunals are subject to supervision by the High Court. A party who is dissatisfied with the outcome of a tribunal may appeal to the High Court.

ArbitrationArbitration is recognized in Kenya in article 159 of the Constitution as one of the ways of settling disputes. The constitution promotes the use of alternative forms of dispute Resolution (ADR) including reconciliation, mediation, arbitration and traditional dispute resolution mechanisms to the extent that it does not contravene the Bill of Rights and is not repugnant to justice and morality or results in outcomes that are repugnant to justice or morality; or is inconsistent with the Constitution or any written law. The other statutes apart from the Constitution that govern the process are The Arbitration Act Cap 1995, The arbitration rules the civil Procedure act cap 29 and the civil Procedure rules 2010.

the chartered institute of arbitrators and the nairobi centre for international arbitrators promote and facilitate the determination of disputes by arbitration and other forms of adr in the country. The Law Society of Kenya is in the process of building an arbitration centre in Nairobi which will have a court room and arbitration rooms among other amenities for purposes of ADR.

1.5. Executive Branchexecutive authority derives from the people of Kenya and comprises the President, the deputy President and the rest of the cabinet. the President is the head of the state and Government and also Commander-in-Chief of Kenya’s Defence Forces. Any citizen by birth qualifies for nomination as a presidential candidate and can only be elected for two five-year terms. A presidential candidate is declared president if the candidate receives more than half of all votes cast in an election and must receive at least of 25 percent of the valid votes cast in more than half of the counties. In case there is no outright winner in first round, a fresh election is held and the candidate who receives the most votes is declared President elect.

the deputy President is the principal assistant to the President and deputizes the President in the execution of his or her functions. the constitution requires that each candidate in


the presidential election to nominate a person as a candidate for deputy President. the nominated candidate is declared deputy President once the presidential candidate is declared President elect. the cabinet consists of the President, the Deputy President, and the Attorney General and eighteen Cabinet Secretaries. Unlike before, the cabinet secretaries are not members of the parliament.

1.6. Electoral System & Processelections in Kenya are done at the national level to elect the Head of State – the President, a Legislature and the county

governments. The election of the President, the Legislature and county governments are held concurrently every 5 years. the independent electoral and boundaries commission (iebc) established under article 88 of the constitution of Kenya has the mandate of conducting or supervising referenda and elections of any elective body or office established by the Kenyan constitution, and any other elections as prescribed by an act of Parliament.


the presidential election to nominate a person as a candidate for deputy President. the nominated candidate is declared deputy President once the presidential candidate is declared President elect. the cabinet consists of the President, the Deputy President, and the Attorney General and eighteen Cabinet Secretaries. Unlike before, the cabinet secretaries are not members of the parliament.

1.6. Electoral System & Processelections in Kenya are done at the national level to elect the Head of State – the President, a Legislature and the county

governments. The election of the President, the Legislature and county governments are held concurrently every 5 years. the independent electoral and boundaries commission (iebc) established under article 88 of the constitution of Kenya has the mandate of conducting or supervising referenda and elections of any elective body or office established by the Kenyan constitution, and any other elections as prescribed by an act of Parliament.


Economy2


2.1. General Economic InformationKenya’s economy is the largest in east and Central Africa and has experienced considerable growth in the past few years, driven by several key factors. The re-based Gross Domestic Product (GDP) figures of USD 55.2 billion places Kenya as the fifth largest economy in Sub-Sahara Africa and ninth in Africa. Although the economy remains small by global standards, it is distinguished from those of most of african countries by the fact that it is one of the most diversified and advance. The average annual growth rate of gross domestic product (GDP) in the 2000s was 3.6 percent, an increase from the 1990s average of 2.2 percent. Currently, the average growth rate stands at 4.0 percent. The

World Bank had projected a growth rate of 5.1 percent in 2014 before the national accounts were rebased

Key sectors of Kenya’s economy include Agriculture, manufacturing, real estate and services. Although agriculture remains the mainstay of the economy at 25.3 percent of GdP, manufacturing contribution to GDP has been increasing significantly over the years. Manufacturing which has been strong in processing agricultural products is the second largest contributor to GdP at 13 per cent. the performance of these sectors over the years has greatly impacted on the growth of the Kenya economy.

2.2. Government Policies

Fiscal PolicyIt’s the responsibility of the National Treasury to develop and maintain sound fiscal and monetary policies that facilitate socio - economic development. Fiscal policy in Kenya is being informed by the priorities of the in the Vision 2030, emerging global and domestic challenges as well as the transition to a devolved system of government. Substantial amount of financial resources is required to fund the key projects and other programs under the Vision as well as the county governments. As result, the Government has been undertaking measures aimed at expanding the revenue base and increasing tax compliance through integration of technology in revenue collection. The Government purposes to bridge the financing gap by contracting loans mainly on concessional terms, conscious of ramifications of imprudence in debt management

Monetary Policy The Central Bank of Kenya principal object is formulation and implementation of monetary policy directed to achieving and maintaining stability in the general level of prices. The aim is to achieve stable prices – that is low inflation - and to sustain the value of the Kenya shilling. It involves the control of liquidity circulating an economy to levels consistent with growth and price objectives set by the Government

Major Tools the Bank Uses to Implement Monetary PolicyOpen market operations: Through open market operations, the Bank buys or sells securities in the secondary market in order to achieve a desired level of Bank reserves. Alternatively, the Bank injects money into the economy through buying securities in exchange for money stock

Discount window operations: The Bank, as lender of last resort, may provide secured short-term loans to commercial banks on overnight basis at punitive rates, thus restricting banks to seek funding in the market resorting to Central Bank funds only as

a last solution. The discount rate is set by the Central Bank to reflect the monetary policy objectives.

Reserve requirements: The Central Bank is empowered by the law to retain a certain proportion of commercial banks’ deposits to be held as non-interest bearing reserves at the Central Bank. An increase in reserve requirements restricts commercial banks’ ability to expand bank credit and the reverse is regarded as credit easing.

2.3. Sectoral Economic IndicatorsAgriculture is the largest contributor to Kenya’s GDP contributing around 25.3 percent to the economy. It forms 65% of Kenya’s total exports and provides 18% of formal employment. Agriculture output grew by 2.9% in 2013 against a growth of 4.2 per cent in 2012 as a result of depressed rainfall reducing production of maize, beans, cut flowers and fruits. Kenya’s agricultural exports include traditional agricultural exports (tea and coffee) and non-traditional agricultural exports (horticulture)

The manufacturing sector has a high potential for employment creation, a stimulus for growth of other sectors such as agriculture and offering significant opportunities for export expansion. Manufacturing sector accounted for 8.9 per cent of the Gross domestic Product (GdP) and provided 12.4 per cent of employment in the formal sector in 2013. the sector recorded a positive growth in real output of 4.8 per cent in 2013 compared to 3.2 per cent in 2012. The volume of output grew by 2.6 per cent during the same period. This is partly associated with the political stability that prevailed after the March 2013 general elections which increased investor confidence. Manufacturing of non-food products was mainly propelled by increased manufacture of rubber products, fabricated and basic metals, and furniture and pharmaceutical products.

Transport and communication recorded an improved growth of 6.0 per cent in 2013 compared to a revised growth of 4.7 per cent in 2012. The enhanced growth in the sector was mainly on account of an accelerated growth in post and telecommunica-tion which expanded by 9.3 per cent while transport and storage

2. Economy

Indicator 2009 2010 2011 2012 2013

Economic growth 2.7 5.8 4.4 4.6 4.7

GdP (usd billion) 30.5 32.2 33.6 40.7 44.2

Per capita (usd m) 767.8 787.1 799.1 942.5 1055.4

Source: Economic Survey 2014


Sector Contributions to GDP (%)

Sector 2010 2011 2012 2013

Agriculture and Forestry 21.2 23.8 24.6 25.3

Manufacturing 9.8 9.6 9.5 8.9

Construction 4.2 4.1 4.2 4.4

Wholesale and Retail Trade 10.1 10.5 10.5 10.2

Transport and Communication 10.0 10.0 9.6 9.1

Financial Services 5.6 6.3 5.2 4.8

Public Services 5.5 5.0 5.5 6.7

Source: Kenya National Bureau of Statistics (KNBS)

grew by 3.6 per cent during the review period. Air and land transport sub-sectors recorded the most significant growths of 3.8 per cent and 4.0 per cent, respectively within the transport in 2013. The communication sector expansion was attributed to the continued rapid expansion in mobile telephony and related service activities including mobile broadband utilization.

Financial intermediation recorded an overall growth of 7.2 per cent in 2013 compared to 6.5 per cent in 2012. Though uncertainties associated with the general election led to low credit demand at begging of 2013, with the peaceful conclusion of March 2013 general election, the demand for credit greatly improved. Interest rates recorded a mixed movement over the years based on the Central Bank’s Rate.

Construction; Increased spending on infrastructural development by the Government and improved private sector construction activities in the country has seen the construction sector maintain

an upward growth momentum. The sector registered an overall growth of 5.5 per cent in 2013 compared to 4.8 per cent in 2012. Cement consumption, a key indicator in the construction industry grew by 6.9 per cent during the period under review from 3,937.3 metric tonnes to 4,266.5 metric tonnes in 2013. the commercial banks’ credit extended to the sector increased by 2.3 per cent in 2013

hotel and restaurants sector recorded a contraction of 4.5 per cent in 2013 compared to a growth of 2.6 per cent in 2012. The sector was faced with both external and internal challenges that impacted negatively on its performance. The challenges included a sluggish growth in tourist source markets, a fire at Jomo Kenyatta International Airport (JKIA) which caused a temporary disruption, and insecurity incidents. Visitor arrivals in the second half of the year fell significantly impacting negatively on the sector leading to a decline of 11.2 per cent from 1,710.8 thousand in 2012 to 1,519.6 thousand in 2013.

2.4. InflationThe country’s macroeconomic environment has been characterized by high and low inflation since independence. High levels of inflation have increased cost of living, including posing a real risk of economic slump and a rise in poverty levels due to decline in purchasing power. Between the years 1961 to 1973 the inflation rate in Kenya was below 10 per cent. From 1987, inflation maintained an upward trend reaching an all-time high of 49.98 in 1993. The following two years saw inflation fall to a low of 1.55 per cent level in 1995 last reached in 1960s. Another period of inflation stability was witnessed from1996 to

2007 where inflation averaged at 8.8 per cent. Over the years the movement in inflation level in Kenya has been influenced by both internal and external forces including changes in taxation, changes in weather patterns which affect agricultural production and prices of petroleum and its products. the overall annual average inflation rate declined from 9.4 percent in 2012 to 5.7 percent in 2013, largely reflecting the impact of monetary policy measures in place. The increase was attributed to a notable rise in food prices in September 2013 following the application by some traders of Value Added Tax (VAT) on non VAT-able food items.

2.5. Foreign ExchangePrior to 1993, Kenya employed foreign exchange controls where all foreign exchange transactions were controlled by the Central Bank of Kenya (CBK). Kenya Shilling exchange rate remained fixed at Kshs. 7.143 to the US dollar until 1975. Between October 1975 and December 1982, the Kenya shilling was pegged to the special drawing rights (SDR), calculated from a basket of currencies and considered to be more stable than the single currency peg. By early 1990s, there was a lot of pressure from donors to liberalize the economy as one of the precondition for development loans and grants. Kenya adopted the flexible

exchange rate regime in October 1993 and since then the shilling has remained largely market driven, with the monetary authorities or the CBK only intervening to correct erratic movements of the exchange rate.

2.6. Public DebtKenya has been leveraging its ability to borrow in order to run increasingly large fiscal deficits in the past few years. Deficit financing rose from 4.2 percent of GDP in 2010/11 to an estimated 6.6 percent of GDP in fiscal 2013/14. To reduce pressure on domestic lending rates, the government issued a USD 2 billion

Recent Inflation Rates

Year 2009 2010 2011 2012 2013

Inflation Rate 10.5 4.1 14.1 9.4 5.7

Source: KenInvest


Eurobond in June 2014 to finance infrastructural projects in energy and roads. Gross public debt increased from KSh 1,793 billion (49.8 percent of GdP) at the end of december 2012 to Ksh 2,113 billion (52.6 percent) at the end of december 2013. external Debt in Kenya averaged 533.72 KSh billion from 2000 until 2014. Most of Kenya’s public external debt remains on concessional terms, although its commercial component increased to about 15 percent by June 2014 with the Eurobond taken into account. most of the debt has been used for infrastructure development specifically the construction of a standard gauge railway across the country, geothermal electricity generation and a new port in lamu.

2.7. Balance of Paymentsover the years Kenya has recorded trade deficit as the amount of imports outweigh domestic import. In 2013, the trade deficit

continued to widen, deteriorating by 6.3 per cent attributed to 3.0 per cent export decline while imports increased by almost an equivalent margin. The leading export earners in Kenya has remained tea, horticulture, articles of apparel and clothing accessories and coffee, collectively accounting for 51.5 per cent of total export earnings. Petroleum products, industrial machinery, road motor vehicles and iron and steel remain the leading imports jointly accounting for 45 per cent of the total import bill.

contrarily the overall balance of payment continued to record surplus though the surplus declined in 2013 by 3.9 per cent. The overall boP surplus is attributed to increased short term capital flows and surplus in foreign direct investment account. Similarly, The current account balance worsened by 14.7 per cent to record a deficit of USD 4,789.5 million in 2013.

Global Credit Rating



2.8. FDI According to the us department of state 2014 investment climate statement, the recent focus on extractive resources, including oil, gas, and minerals is creating a paradigm shift in the types of FDI moving into Kenya – from market seeking FDI to resource seeking FDI. The implementation of key economic reforms is contributing to a structural transformation. These reforms include the policy and legal framework for Public Private Partnerships (PPPs) enacted in 2012 and the passage of the legislative framework for establishment of Special Economic Zones.

FDI is a significant source of economic development as it provides an inflow of foreign capital and funds as well as enhancing transfer of skills and technology and expanding job

opportunities. According to UNCTAD, FDI inflows to Kenya almost double from usd 259 million in 2012 to usd 514 million in 2013mostly driven discoveries of oil, natural gas and other minerals; and manufacturing. Other sectors that are major recipient of FDI include financial services, ICT and business support services. Some of major multinationals operating in Kenya includes Delmonte, Uniliver, Google, Microsoft, Barclays Bank,Tullow oil and BAT among others. Traditionally the UK, US, India, Mauritius, South Africa and Japan have been the major source of FDI in Kenya. However, recently Kenya has recorded growth in FDI inflows from other countries such as China, Belgium, Nigeria, France, and Germany among others.

flows and surplus in foreign direct investment account. similarly, The current account balance worsened by 14.7 per cent to record a deficit of USD 4,789.5 million in 2013.

FDI

Country 2009 2010 2011 2012 2013

Kenya (USD million) 115 178 335 259 514

Total Imports and Exports

2010 2011 2012 2013

Exports (Ksh million) 409,794 512,604 527,847 502,287

Imports (Ksh million) 947,206 1,300,749 1,374,587 1,413,316

Balance of Trade (537,412) (788,145) (856,740) (911,029)

Source: KNBS economic survey 2014

Imports and Exports by Main Product

Exports (Ksh million) 2010 2011 2012 2013

Tea 91,617 102,236 101,441 104,648

Horticulture 72,092 83,331 81,129 89,339

Articles of Apparel and Clothing Accessories 15,561 22,260 20,676 24,379

Coffee, unroasted 16,244 20,864 22,271 16,328



Eurobond in June 2014 to finance infrastructural projects in energy and roads. Gross public debt increased from KSh 1,793 billion (49.8 percent of GdP) at the end of december 2012 to Ksh 2,113 billion (52.6 percent) at the end of december 2013. external Debt in Kenya averaged 533.72 KSh billion from 2000 until 2014. Most of Kenya’s public external debt remains on concessional terms, although its commercial component increased to about 15 percent by June 2014 with the Eurobond taken into account. most of the debt has been used for infrastructure development specifically the construction of a standard gauge railway across the country, geothermal electricity generation and a new port in lamu.

2.7. Balance of Paymentsover the years Kenya has recorded trade deficit as the amount of imports outweigh domestic import. In 2013, the trade deficit

continued to widen, deteriorating by 6.3 per cent attributed to 3.0 per cent export decline while imports increased by almost an equivalent margin. The leading export earners in Kenya has remained tea, horticulture, articles of apparel and clothing accessories and coffee, collectively accounting for 51.5 per cent of total export earnings. Petroleum products, industrial machinery, road motor vehicles and iron and steel remain the leading imports jointly accounting for 45 per cent of the total import bill.

contrarily the overall balance of payment continued to record surplus though the surplus declined in 2013 by 3.9 per cent. The overall boP surplus is attributed to increased short term capital flows and surplus in foreign direct investment account. Similarly, The current account balance worsened by 14.7 per cent to record a deficit of USD 4,789.5 million in 2013.

Global Credit Rating



2.8. FDI According to the us department of state 2014 investment climate statement, the recent focus on extractive resources, including oil, gas, and minerals is creating a paradigm shift in the types of FDI moving into Kenya – from market seeking FDI to resource seeking FDI. The implementation of key economic reforms is contributing to a structural transformation. These reforms include the policy and legal framework for Public Private Partnerships (PPPs) enacted in 2012 and the passage of the legislative framework for establishment of Special Economic Zones.

FDI is a significant source of economic development as it provides an inflow of foreign capital and funds as well as enhancing transfer of skills and technology and expanding job

opportunities. According to UNCTAD, FDI inflows to Kenya almost double from usd 259 million in 2012 to usd 514 million in 2013mostly driven discoveries of oil, natural gas and other minerals; and manufacturing. Other sectors that are major recipient of FDI include financial services, ICT and business support services. Some of major multinationals operating in Kenya includes Delmonte, Uniliver, Google, Microsoft, Barclays Bank,Tullow oil and BAT among others. Traditionally the UK, US, India, Mauritius, South Africa and Japan have been the major source of FDI in Kenya. However, recently Kenya has recorded growth in FDI inflows from other countries such as China, Belgium, Nigeria, France, and Germany among others.

flows and surplus in foreign direct investment account. similarly, The current account balance worsened by 14.7 per cent to record a deficit of USD 4,789.5 million in 2013.

FDI

Country 2009 2010 2011 2012 2013

Kenya (USD million) 115 178 335 259 514

Total Imports and Exports

2010 2011 2012 2013

Exports (Ksh million) 409,794 512,604 527,847 502,287

Imports (Ksh million) 947,206 1,300,749 1,374,587 1,413,316

Balance of Trade (537,412) (788,145) (856,740) (911,029)


Imports and Exports by Main Product

Exports (Ksh million) 2010 2011 2012 2013

Tea 91,617 102,236 101,441 104,648

Horticulture 72,092 83,331 81,129 89,339

Articles of Apparel and Clothing Accessories 15,561 22,260 20,676 24,379

Coffee, unroasted 16,244 20,864 22,271 16,328



Population and Demographics

3


3. Population and Demographics3. Population and DemographicsIn terms of age, the Kenya population figures indicates there are more people in the younger age bracket than the elderly, with the age bracket of 0 to 15 making up a huge percentage.

at the time of this survey, the population statistics reveal more than two out of every five persons were found to be under the age of 15 - making about 43% of the total Kenya population. Going by the current trend it’s expected that by the year 2030, Kenya population will grow to about 65.9 million.

General Population Statistics

Population 45,010,056 (2014 est.)

Age Structure • 0-14 years: 42.1% (male 9,494,983/female 9,435,795) • 15-24 years: 18.7% (male 4,197,382/female 4,202,399) • 25-54 years: 32.8% (male 7,458,665/female 7,302,534) • 55-64 years: 3.7% (male 751,296/female 910,523) • 65 years and over: 2.8% (male 548,431/female 708,048) (2014

est.)

Dependency Ratios • Total dependency ratio: 81 % • Youth dependency ratio: 76.1 % • Elderly dependency ratio: 4.9 % • Potential support ratio: 20.4 (2014 est.)

Population Growth Rate 2.11% (2014 est.)

Birth Rate 28.27 births/ 1,000 population (2014 est.)

Death Rate 7 deaths/ 1,000 population (2014 est.)

Net Migration Rate -0.22 migrant(s)/1,000 population (2014 est.)

Urbanization • Urban population: 24.8% of total population (2011) • Rate of urbanization: 4.36% annual rate of change (2010-15

est.)

Major Cities - Population Nairobi (capital) 3.363 million; Mombassa 972,000 (2011)

Sex Ratio • 0-14 years: 1.01 male(s)/ female • 15-24 years: 1 male(s)/ female • 25-54 years: 1.02 male(s)/ female • 55-64 years: 1 male(s)/ female • 65 years and over: 0.79 male(s)/ female • Total population: 1 male(s)/ female (2014 est.)

Life Expectancy At Birth • Total population: 63.52 years • Male: 62.06 years • Female: 65.01 years (2014 est.)

Total Fertility Rate 3.54 children born/woman (2014 est.)

Contraceptive Prevalence Rate 45.5% (2008/09)


3. Population and Demographics3. Population and DemographicsIn terms of age, the Kenya population figures indicates there are more people in the younger age bracket than the elderly, with the age bracket of 0 to 15 making up a huge percentage.

at the time of this survey, the population statistics reveal more than two out of every five persons were found to be under the age of 15 - making about 43% of the total Kenya population. Going by the current trend it’s expected that by the year 2030, Kenya population will grow to about 65.9 million.

General Population Statistics

Population 45,010,056 (2014 est.)

Age Structure • 0-14 years: 42.1% (male 9,494,983/female 9,435,795) • 15-24 years: 18.7% (male 4,197,382/female 4,202,399) • 25-54 years: 32.8% (male 7,458,665/female 7,302,534) • 55-64 years: 3.7% (male 751,296/female 910,523) • 65 years and over: 2.8% (male 548,431/female 708,048) (2014

est.)

Dependency Ratios • Total dependency ratio: 81 % • Youth dependency ratio: 76.1 % • Elderly dependency ratio: 4.9 % • Potential support ratio: 20.4 (2014 est.)

Population Growth Rate 2.11% (2014 est.)

Birth Rate 28.27 births/ 1,000 population (2014 est.)

Death Rate 7 deaths/ 1,000 population (2014 est.)

Net Migration Rate -0.22 migrant(s)/1,000 population (2014 est.)

Urbanization • Urban population: 24.8% of total population (2011) • Rate of urbanization: 4.36% annual rate of change (2010-15

est.)

Major Cities - Population Nairobi (capital) 3.363 million; Mombassa 972,000 (2011)

Sex Ratio • 0-14 years: 1.01 male(s)/ female • 15-24 years: 1 male(s)/ female • 25-54 years: 1.02 male(s)/ female • 55-64 years: 1 male(s)/ female • 65 years and over: 0.79 male(s)/ female • Total population: 1 male(s)/ female (2014 est.)

Life Expectancy At Birth • Total population: 63.52 years • Male: 62.06 years • Female: 65.01 years (2014 est.)

Total Fertility Rate 3.54 children born/woman (2014 est.)

Contraceptive Prevalence Rate 45.5% (2008/09)


Education and Human Resources

4


4.1. General Education InformationKenya views Education and Training (E&T) as the primary means of upward social mobility, national cohesion and socioeconomic development. Kenya Vision 2030 places great emphasis on the link between E&T and the labour market, the need to create en-trepreneurial skills and competencies, mainstreaming natural values in E&T and strong public and private partnerships. The Government is further committed to achieving international development commitments such as the millennium development Goals (mdGs) and education for all (efa).the constitution has provisions for children’s right to free and compulsory basic education, quality services and access to educational institutions and facilities for all persons including those with disabilities, and from minorities and marginalized groups.

Nationally, some of the challenges facing the sector in the context of Kenya’s transformation to Vision 2030 include meeting the human resource requirements for a rapidly changing and more diverse economy; ensuring that the education system meets high quality standards and that its contents are relevant to the needs of the economy and society; raising the standards of the regions that lag behind in school enrolment to bring them at par with other leading areas.

To address these challenges and many more, the government is implementing key programmes going forward which include;

Mainstreaming of Early Childhood Development Education (ECDE), Curriculum Review and Reform, Integrating Information, Communication and Technology into Teaching and Learning; Establishment of Education Management Information System (emis) centres and establishment technical, Vocational Education and Training (TVET) Infrastructure and Equipment.

4.2. University Education and statisticsKenya’s university education system continues to evolve through on-going reforms and other emerging issues in the provision of education. Challenges and opportunities created by the in-ternationalization and cross-border university education are already impacting on the education sector. E-learning and other forms of Open and Distance Learning modes of provision have increased, leading to the need to be more vigilant in quality assurance. As result, the relevant institutions are formulating appropriate regulations, standards and guidelines to deal with each emerging development effectively. Increased access and mobility of students nationally and internationally calls also for harmonization of credit accumulation and transfer systems to enhance free flow of students.

accredited universities in Kenya include 22 public universities, 9 public constituent colleges, 17 private chartered universities, 5 private university constituent colleges and 13 institutions with letter of interim authority.

4.3. International Primary and Secondary Schools

International Schools in Nairobi• InternationalSchoolofKenya(ISK)

Address: PO Box 14103 00800 nairobi, Kenya Tel: +254 20 209 1308/ 9Tuition Rates: USD 11,950 – USD 22,950 per year

The ISK Academic Curriculum provides English language education for students in Pre-Kindergarten to Grade 12. Kiswahili is taught within the context of the Kenya units of inquiry. isK is fully accredited by the cois and msa.

• BraeburnSchoolsAddress: PO Box 45112 00100 nairobi, Kenya Tel: +254 20 501 8000Tuition Rates: Inquire at school

There are several branches of the co-educational Braeburn School in Nairobi. They follow the British English curriculum

with testing for the IGCSE and A-level examinations. The school is accredited by cois.

• GEMS Cambridge International School (About GEMSCIS-Nairobi)Address: Magadi Road, Karen/ Langata, PO Box 15593 00509 nairobi, KenyaTel: +254 20 266 9200, +254 708 989569, +254 739 891623 Tuition Rates: Inquire at school

GEMS is an English-speaking school from Foundation Stage to Year 13. It offers the IGCSE exams, as well as British-style A-levels for graduates. Uniforms are required.

• HillcrestInternationalSchoolAddress: Langata Rd. nairobi, KenyaTel: + 254 20 806 7783/ 4, + 254 20 266 2137/ 8 Tuition Rates: Inquire at school

Modeled after the UK school system in the UK, the language of instruction is English. Students are 13 years old on arrival

4.Education and Human Resources

Student Enrolment in Kenya

2010/11 2011/12 2012/13 2013/14

Male Female Male Female Female Female Male Female

Public universities 85,931 53,839 94,358 63,558 109,821 85,707 167,046 109,303

Private Universities 21,793 16,055 23,342 17,002 25,615 19,408 26,139 22,072

Total 107,724 69,894 117,700 80,560 135,436 105,115 193,185 131,375

Source: Commission for Higher Education


4.1. General Education InformationKenya views Education and Training (E&T) as the primary means of upward social mobility, national cohesion and socioeconomic development. Kenya Vision 2030 places great emphasis on the link between E&T and the labour market, the need to create en-trepreneurial skills and competencies, mainstreaming natural values in E&T and strong public and private partnerships. The Government is further committed to achieving international development commitments such as the millennium development Goals (mdGs) and education for all (efa).the constitution has provisions for children’s right to free and compulsory basic education, quality services and access to educational institutions and facilities for all persons including those with disabilities, and from minorities and marginalized groups.

Nationally, some of the challenges facing the sector in the context of Kenya’s transformation to Vision 2030 include meeting the human resource requirements for a rapidly changing and more diverse economy; ensuring that the education system meets high quality standards and that its contents are relevant to the needs of the economy and society; raising the standards of the regions that lag behind in school enrolment to bring them at par with other leading areas.

To address these challenges and many more, the government is implementing key programmes going forward which include;

Mainstreaming of Early Childhood Development Education (ECDE), Curriculum Review and Reform, Integrating Information, Communication and Technology into Teaching and Learning; Establishment of Education Management Information System (emis) centres and establishment technical, Vocational Education and Training (TVET) Infrastructure and Equipment.

4.2. University Education and statisticsKenya’s university education system continues to evolve through on-going reforms and other emerging issues in the provision of education. Challenges and opportunities created by the in-ternationalization and cross-border university education are already impacting on the education sector. E-learning and other forms of Open and Distance Learning modes of provision have increased, leading to the need to be more vigilant in quality assurance. As result, the relevant institutions are formulating appropriate regulations, standards and guidelines to deal with each emerging development effectively. Increased access and mobility of students nationally and internationally calls also for harmonization of credit accumulation and transfer systems to enhance free flow of students.

accredited universities in Kenya include 22 public universities, 9 public constituent colleges, 17 private chartered universities, 5 private university constituent colleges and 13 institutions with letter of interim authority.

4.3. International Primary and Secondary Schools

International Schools in Nairobi• InternationalSchoolofKenya(ISK)

Address: PO Box 14103 00800 nairobi, Kenya Tel: +254 20 209 1308/ 9Tuition Rates: USD 11,950 – USD 22,950 per year

The ISK Academic Curriculum provides English language education for students in Pre-Kindergarten to Grade 12. Kiswahili is taught within the context of the Kenya units of inquiry. isK is fully accredited by the cois and msa.

• BraeburnSchoolsAddress: PO Box 45112 00100 nairobi, Kenya Tel: +254 20 501 8000Tuition Rates: Inquire at school

There are several branches of the co-educational Braeburn School in Nairobi. They follow the British English curriculum

with testing for the IGCSE and A-level examinations. The school is accredited by cois.

• GEMS Cambridge International School (About GEMSCIS-Nairobi)Address: Magadi Road, Karen/ Langata, PO Box 15593 00509 nairobi, KenyaTel: +254 20 266 9200, +254 708 989569, +254 739 891623 Tuition Rates: Inquire at school

GEMS is an English-speaking school from Foundation Stage to Year 13. It offers the IGCSE exams, as well as British-style A-levels for graduates. Uniforms are required.

• HillcrestInternationalSchoolAddress: Langata Rd. nairobi, KenyaTel: + 254 20 806 7783/ 4, + 254 20 266 2137/ 8 Tuition Rates: Inquire at school

Modeled after the UK school system in the UK, the language of instruction is English. Students are 13 years old on arrival

4.Education and Human Resources

Student Enrolment in Kenya

2010/11 2011/12 2012/13 2013/14

Male Female Male Female Female Female Male Female

Public universities 85,931 53,839 94,358 63,558 109,821 85,707 167,046 109,303

Private Universities 21,793 16,055 23,342 17,002 25,615 19,408 26,139 22,072

Total 107,724 69,894 117,700 80,560 135,436 105,115 193,185 131,375

Source: Commission for Higher Education


to Year 9, culminating in IGCSE and A Level qualifications. school uniforms are required.

• RosslynAcademyAddress: Off Limuru Road, off Unep Avenue, past Unep., off Magnolia Close, PO Bwx 14146 00800 Gigiri, Nairobi, KenyaTel: +254 20 263 5294, +254 20 263 5295, +254 20 263 5296, +254 20 263 5261Tuition Rates: Inquire at school

A private co-ed day school with a North American curriculum for grades Pre-K through 12. It offers a Christian based, English language education.

• RusingaSchoolAddress: PO Box 25088-00603 Lavington, Nairobi, KenyaTel: +254 20 387 2290/ 387 2395/ 387 2296 Tuition Rates: Inquire at school

This school follows the British National Curriculum. A christian faith based education, up to year 9 students study the set national curriculum subjects adapted to suit the Kenyan situation. In Years 10 and 11, the curriculum follows a two year IGCSE course administered by the University of Cambridge through Cambridge International Examinations board (cie). uniform is required.

• WestNairobiSchoolAddress: PO Box 1333 00502 KenyaTel: +254 733 610 394, +254 733 626 244, +254 20 808 6290 Tuition Rates: Inquire at school

An American curriculum international school with Christian education that follows the English or the US American curriculum. The school caters to pre-kindergarten through high school. The school is accredited by MSA and ACSI, and is a part of the nics.

• PeponiSchoolAddress: PO Box 236 ruiru, KenyaTel: +254 20 6725 058Tuition Rates: Inquire at school

An English-language independent, co-educational boarding school with an internationally recognized school-leaving examinations at 16 (IGCSE), 17 (A/S) and 18 (A2) Years.

• AgaKhanAcademy(AKES)Address: Waiyaki Way, PO Box 42171-00100 nairobi, KenyaTel: +254 736 801 580Tuition Rates: Inquire at school

A not-for-profit independent school registered with the Ministry of education in Kenya. the academy offers an international curriculum leading to the International General Certificate of secondary education (iGcse) administered from the Cambridge University and International Baccalaureate. There are several campuses across Kenya and around the world.

French International Schools in Nairobi• LycéeDenisDiderot

Address: PO Box 47525 nairobi, Kenya, 00100 GPo Tuition Rates: Inquire at schoolCurriculum is based on the French system with classes taught in french. the school operates under the auspices of the French Ministry for Foreign Affairs and is run in conjunction with the AEFE (Agency for the Teaching of French Abroad). It is a Cambridge Testing Center.

German International Schools in Nairobi• DeutscheSchuleNairobi/GermanSchoolNairobi(DSN)

Address: Limuru Road, opposite Village Market, PO Box 978 00621 nairobi, KenyaTel: +254 721 258 417 or +254 733 445 685 Tuition Rates: Inquire at school

This school caters to German-language expatriate families in the Kenyan capital. It has a German curriculum with instruction in German. it is accredited by the “Kultusminister-konferenz - KMK” (The Standing Conference of the Ministers of education and cultural affairs of the länder in the federal Republic of Germany). From Class 8 upwards geography is taught in English while history is taught bilingually (English/ German) from Class 9. A bilingual kindergarten and a boarding house are attached to the school. DSN observes all Kenyan public holidays as well as the Day of German Unity (3 october).

Japanese International Schools in Nairobi• NairobiJapaneseSchool

Address: PO Box 948 00502 nairobi, Kenya Tel: +254 20 2513321Tuition Rates: KSH 31,200 – KSH 32,400 per year

• Japanese language and curriculum;• Education is approved by the Japanese government.

Scandinavian International School in Nairobi• SvenskaSkolaniNairobi

Address: Makindi Road, off Ngong Road, PO Box 21324 nairobi, 00505 KenyaTel: +254 20 386 65 44Tuition Rates: Inquire at school

the school accepts students from all scandinavian countries. The school provides primary to secondary in Swedish, with Danish, Finnish and Norwegian pupils receiving instruction in their mother tongue. There is also English instruction from pre-school through graduation. Boarding is available.

International School in Mombasa• MombasaAcademy

Address: PO Box 86487 80100 mombasa, KenyaTel: +254 41 471 629, +254 41 473 246 Tuition Rates: Inquire at school

a private coeducational international school. it caters to


children from two and a half years old in play groups to nineteen years (A2 level). It follows the British National curriculum, with all the subjects being taught in English.

International Schools in Nakuru• St.Andrew’sSchool,Turi

Address: Private Bag molo, 20106 KenyaTel: +254 722 209750, +254 20 202 5709Tuition Rates: KSH 221,000 – KSH 638,000 per year

An international, multi-cultural, Christian Boarding School in Kenya offering a British Curriculum education. It is a University of Cambridge testing center. It is accredited by COBIS. Boarding is available.

• GreenstedsInternationalSchoolAddress: Mbaruk Rd. Nakuru, KenyaTel: +254 50 50770Tuition Rates: KSH 67,000 – KSH 545,000 per year

Greensteds International School is a co-educational day and boarding school. The education is adapted to the National Curriculum of England from Reception to ‘A’ level. The school is a recognized centre for the University of Cambridge Local Examinations Syndicate and offers courses through the CIE and edexcel education boards.


children from two and a half years old in play groups to nineteen years (A2 level). It follows the British National curriculum, with all the subjects being taught in English.

International Schools in Nakuru• St.Andrew’sSchool,Turi

Address: Private Bag molo, 20106 KenyaTel: +254 722 209750, +254 20 202 5709Tuition Rates: KSH 221,000 – KSH 638,000 per year

An international, multi-cultural, Christian Boarding School in Kenya offering a British Curriculum education. It is a University of Cambridge testing center. It is accredited by COBIS. Boarding is available.

• GreenstedsInternationalSchoolAddress: Mbaruk Rd. Nakuru, KenyaTel: +254 50 50770Tuition Rates: KSH 67,000 – KSH 545,000 per year

Greensteds International School is a co-educational day and boarding school. The education is adapted to the National Curriculum of England from Reception to ‘A’ level. The school is a recognized centre for the University of Cambridge Local Examinations Syndicate and offers courses through the CIE and edexcel education boards.


Labor Situation Analysis

5


Trade UnionsThe labour relations act 2007 regulates employer/employee relations in Kenya and establishment and registration of trade unions and employer’s organizations. Article 4 of the act gives an employee a right to join and exit any legal trade union. Article 6 gives employer the right to participate in forming an employers’ organization or a federation of employers’ organization. The trade union movement is strong with an estimated 40% of the labour force in the modern sector belonging to various trade unions. The Central Organisation of Trade Unions (COTU) is the national umbrella body governing about 30 unions. Kenya also has industrial courts that sit daily to hear and settle industrial disputes. the federation of Kenya employers (fKe) is the premier employer’s organization in Kenya, established in 1959 under the trade unions act cap 233, to represent the collective interest of employers in Kenya. The Federation’s membership includes employers in the private and public sectors – including state cooperation’s, the local authorities and employers’ associations.

Unemployment and Underemployment Although the national unemployment (ratio of unemployed to total labour force) rate in Kenya dropped from 14.6% in 1998/99 (see 1998/99 Labour Force Survey Results) to 12.7% in 2005/06 (see the Results of the 2005/06 Kenya Integrated Household Budget Survey) and 9.2 percent in 2013(World bank), unemployment remains one of the major development challenges in Kenya. For more than four and a half decades now, the Kenya government has continuously articulated the need to create sufficient employment opportunities to absorb the country’s growing labour force. unemployment and underemployment have been identified as Kenya’s most difficult and persistent problems.

Along with the problem of unemployment and underemployment, there are glaring gender and age-related gaps that have become a major concern for policy makers. The incidence of unemployment in Kenya is higher among females than among men. The causes of unemployment in Kenya has been identified as; high labour force growth rates, high wages and salaries, which triggered adoption of labour-saving techniques of production, inadequate training and consequent lack of skills and skills mis-match and rural-urban migration among others.

Labour issues in Kenya Labour Abilities and Dexterity: Education and training plays a critical role in the production of skills and competencies necessary for employability. The effective creation of demand oriented capabilities in Kenya has been hampered by the weak linkage between education and training institutions, and industry in development of curricula; and the absence of integrated industrial training and attachment programmes. In addition, a gap exists between the level of technology used by industry and those used by the education and training service providers to undertake training. The skills upgrading nexus between secondary, tertiary institutions, universities and industry is furter compounded by an increasing conversion of number of middle-level colleges, especially national polytechnics and technical institutions converted into public universities, without much effort to establish or upgrade other institutions to fill the void

Sectoral Labour Issues:There is wage disparities across economic sectors in Kenya, with financial and real estate activities paying the highest wages, both in the public and private sectors, followed closely by transport and communications activities and public-sector activities related to trade, restaurants and hotels. indeed, compared to the lowest earning activities (i.e. agriculture and foresting, and mining and quarrying) workers engaged in the financial and real estate sector earn, on average, around four to five times more per month. Importantly, one of the lowest paid sectors is the community, social and personal services sector, which accounted for one-third of jobs created in the past decade and represents more than 40 per cent of total salaried employment.

Mobility and Regional Labor Issues:There is free movement of labour within Kenya as there is no restriction on where one can work in Kenya. Labour mobility in Kenya is determined by availability of employment opportunities across the country. Lack of decent employment opportunities in rural areas has led to rural-urban migration in Kenya.

Labor Legislation• employment act 2007• Children’s Act No. 8 of 2001• Industrial Training Act• labour relations act 2007• Work Injury Benefit Act • Minimum wage regulations

Human Resource Management

Severance Paythe employment act of 2007 allows for termination of job on account of redundancy but the employer must pay the employee declared redundant severance pay at the rate of not less than fifteen days pay or each completed year of service.

Employment Rights and Benefitsthe employment act 2007 provides for basic minimum conditions of employment contract as follows:

• All fixed-term and permanent employees are entitled to a minimum of 21 working days per year of leave with full pay;

• an employee shall be an employee shall be entitled to at least one rest day in every period of seven days;

• Where employment is terminated after two or more months of service, payment for one and three quarters days of leave for each completed month of service;

• Women are entitled to three months maternity leave with full pay (in lieu of annual leave);

• A male employer shall be entitled to two weeks paternity leave with full pay;

• Sick leave (at least 7 days with full pay, thereafter 7 days with half-pay) in each year. This may vary by industry;

• Housing or house allowance;• overtime payments are stipulated for some industries under

Cap 229;• Severance pay in case of redundancy;• Safe working conditions.

5. Labor Situation Analysis


Trade UnionsThe labour relations act 2007 regulates employer/employee relations in Kenya and establishment and registration of trade unions and employer’s organizations. Article 4 of the act gives an employee a right to join and exit any legal trade union. Article 6 gives employer the right to participate in forming an employers’ organization or a federation of employers’ organization. The trade union movement is strong with an estimated 40% of the labour force in the modern sector belonging to various trade unions. The Central Organisation of Trade Unions (COTU) is the national umbrella body governing about 30 unions. Kenya also has industrial courts that sit daily to hear and settle industrial disputes. the federation of Kenya employers (fKe) is the premier employer’s organization in Kenya, established in 1959 under the trade unions act cap 233, to represent the collective interest of employers in Kenya. The Federation’s membership includes employers in the private and public sectors – including state cooperation’s, the local authorities and employers’ associations.

Unemployment and Underemployment Although the national unemployment (ratio of unemployed to total labour force) rate in Kenya dropped from 14.6% in 1998/99 (see 1998/99 Labour Force Survey Results) to 12.7% in 2005/06 (see the Results of the 2005/06 Kenya Integrated Household Budget Survey) and 9.2 percent in 2013(World bank), unemployment remains one of the major development challenges in Kenya. For more than four and a half decades now, the Kenya government has continuously articulated the need to create sufficient employment opportunities to absorb the country’s growing labour force. unemployment and underemployment have been identified as Kenya’s most difficult and persistent problems.

Along with the problem of unemployment and underemployment, there are glaring gender and age-related gaps that have become a major concern for policy makers. The incidence of unemployment in Kenya is higher among females than among men. The causes of unemployment in Kenya has been identified as; high labour force growth rates, high wages and salaries, which triggered adoption of labour-saving techniques of production, inadequate training and consequent lack of skills and skills mis-match and rural-urban migration among others.

Labour issues in Kenya Labour Abilities and Dexterity: Education and training plays a critical role in the production of skills and competencies necessary for employability. The effective creation of demand oriented capabilities in Kenya has been hampered by the weak linkage between education and training institutions, and industry in development of curricula; and the absence of integrated industrial training and attachment programmes. In addition, a gap exists between the level of technology used by industry and those used by the education and training service providers to undertake training. The skills upgrading nexus between secondary, tertiary institutions, universities and industry is furter compounded by an increasing conversion of number of middle-level colleges, especially national polytechnics and technical institutions converted into public universities, without much effort to establish or upgrade other institutions to fill the void

Sectoral Labour Issues:There is wage disparities across economic sectors in Kenya, with financial and real estate activities paying the highest wages, both in the public and private sectors, followed closely by transport and communications activities and public-sector activities related to trade, restaurants and hotels. indeed, compared to the lowest earning activities (i.e. agriculture and foresting, and mining and quarrying) workers engaged in the financial and real estate sector earn, on average, around four to five times more per month. Importantly, one of the lowest paid sectors is the community, social and personal services sector, which accounted for one-third of jobs created in the past decade and represents more than 40 per cent of total salaried employment.

Mobility and Regional Labor Issues:There is free movement of labour within Kenya as there is no restriction on where one can work in Kenya. Labour mobility in Kenya is determined by availability of employment opportunities across the country. Lack of decent employment opportunities in rural areas has led to rural-urban migration in Kenya.

Labor Legislation• employment act 2007• Children’s Act No. 8 of 2001• Industrial Training Act• labour relations act 2007• Work Injury Benefit Act • Minimum wage regulations

Human Resource Management

Severance Paythe employment act of 2007 allows for termination of job on account of redundancy but the employer must pay the employee declared redundant severance pay at the rate of not less than fifteen days pay or each completed year of service.

Employment Rights and Benefitsthe employment act 2007 provides for basic minimum conditions of employment contract as follows:

• All fixed-term and permanent employees are entitled to a minimum of 21 working days per year of leave with full pay;

• an employee shall be an employee shall be entitled to at least one rest day in every period of seven days;

• Where employment is terminated after two or more months of service, payment for one and three quarters days of leave for each completed month of service;

• Women are entitled to three months maternity leave with full pay (in lieu of annual leave);

• A male employer shall be entitled to two weeks paternity leave with full pay;

• Sick leave (at least 7 days with full pay, thereafter 7 days with half-pay) in each year. This may vary by industry;

• Housing or house allowance;• overtime payments are stipulated for some industries under

Cap 229;• Severance pay in case of redundancy;• Safe working conditions.

5. Labor Situation Analysis


Hiring, Layoffs and Firing – Employment Act 2007Termination by Notice Issued by Employer or Employee:

• Notice should be for the mutually agreed period;• minimum statutory notice period for monthly employment

is one month;• Where no notice is given, there should be payment of

wages for the notice period in lieu of notice by the party terminating;

• Employees are entitled to moneys, allowances and benefits earned while in employment, e.g. salary, accrued leave payments, bonuses, retirement benefits, etc.;

• Certificates of Service (testimonials) should be given if asked for;

• Does not apply for casual workers whose engagement ends at the end of each day.

Dismissal and Sacking: • Due to wrongs done in connection with employment;• Dismissal can be effected after warning or summarily/

instantly in case of gross misconduct;• In the case of dismissal after warning, warnings should be in

writing and kept in the employer’s records for the particular employee;

• summary dismissal is for serious misconduct. Grounds include absenteeism, crime, intoxication, disobedience, etc.;

• Dismissed employees are entitled to moneys, allowances and benefits earned while in employment, e.g. salary, accrued leave payments, retirement benefits, etc.;

• Dismissed employees are entitled also to certificates of service (testimonials);

• Upon dismissal, the employer should make a written report to the district labor office explaining the circumstances leading to, and reasons for, the dismissal as well as giving other specified details of the employee’s terms of employment.

Redundancy:• Occurs when employees cannot be utilized for any work,

e.g. during a period of recession when the company has little business;

• termination of employment in this manner should be carried out according to law and the area labor office should be notified;

• employees are entitled to severance pay (15 days for every year worked), one month’s wages in lieu of notice and accrued leave payments and all other benefits due.


Natural Resources & Geographic Profile

6


Natural Resources & Geographic Profile

6


6.1. Geology the african continent represents the interior of the world’s original continental landmass, Pangaea, from which the other continents began to break away about 200 million years ago. This process, known as continental drift, continues today, and the African continent is splitting up into smaller segments. Kenya is part of a large portion of northeast Africa that is slowly breaking away from the rest of the continent and moving towards India. The break is marked by the Great Rift Valley, which represents a series of faults in the earth’s surface. The Great Rift Valley extends 8,000 km from Central Asia through almost the length of Africa, including 3500 km from the Red Sea to Mozambique. Eventually the Rift Valley will deepen and lengthen and once it connects to the ocean it will flood, forming a feature similar to the red sea.

Volcanic activity and earthquakes occur as part of this break up. Rocks of volcanic origin are common in Kenya, covering about one-third of the country’s surface. There are two other major classes of rocks in the country. To the south and east of the volcanic rocks are ancient rocks that form a spine that runs north-south through the center of the country, and relatively new sedimentary rocks cover much of the east of Kenya. The geology of Kenya is reflected in the elevation of the country with highland areas center and east of the country and scattered hills and uplands elsewhere

6.2. Climate Generally, Kenya enjoys a tropical climate. it is hot and humid at the coast, temperate inland, and very dry in the north and north Eastern parts of the country. The country receives a great deal of sunshine all the year round and, while it is warm during the day in higher elevations it is often cool at night and early in the morning.

The country experiences two rainy seasons, the “long rains” from March to June and the “short rains” from October to December. The rainfall pattern of most of the country is associated with the monsoons of the Indian Ocean. The long rains are brought by southeasterly winds blowing off the Indian Ocean, while the short rains are carried by northeasterly winds that blow from India and across the Arabian Sea to Kenya. Western Kenya, which receives rain almost year-round, is also influenced by winds that blow across the Congo Basin, bringing rain in July and August.

Only about one fourth of the country receives enough rainfall to support rain-fed farming. The amount of rainfall varies considerably from place to place and from year to year. this means that people in different parts of the country have developed different economies and ways of life, and nearly everyone is vulnerable to the effects of droughts, which occur with depressing regularity.

Climate and soils combine to create different agro-ecological regions. The lowland areas are dry, except for a narrow strip of land that borders the Indian Ocean where winds blowing off the ocean bring a lot of rain. The desert areas of northern and eastern Kenya receive little rain.

The semi-arid plains in the south and the Rift Valley do not get

enough rain to support rain fed agriculture. These areas are the home of peoples such as the Rendille, Samburu, Turkana, Galla and the Maasai who raise livestock for a living. They drink milk and eat meat from their animals and they sell animals to buy grains, like maize (corn). These people also practice nomadic life especially during the dry season. They move from place to place looking for grass and water points for their livestock. In places where water is available, crops such as vegetables, rice, and cotton are grown under irrigation. Many of Kenya’s national parks are also located in these areas. Tourists who visit the parks are an important source of income for the country.

The mountainous areas of the center and the southwest of the country receive a lot more rain. These are the major agricultural areas of Kenya. maize and beans are the principal food crops for these communities while coffee and tea are grown as cash crops. Some areas are also set aside as forests and national parks.

Along the coast is a narrow strip of land that receives abundant rainfall. This is an area where a variety of crops such as fruits, nuts, and cotton are grown. It is also the location of Kenya’s beautiful beaches. the tourism industry is very important.

temperatures vary from season to season and by elevation of the place. The lowlands are much hotter than the highlands. In the cool time of the year the highlands sometimes get frosts, and hail is quite common. Predictions of climate change made by global General Circulation Models (GCMs) are in broad agreement that by 2050 Kenya will be generally warmer and wetter. These trends may differ for specific areas. For example, in the highlands of Kenya, warmer temperatures are expected along with shorter but more torrential rainy seasons, while areas of north eastern Kenya are expected to see increases in rain that may lead to more vegetation and there is evidence from recent satellite measurements that this may already be underway. Although GCMs predict that Kenya will be warmer and wetter, different regions will likely have complicated responses because of mountains, lakes, human population size, and people’s land.

The highland areas of Kenya provide most of Kenya’s food (like maize and beans) and mountain-grown cash crops (like coffee and tea). Warmer temperatures in the cool highland areas are expected to be too warm for coffee and tea, which will have to be moved to cooler and higher areas. The warmer temperatures will make the growing season shorter (better) for maize and other food crops, especially if rainfall stays about the same or increases.

Lowland areas are also predicted to be warmer, especially along the Indian Ocean coast. Although the models also predict more rainfall for lowland areas, too much warming will shorten the growing season for maize and many other crops that are grown there now. Farmers in lowland areas may expect to cope with these warmer temperatures by switching to more heat-tolerant crops.

Many other areas of Kenya do not have enough rainfall for agriculture, so herding is more common. These areas already have erratic rainfall from year to year. Although increased temperatures and more rainfall by 2050 may make farming

6. Natural Resources & Geographic Profile


theoretically possible, the characteristics of the rainy seasons (shorter and more torrential) may make farming too risky in all but a few places.

6.3. Soils many factors contribute to soil formation, including the original rock, the climate, the slope and height of the land, and the activity of living organisms. With its diverse landscapes and environmental conditions, Kenya has many different soil types. some are sandy, some clays, and others are very stony. their characteristics vary according to drainage and original rock matter; some are well drained while others become waterlogged during the rains. Kenyans are very aware of these characteris-tics, and farmers and herders vary their use of the land to take account of these differences.

6.4. Hydrology Kenya has many large lakes and a number of rivers. The largest lake, Lake Victoria that is shared with Tanzania and Uganda, covers 67,493 km2. Others include the Rift Valley lakes that run from Lake Magadi in the south to Lake Turkana in the north. These lakes are important to Kenya’s economy. The birds and animals that the lakes attract support an important tourist industry.

The longest river in Kenya is the Tana River. It rises on Mount Kenya and flows for 700 km to the sea 50 km north of Malindi. the athi river that rises in hills near nairobi joins the Galana river and after 550 km flows into the Indian Ocean near Malindi. A third major river is the Ewaso Ngiro. This is a seasonal river. This means that it only flows along its whole 530 km course across the dry lands of northeast Kenya into Somalia during the rainy seasons. Other important rivers are the Turkwell and Kerio, both of which flow for about 350 km before entering Lake Turkana. A number of shorter rivers flow into Lake Victoria.

6.5. Wildlife A remarkable feature of Kenya’s natural resources is the wildlife. Wildlife have survived largely because the Kenyan people did not hunt them for fun but deliberately preserved them. the maasai, for example, believe that their god made them custodians of all animals, wild and domestic. Today a large proportion of the country has been set-aside as national parks and national reserves. These are areas within which the wildlife is protected and in which dry season grazing and water is found. Among these are Lake Nakuru, known for its flamingos, Amboseli famous for its elephants, and Maasai Mara where the spectacular annual migration of the wildebeest takes place.

Kenya has many wildlife species, and over a thousand different birds. The animals range from the “Big Five” - elephant, rhinoceros, buffalo, lion, and leopard - (Photos 20-25) to numerous antelope including the world’s smallest antelope, the dik dik. One of the strangest of animals is the rock hyrax, which is about the size of a rabbit yet is related to the elephant.

6.6. Flora Given the diversity of ecological conditions in Kenya, it is not surprising that the country’s flora is spectacular in its variety. The range of flora can be experienced by imagining a trek from the summit of Mt. Kenya down to the floor of the Rift Valley and across the lowlands to the coast. At the summit of Mt. Kenya are glaciers, and species able to survive in great cold are found, such

as alpine flowers and grasses. The descent takes you through highland rain forests and bamboo forest into the savannas with their euphorbia trees, baobabs, and acacias. the drier areas have sparse vegetation with occasional thorny bushes and cacti. Along the coast, the damp winds from the ocean support lush vegetation including palm trees and coastal rain forest.

6.7. Major Environmental Regions Kenya has an exceptionally varied environment. it has forests and deserts, mountains and plains all so close to each other that you can go from snow-capped Mount Kenya to the near-desert in under 150 kilometers. Along the coast of the Indian Ocean are glorious white sand beaches and coral reefs teeming with colorful fish.

TheLakeVictoriaBasinLake Victoria, the world’s second largest freshwater lake, covers 67,493 square kilometers, and is bordered by Kenya, Uganda, and Tanzania. The lands on the shore are flat and fertile and around them rise mountains with rain forests that receive year-round rainfall. The Basin is one of Kenya’s most productive agricultural areas, with sugar the principal cash crop. The lake is the location of an important fishing industry, though the variety of fish has declined markedly since the introduction of the very competitive Nile Perch, which has replaced many species.

TheCentralHighlandsthese upland areas rise above 1,500 meters and include mt. Kenya, the Aberdares, the Cherangani Hills, and the Mau Escarpment. These are among the most densely settled and agriculturally productive areas of the country. Farmers produce maize (corn), beans, and bananas as staple food crops; tea and coffee, and in some areas horticultural crops for export. the higher locations are enclosed in National Parks such as the Mt. Kenya and Aberdares parks, and are the home of many wildlife species.

TheRiftValleya spectacular feature of the Kenyan landscape, the Great rift Valley, divides the Highlands. A number of freshwater and soda lakes are found in the floor of the Rift Valley. These include Lake Magadi, where the soda is mined commercially, Lakes Elementaita, Bogoria and Nakuru, where large populations of flamingos are found, Lake Baringo which has an important fishing industry and in the north, Lake Turkana, where many of the exciting discoveries about the origins of the human race were made by Kenyan archaeological expeditions.

TheLowlandsKenya’s dry lowlands cover about 80 percent of the land area. they extend from the deserts of the north that border sudan, Ethiopia, and Somalia, south and east to the semi-arid savannas that border Tanzania. They form an undulating plain, broken only by a few highland outcrops such as Mt. Marsabit, a volcano with a spectacularly beautiful lake in its crater. These dry areas are the home to Kenya’s nomadic people such as the Turkana, rendille, boran, and Gabbra. their livelihoods depend mainly on the herding of camels, cattle, sheep, goats, and donkeys. These are among the most isolated and poor areas of the country. In the southeast of Kenya are two of the country’s most famous national parks, Tsavo and Amboseli, which adjoin the territory of the maasai people.


TheCoastKenya’s coastline extends for nearly 450 kilometers from the border with Somalia in the north to Tanzania in the south. The coast receives rains from winds blowing off the Indian Ocean, and the coastal plain has a productive agricultural economy including coconuts, bananas and other fruits, and nuts. The coast is fringed by coral reefs that have spectacular fish life. The coastal ports

were part of an ancient trading network that extended across the indian ocean to arabia, india, and china. mombasa, one of these ancient ports, remains the leading seaport on the east coast of africa. the beaches, climate, and historic sites are the basis of a tourist industry that attracts hundreds of thousands of tourists each year.


Licensing and Permitting 7


Licensing and Permitting 7


7.1. Business Licensing

Establishing a company in Kenyathe principal types of business enterprises in Kenya are:

• Registered Companies (Private and Public) – Companies are registered as limited liability companies and are regulated by the Companies Act (Cap 486);

• Branch offices of companies registered outside Kenya – the

branch will be issued with a Certificate of Compliance;• Partnerships – a partnership is restricted to a maximum of

20 persons, each of whom is jointly and separately liable for all debts incurred and is regulated under the Partnership Act 1981;

• Sole Proprietorships;• Co-operatives – are regulated under Cooperative Society’s

act.

Tax codes • Corporate Income Tax:

√ Resident company: 30%; √ Non-resident company operating as a branch under cer-

tificate of Compliance: 37.5%;• Customs and Excise Duties rates vary for different products; • Value added tax: 16 %; some items are exempted;

7.2. Entry Licensing Valid passports or other travel documents including Seaman’s Discharge Book, acceptable to the Government of Kenya are required for all persons wishing to enter Kenya. The passports must be valid for at least six (6) months.

Exemptions from permits are granted to all persons who are entitled to privileges and immunities under The Kenya Citizenship and Immigration Act 2011 under section 34 (3) (a) to (g) laws of Kenya.

A bona fide visitor may be issued with a visitor’s pass on arrival at a port of entry into Kenya valid for a period not exceeding three months in the first instance provided that he is in possession of a valid passport or other travel document acceptable to the Government of Kenya, has a valid visa where required, is in possession of sufficient funds for subsistence while in Kenya and a return, or onward ticket to his country of origin, domicile or destination.

Types of Visas• Ordinary Visa: Issued for Single or Multiple entries to

persons whose nationalities require visas to enter Kenya;• Transit Visa: Issued for periods not exceeding three days

to persons whose nationalities require visas to enter Kenya and who intend to transit through Kenya to a different destination;

• Diplomatic Visa: Issued for single or multiple entries to holders of diplomatic passports who are on official duty;

• Courtesy/ Official Visa: Issued to persons holding Official or Service passports on Official duty and to Ordinary passport holders who are not entitled to a Diplomatic visa; but where it is considered by the director to be desirable on the grounds of international courtesy;

• East Africa Tourist Visa: This is a joint tourist visa that entitles holders to travel to and within the Republic of Kenya, Republic of Rwanda and Republic of Uganda. For the purpose of tourism validity of East Africa Tourist Visa: 90 (ninety days) multiple entry.

• Visa Fees: √ The transit visa fee shall be USD 20; √ The visa referral visa fee shall be USD 10 non-refundable; √ The current standard visa fee for an ordinary or a Single

Journey entry visa shall be USD 50; √ the standard fee for multiple journey visas shall be usd

100 for all nationalities; √ east african tourist Visa usd 100.

7. Licensing and Permitting

Cost and Procedure of Incorporating a Company

No. Procedure Cost

1 Reserve a company name and get it approved Registrar of companies

Ksh 100

2 Prepare the memorandum of association and articles of Association (The applicant will be required to engage a professional lawyer/ company secretary to draft the Memorandum of Articles which will set out the objects of the company and the internal constitution of the company)

Depends on the legal firm

3 stamp the memorandum and articles of association, and a statement of the nominal capital

1% of nominal capital (Kes 20 for every Kes 2,000 or part thereof of capital) + Kes 2,000 for stamp duty on memorandum and articles of association

4 Register with the Registrar of Companies at the Attorney General chambers in nairobi

Kes 7,360

5 Certificate of Incorporation will be issued by the Registrar of companies

nil

Source: Doing Business Indicators 2014


7.3. Entry for Foreign Workers Introductionthe department of Immigration is a service department whose functions and mandate are derived from: The Constitution, the Citizenship and Immigration Act No. 12 of 2011, The Kenya Citizens and Foreign Nationals Management Service Act No. 31 of 2011, and other relevant Legislation and International Conventions. These Laws set criteria for issuance of various immigration documents including passports, passes and work

permits to investors, missionaries, professionals, and persons working with various private and public organizations.

Classes of Permits and their Requirementsthe Permits and Passes Section under the new immigration laws issues the following documents:

• entry Permits (classes a –m)• Kenya special Passes• Kenya dependant Passes

Conditions of Entry Permits in KenyaAll foreign nationals seeking to enter Kenya:

• Must be of benefit to Kenya;• Must have sufficient funds for sustenance/ subsistence;• Not a prohibited immigrant or in admissible person;• Must indicate a known and traceable physical/ residential

address;• Returnable to country of origin/ domicile; • Valid and acceptable reason for entry;• Must present a valid and acceptable travel document;• Must not suffer from a contagious disease or must be

accompanied by competent medical personnel;• These conditions may not apply to refugees as described in

the Refugees Act of 2006.

General Requirements for All Classes of Work Permits:• Duly filled and signed application Form 26. This Form is

downloaded at the Kenya Immigration website: www. immigration.go.ke and it must be completed and signed by the employer;

• Applicant’s copies of passport (bio-data page and current visa page);

• 2 passport size photographs of the applicant;• Application letter detailing nature of company’s activities.

Class ‘A’ Work Permit (Prospecting and Mining)Class ‘A’ permit is applied for by foreigners who wish to engage in prospecting and mining business.

The requirements for applying for a Class ‘A’ Work Permit are: • Documentary proof of capital to be invested/already

invested minimum of usd 100,000 or equivalent in any other currency. This proof is either: √ Own bank statement from a local bank account; √ Company bank statement, shareholding certificate and

Financial Audited Accounts in case you are joining an ex-isting business.

• Copy of licences held for prospecting;

• Tax compliance for renewals;• List of Kenyans employed;• fee of Kshs. 250,000 per year (fee payable after approval of

permit) and processing fee – non-refundable of Kshs.10,000. (Payments done through a Bankers Cheque addressed to: The Director of Immigration Services).

Class B Work Permit (Agriculture & Husbandry)This class of permit is applied by foreigners who wish to engage in agriculture and husbandry business.

• The requirements for applying for a Class ‘B’ Work Permit are:

• Documentary proof of capital to be invested/already invested minimum of usd 100,000 or equivalent in any other currency. This proof is either: √ Own bank statement from a local bank account; √ Company bank statement, shareholding certificate and

Financial Audited Accounts in case you are joining an existing business.

• Proof of land acquired legally for the purpose;• Tax compliance certificate for renewals;• fee of Kshs.100,000 per year (fee payable after approval of

permit) and processing fee – non-refundable of Kshs.10,000 (Payments done through a Bankers Cheque addressed to: The Director of Immigration Services).

Class ‘C’ Work Permit (Prescribed Profession)this class of permit is applied foreigners who belong to a prescribed profession and one must show proof of membership to such profession.The requirements for applying for a Class ‘C’ Work Permit are:

• Documentary proof of capital to be invested/already invested minimum of usd 100,000 or equivalent in any other currency;

• Proof of membership to a prescribed profession;• Copies of Personal & Company Personal Identification

Number (PIN) if business is running.

Summary of Classes of Permits and Fees

Class of Permit Processing fee (Kshs) Fee per year (Kshs)

CLASS A 10,000 250,000

CLASS B 10,000 100,000

CLASS C 10,000 100,000

CLASS D 10,000 200,000

CLASS F 10,000 100,000

CLASS G 10,000 100,000

Note: Nationals of East African Community Member States are issued permits gratis.


• Tax compliance for renewals;• fee of Kshs.100,000 per year (fee payable after approval of


Class ‘D’ Work Permit (Employment)the requirements for applying for a Class ‘D’ Work Permit are:

• Employee Permits are only issued to foreign nationals who bring in specific skills that are not readily available in Kenya;

• there must be competent Kenyan understudy for purposes of eventual Kenyanization of the post;

• Recommendation from a registered professional body/organization of which applicant is a member.(for example Kenya medical and Practitioners board, architectural Association of Kenya, Nursing Council of Kenya, Institute of Chartered Accountants of Kenya and Law Society of Kenya, among others).

• Detailed curriculum vitae;• Copies of academic and professional qualifications. (Note

that if the certificates are not in English, they have to be translated and certified by respective Embassies/High Commissions);

• A covering letter from the employer explaining why the applicant is suitable for the position, why the applicant was issued with the job as opposed to a Kenyan citizen and setting out applicants strengths e.g. experience, training, ability, qualifications among others;

• Duly filled and signed Form 27 (Kenyanisation Form);• fee of Kshs.200,000 per year (fee payable after approval of


Class F Work Permit (Specific Manufacturing)Class F work permit is applied by foreigners who are engaged with specific manufacturing business. To apply for Class ‘F’ work permit, it is necessary that the company first be registered.

The requirements for applying for a Class ‘F’ Work Permit are: • Documentary proof of capital to be invested/already



• Copy of licence held;• Registration certificate of the company Or Certificate of

Incorporation;• Copy of company’s Memorandum and Articles of

Association;• Copies of Personal & Company Personal Identification

Number (PIN) if business is running;• Tax compliance for renewals;• List of Kenyans employed;• fee of Kshs.100,000 per year (fee payable after approval of

permit) and processing fee – non-refundable of Kshs.10,000 (payments done through a bankers cheque addressed to: the Director of Immigration Services).

Class G Work Permit (Specific Trade /Business)Class G Work Permit is applied for by foreigners who are engaged in specific trade or business.

The requirements for applying for a Class ‘G’ Work Permit are: • Documentary proof of capital to be invested/already



• Registration certificate of the company Or Certificate of Incorporation;

• Copy of company’s Memorandum and Articles of Association;

• Copies of Personal & Company Personal Identification Number (PIN) if business is running;

• Tax compliance for renewals;• List of Kenyans employed;• fee of Kshs.100,000 per year (fee payable after approval of

permit) and processing fee – non-refundable of Kshs.10,000 (payments done through a bankers cheque addressed to: the Director of Immigration Services).

Dependant PassThe requirements for applying for a Dependant Pass are:

• The applicant must be: √ Kenyan; √ Holder of valid entry permit; √ exempted person under immunities act (cap. 179) and

who are covered under section 4(3) (a) to (g).• Application form (Form 28) dully filled and signed;• Copy of the national passport of the dependant;• Two passport size photos of the dependant;• Copy of birth certificate or marriage certificate for immediate

family members;• Fee for Dependant Pass: Kshs. 5,000.

Special Passthis is a document issued to person(s) given specific employment by specific employer for a short duration not exceeding three (3) months.

The requirements for applying for a Special Pass are: • Application form(Form 32) dully filled and signed;• Copy of the national passport;• Two passport size photos;• Forwarding letter from institution/ applicant;• Copies of Academic/professional certificates;• Copy of CV;• Clearance from regulatory bodies (medical and dentist

board, pharmacy and poisons board, engineering board, NGO council, Ministry of Information);

• Fee for special pass: Kshs. 15,000/= per month or part thereof.


Investment Promotion and Protection Framework

8


Legal Framework

Investment Laws and regulationsKenya’s investment promotion Act. (2004). The Act aims at promotion and facilitation of investment by assisting investors in obtaining the licences necessary to invest, and providing other assistance and incentives for related purposes. investment policy and most investment related institutions in Kenya including Kenya Investment Authority, the agency responsible for promotion and facilitation of both local and foreign investments in Kenya, remain under the oversight of the Ministry of Finance. The Authority issues an investment certificate, which allows the holder a legal entitlement to certain licences. A certificate holder is also entitled to three entry work permits for management and technical staff, as well as three others for owners, shareholders, partners and dependants. Both are for an initial, but renewable, two-year period. Capital repatriation and remittance of dividends and interests are guaranteed to foreign investors under the IPA. Other conditions that may be considered include whether such investment will achieve any of the following: technology transfer; increase in foreign exchange, either through exports or import substitution; use of domestic raw materials, supplies and services; value addition in the processing of local, natural and agricultural resources; and the utilization, promotion, development and implementation of ict and any other factors the Authority considers beneficial to Kenya.

Important regulatory institutions on investment in Kenya include the Central Bank of Kenya (CBK), which provides, inter alia, opportunities for investment in treasury bills and bonds; the Export Processing Zones Authority (EPZA), which provides investors with tax incentives, a facilitating operating environment and good physical infrastructure; the Capital Markets Authority (CMA) on regulation of portfolio investments; and the Nairobi Securities Exchange (NSE) for securities trading and listed companies. Other key institutions are the National Environment Management Authority for environmental certification and audit and the Communications Commission of Kenya on regulation of investments in the ICT sector. Ideally, regulatory authorities in any sector of the economy serve to ensure adherence to the existing laws and regulations. Investments that may have adverse effect on health and security are subject to scrutiny before approvals are granted.

In August 2011, a new Competition Act replaced the 1989 Law. The new Act puts in place a new competition framework which aims to foster a well-functioning competitive environment, provide consumer protection, and establish and define the role of the competition authority and the competition tribunal. Following good practice, the new framework introduces a separation between policymaking and enforcement, which is now the responsibility of a Board within the Ministry of Finance. The final approval of mergers and acquisitions (M&A) rests with the Competition Authority, which also has the power to set the relevant thresholds. the act prioritizes enforcement in sectors that have a high impact on vulnerable members of society such as food, energy and infrastructure development.

the primary purpose of the 2012 land act is to provide one reference document for land. The new Act has given way to the

creation of a National Land Commission, which will manage public land on behalf of national and county authorities. It will evaluate all parcels of public land for capability and classify them by potential use. the commission is also mandated with developing guidelines for public land management by all public agencies and will be responsible for allocating land. The Commission is charged with setting aside land for investment, which will benefit local communities and their economies. If land is not already set aside for investment, then the process can take a minimum of one month (a 30-day notice to county governor and interested parties and a three-week period for gazetting).

Legal forms of incorporationcorporate entities may be set up as sole proprietorships, partnerships, limited liability partnerships, cooperative societies, or limited liability companies. the main vehicles utilised by investors are limited liability companies which can be incorporated as either private or public limited liability companies. The law also allows foreign companies to set up a branch office in Kenya with the same legal status as the foreign company.

Investment IncentivesKenya’s Special Economic Zones (SEZs) and Export Processing Zones (EPZ) offer special geographically-based incentives. The government’s Manufacturing Under Bond (MUB) program is meant to encourage manufacturing for export by exempting participating enterprises from import duties and VAT on imported plant, machinery, equipment, raw materials, and other imported inputs. The program also provides a 100 percent investment allowance on plant, machinery, equipment, and buildings. Participating companies must export goods produced under the MUB system. If not exported, the goods are subject to a surcharge of 2.5 percent and imported inputs used in their production are subject to all other tariffs and other import charges. The program is open to both local and foreign investors, and is administered by the Kenya revenue authority.

Investors in the manufacturing and hotel sectors are able to deduct from their taxes a large portion of the cost of buildings and capital machinery. The government allows all locally financed materials and equipment (excluding motor vehicles and goods for regular repair and maintenance) for use in construction or refurbishment of tourist hotels to be zero-rated for purposes of Vat calculation. the ministry of finance permanent secretary must approve such purchases.

The government permits some VAT remission on capital goods, including plants, machinery, and equipment for new investment, expansion of investment, and replacement. the investment allowance under the Income Tax Act is set at 100 percent. Materials imported for use in manufacturing for export or for production of duty-free items for domestic sale qualify for the investment allowance. Approved suppliers, who manufacture goods for an exporter, are also entitled to the same import duty relief. The program is also open to Kenyan companies producing goods that can be imported duty-free or goods for supply to the armed forces or to an approved aid-funded project.

8. Investment Promotion and Protection Framework


Research and Developmentthere is no differentiation between local and foreign investors in access to government-sponsored research.

Performance Requirements The government encourages investments in sectors that create employment, generate foreign exchange, and create forward and backward linkages with rural areas. The law applies local content rules but only for purposes of determining whether goods qualify for preferential duty rates within Common Market for Eastern and southern africa (comesa) and the east african community (eac).

Conversion and Transfer PoliciesKenya’s Foreign Investment Protection Act (FIPA) guarantees capital repatriation and remittance of dividends and interest to foreign investors, who are free to convert and repatriate profits including un-capitalized retained profits (proceeds of an investment after payment of the relevant taxes and the principal and interest associated with any loan). Kenya has no restrictions on converting or transferring funds associated with investment. Kenyan law requires the declaration of amounts above Ksh 500,000 (about USD 5,600) as a formal check against money laundering. Foreign exchange is readily available from commercial banks and foreign exchange bureaus and can be freely bought and sold by local and foreign investors. The Kenyan shilling has a floating exchange rate tied to a basket of foreign currencies Expropriation and CompensationKenyan investment law is modelled on British investment law. The Companies Act, the Investment Promotion Act, and the Foreign Investment Protection Act are the main pieces of legislation governing investment in Kenya. Kenyan law provides protection against the expropriation of private property, except where due process is followed and adequate and prompt compensation is provided. Various bilateral investment agreements also guarantee further protection with other countries. Expropriation may only occur for either security reasons or public interest.

Right to Private Ownership and EstablishmentPrivate enterprises can freely establish, acquire, and dispose of interest in business enterprises. The Kenyan legal system is quite flexible on exit options, which normally are determined by the agreement that the investor has with other investors. The Companies Act specifies how a foreign investor may exit from an incorporated company. in practice, a company faces no obstacles when divesting its assets in Kenya, if the legal requirements and licenses have been satisfied. The Companies Act gives the procedures for both voluntary and compulsory winding-up processes.

Protection of Property RightsKenya has a comprehensive legal framework to ensure intellectual property rights (IPR) protection, which includes the Anti-Counterfeit Act, the Industrial Property Act, the Trade Marks Act, the Copyright Act, the Seeds and Plant Varieties Act, and the Universal Copyright Convention. Kenya’s Copyright Act protects literary, musical, artistic, and audiovisual works; sound recordings and broadcasts; and computer programmes. Kenya is a member of the Convention establishing the World Intellectual

Property Organization (WIPO), the Paris Convention for the Protection of Industrial Property and the Patent Co-operation Treaty. Kenya is a signatory to the Madrid Agreement Concerning the International Registration of Marks.

BankruptcyBankruptcies are governed by the Bankruptcy Act (2009); creditors’ rights are comparable to those in other common law countries. Monetary judgments typically are made in Kenyan shillings. The World Bank’s 2014 Doing Business Report puts Kenya at 123 of 189 countries in the “resolving insolvency” category. This is down 22 rankings from 2013. The report states that 4.5 years are typically required to close an estate in Kenya, at a cost of 22 percent of the estate. Estates are sold as a going concern, and the recovery rate is 24.7 cents on the dollar.

Competition LawThe Competition Authority of Kenya regulates Kenyan competition law and its enforcement. They regulate mergers, abuse of dominance, and other competition and consumer – welfare related issues in Kenya. They have recently imposed a filing fee for mergers and acquisitions, set at one million shillings (USD 11,554) for mergers involving turnover of between one and 50 billion shillings (USD 11.6 million to USD 578 million), while two million shillings (USD 23,108) will be charged for larger mergers. All mergers and acquisitions require the Authority’s authorization before they are finalized.

Kenya has signed various bilateral investment agreements to guarantee further protection of investment from countries with whom Kenya has signed the agreement with. Kenya is a member of the Multilateral Investment Guarantee Agency (MIGA), the Africa Trade Insurance Agency (ATI) and the International Centre for Settlement of Investment Disputes (ICSID) which arbitrates cases between foreign investors and host governments.


Research and Developmentthere is no differentiation between local and foreign investors in access to government-sponsored research.

Performance Requirements The government encourages investments in sectors that create employment, generate foreign exchange, and create forward and backward linkages with rural areas. The law applies local content rules but only for purposes of determining whether goods qualify for preferential duty rates within Common Market for Eastern and southern africa (comesa) and the east african community (eac).

Conversion and Transfer PoliciesKenya’s Foreign Investment Protection Act (FIPA) guarantees capital repatriation and remittance of dividends and interest to foreign investors, who are free to convert and repatriate profits including un-capitalized retained profits (proceeds of an investment after payment of the relevant taxes and the principal and interest associated with any loan). Kenya has no restrictions on converting or transferring funds associated with investment. Kenyan law requires the declaration of amounts above Ksh 500,000 (about USD 5,600) as a formal check against money laundering. Foreign exchange is readily available from commercial banks and foreign exchange bureaus and can be freely bought and sold by local and foreign investors. The Kenyan shilling has a floating exchange rate tied to a basket of foreign currencies Expropriation and CompensationKenyan investment law is modelled on British investment law. The Companies Act, the Investment Promotion Act, and the Foreign Investment Protection Act are the main pieces of legislation governing investment in Kenya. Kenyan law provides protection against the expropriation of private property, except where due process is followed and adequate and prompt compensation is provided. Various bilateral investment agreements also guarantee further protection with other countries. Expropriation may only occur for either security reasons or public interest.

Right to Private Ownership and EstablishmentPrivate enterprises can freely establish, acquire, and dispose of interest in business enterprises. The Kenyan legal system is quite flexible on exit options, which normally are determined by the agreement that the investor has with other investors. The Companies Act specifies how a foreign investor may exit from an incorporated company. in practice, a company faces no obstacles when divesting its assets in Kenya, if the legal requirements and licenses have been satisfied. The Companies Act gives the procedures for both voluntary and compulsory winding-up processes.

Protection of Property RightsKenya has a comprehensive legal framework to ensure intellectual property rights (IPR) protection, which includes the Anti-Counterfeit Act, the Industrial Property Act, the Trade Marks Act, the Copyright Act, the Seeds and Plant Varieties Act, and the Universal Copyright Convention. Kenya’s Copyright Act protects literary, musical, artistic, and audiovisual works; sound recordings and broadcasts; and computer programmes. Kenya is a member of the Convention establishing the World Intellectual

Property Organization (WIPO), the Paris Convention for the Protection of Industrial Property and the Patent Co-operation Treaty. Kenya is a signatory to the Madrid Agreement Concerning the International Registration of Marks.

BankruptcyBankruptcies are governed by the Bankruptcy Act (2009); creditors’ rights are comparable to those in other common law countries. Monetary judgments typically are made in Kenyan shillings. The World Bank’s 2014 Doing Business Report puts Kenya at 123 of 189 countries in the “resolving insolvency” category. This is down 22 rankings from 2013. The report states that 4.5 years are typically required to close an estate in Kenya, at a cost of 22 percent of the estate. Estates are sold as a going concern, and the recovery rate is 24.7 cents on the dollar.

Competition LawThe Competition Authority of Kenya regulates Kenyan competition law and its enforcement. They regulate mergers, abuse of dominance, and other competition and consumer – welfare related issues in Kenya. They have recently imposed a filing fee for mergers and acquisitions, set at one million shillings (USD 11,554) for mergers involving turnover of between one and 50 billion shillings (USD 11.6 million to USD 578 million), while two million shillings (USD 23,108) will be charged for larger mergers. All mergers and acquisitions require the Authority’s authorization before they are finalized.

Kenya has signed various bilateral investment agreements to guarantee further protection of investment from countries with whom Kenya has signed the agreement with. Kenya is a member of the Multilateral Investment Guarantee Agency (MIGA), the Africa Trade Insurance Agency (ATI) and the International Centre for Settlement of Investment Disputes (ICSID) which arbitrates cases between foreign investors and host governments.


Special Economic Zones9


9.1. Kenya’s Export Processing Zones Authority (EPZA)The first Export Processing Zone (EPZ) program was established in 1990 to provide an attractive investment opportunity for export-oriented business ventures within designated areas or zones. This sought to help the economy through increased productive capital investment, jobs generated, technology transferred, backward linkages developed and diversified exports.

Managed and promoted by the Export Processing Zone Authority, the scheme offers a range of attractive incentives to ensure low cost operations, fast set-up, smooth operations and high profitability. An effective one-stop-shop service at the EPZ authority facilitates the investment process.

Singularly and collectively, the seven Export Processing Zones (EPZs) strategically located across the country constitute an economic proposition that makes a compelling case for companies and businesses to contemplate. Kenya is a fiscally sensible destination for assured returns on their investments while engaging in planned and sustainable development of the national economy and providing employment to the country’s workforce. The individual EPZs are located in the capital city Nairobi, Athi River (only 25 km from Nairobi), the Indian Ocean port city of Mombasa, nearby Kilifi and Malindi along Kenya’s North coastline, Voi and Kimwarer in the country’s inland Rift Valley region. Together they are constituted under the umbrella of and managed and promoted by the Export Processing Zones authority (ePZa).

As a catalyst for investment and economic growth, the EPZA has conceived programmes and policies that are intended to foster a bright investment for investors and further encourage them to take advantage of the numerous opportunities the country offers by virtue of its distinctive location as the ‘gateway to East Africa’, investor-friendly fiscal and monetary policies, supportive political framework, well established private sector, entrepreneurial facilities and social amenities and the quality of life in the country.

The EPZA welcomes all export-oriented investments but is particularly keen to develop projects and attract companies in the areas of food processing, fresh produce, packaging for shelf-ready products, wooden products, leather and animal based products, jewelry and gemstones, pharmaceutical products and herbal medicines, medicinal supplies, cosmetic and personal care products, packaging products, textiles, commercial handicrafts, transport equipment, electronic and electrical goods, building materials & furnishings, data processing & audio-visual services, and consultancy and professional services.

Tax benefits under EPZAFollowing are the tax benefits for investors:

• 10 year corporation tax holiday and 25% tax thereafter;• 10 year withholding tax holiday;• Stamp duty exemption;• 100% investment deduction on initial investment applied

over 20 years; • Perpetual duty and Vat exemption on company input

including machinery, spare parts , construction material, raw materials, office equipment, packaging, heavy diesel and fuel oil, excluding other petroleum based fuel, motor vehicles that are from outside the zone and motor vehicle spare parts.

9.2. Industrial ParksKenya’s Vision 2030 recognizes SME Industrial and Technology Parks as important vehicles through which the growth of Kenya’s manufacturing sector can be fast-tracked.

Industrial and Technology parks are key elements of the infra-structure supporting the growth of today’s global knowledge economy.

By providing a location in which government, private sector and universities cooperate, these parks create environments that foster collaboration and innovation

Industrial Park Strategic Objectives• To facilitate transfer of technology and promote local knowl-

edge-based enterprises;• To create an environment for inventiveness and innovation;• To stimulate and manage the flow of knowledge and

technology amongst university, R&D institutions, companies and markets;

• To provide other value added services together with high quality space and services;

• To translate government policies into sectoral strategies and action plans.

Priority Sectors• Agro-processing; • Agro-machinery;• Electric and electronics; • Metal; • Bio-technology;• ICT;• Packaging.

9. Special Economic Zones

Vision 2030

Social Pillar

Political Pillar

Economic Pillar

Promotion of

innovation and

invention

Business Incubation

Provision of Business

Development Services

Market Linkages

Transfer of Technology

Graduating at least 30 SME’s benefiting 200,000 people annally

INDUSTRIAL AND TECHNOLOGY PARK

Link to Vision 2030


9.1. Kenya’s Export Processing Zones Authority (EPZA)The first Export Processing Zone (EPZ) program was established in 1990 to provide an attractive investment opportunity for export-oriented business ventures within designated areas or zones. This sought to help the economy through increased productive capital investment, jobs generated, technology transferred, backward linkages developed and diversified exports.

Managed and promoted by the Export Processing Zone Authority, the scheme offers a range of attractive incentives to ensure low cost operations, fast set-up, smooth operations and high profitability. An effective one-stop-shop service at the EPZ authority facilitates the investment process.

Singularly and collectively, the seven Export Processing Zones (EPZs) strategically located across the country constitute an economic proposition that makes a compelling case for companies and businesses to contemplate. Kenya is a fiscally sensible destination for assured returns on their investments while engaging in planned and sustainable development of the national economy and providing employment to the country’s workforce. The individual EPZs are located in the capital city Nairobi, Athi River (only 25 km from Nairobi), the Indian Ocean port city of Mombasa, nearby Kilifi and Malindi along Kenya’s North coastline, Voi and Kimwarer in the country’s inland Rift Valley region. Together they are constituted under the umbrella of and managed and promoted by the Export Processing Zones authority (ePZa).

As a catalyst for investment and economic growth, the EPZA has conceived programmes and policies that are intended to foster a bright investment for investors and further encourage them to take advantage of the numerous opportunities the country offers by virtue of its distinctive location as the ‘gateway to East Africa’, investor-friendly fiscal and monetary policies, supportive political framework, well established private sector, entrepreneurial facilities and social amenities and the quality of life in the country.

The EPZA welcomes all export-oriented investments but is particularly keen to develop projects and attract companies in the areas of food processing, fresh produce, packaging for shelf-ready products, wooden products, leather and animal based products, jewelry and gemstones, pharmaceutical products and herbal medicines, medicinal supplies, cosmetic and personal care products, packaging products, textiles, commercial handicrafts, transport equipment, electronic and electrical goods, building materials & furnishings, data processing & audio-visual services, and consultancy and professional services.

Tax benefits under EPZAFollowing are the tax benefits for investors:

• 10 year corporation tax holiday and 25% tax thereafter;• 10 year withholding tax holiday;• Stamp duty exemption;• 100% investment deduction on initial investment applied

over 20 years; • Perpetual duty and Vat exemption on company input

including machinery, spare parts , construction material, raw materials, office equipment, packaging, heavy diesel and fuel oil, excluding other petroleum based fuel, motor vehicles that are from outside the zone and motor vehicle spare parts.

9.2. Industrial ParksKenya’s Vision 2030 recognizes SME Industrial and Technology Parks as important vehicles through which the growth of Kenya’s manufacturing sector can be fast-tracked.

Industrial and Technology parks are key elements of the infra-structure supporting the growth of today’s global knowledge economy.

By providing a location in which government, private sector and universities cooperate, these parks create environments that foster collaboration and innovation

Industrial Park Strategic Objectives• To facilitate transfer of technology and promote local knowl-

edge-based enterprises;• To create an environment for inventiveness and innovation;• To stimulate and manage the flow of knowledge and

technology amongst university, R&D institutions, companies and markets;

• To provide other value added services together with high quality space and services;

• To translate government policies into sectoral strategies and action plans.

Priority Sectors• Agro-processing; • Agro-machinery;• Electric and electronics; • Metal; • Bio-technology;• ICT;• Packaging.

9. Special Economic Zones

Vision 2030

Social Pillar

Political Pillar

Economic Pillar

Promotion of

innovation and

invention

Business Incubation

Provision of Business

Development Services

Market Linkages

Transfer of Technology

Graduating at least 30 SME’s benefiting 200,000 people annally

INDUSTRIAL AND TECHNOLOGY PARK

Link to Vision 2030


International Organizations Membership, Market Access, and Special Trade Regimes

10


10. International Organizations Membership, Market Access, and Special Trade RegimesCommon Market for Eastern and Southern AfricaKenya is one of the 19 member states forming the Common Market for Eastern and Southern Africa (COMESA), the largest Regional Economic Community (REC) in Africa, with a population of over 470 million, and a combined GdP of over usd 640 billion. COMESA offers duty-free access to 16, and soon 17, of its Member States. Having successfully launched its Customs Union in 2009, COMESA is continuing on the road of regional integration by supporting the continual creation of better investment conditions, making it an increasingly internationally competitive economic community.

COMESA Member States include: Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia & Zimbabwe.

Also to be taken into consideration is the Tripartite Free Trade Area under negotiation between COMESA, the Southern African development community (sadc) and east african community (EAC), covering a market of over 620 million inhabitants, 26 countries, and a combined GdP of almost usd 1.2 trillion.

East African Communitythe east african community is a fully-function customs union composed of five Member States including Burundi, Kenya, Rwanda, Tanzania and Uganda, with a market of 147 million and a total GDP of USD 111 billion. The EAC Common Market was launched in 2010, and the negotiations for the East African Monetary Union, which commenced in 2011 and fast tracking of the east african federation all underscore the serious determination of the east african leadership and citizens to construct a powerful and sustainable East African economic and political block.

Multilateral Investment Guarantee Agency (World Bank) and African Trade Insurance Agency (ATI)miGa is a member of the World bank Group with a mission is to promote foreign direct investment (FDI) into developing countries by providing political risk insurance guarantees to private sector investors and lenders. Ethiopia is among its 181 members. MIGA’s guarantees protect investments against non-commercial risks and can help investors obtain access to funding sources with improved financial terms and conditions.

Bilateral Investment Agreements Kenya is a beneficiary of the African Growth and opportunity act (AGOA), which helps it export textile, garment, and other goods to the United States. Kenya has signed bilateral investment agreements with Burundi, China, Finland, France, Germany, Iran, Italy, Libya, the Netherlands, Slovakia, Switzerland, and the United Kingdom, although only those with France, Germany, Italy, the Netherlands, Switzerland, and the United Kingdom have entered into force.

The EAC is also in the process of renewing an Economic Partnership Agreement with the EU, with both sides optimistic about negotiations concluding in upcoming months despite some remaining hurdles.

Double Taxation AgreementsKenya has ratified Double Taxation agreements with the following countries: Zambia, Norway, Denmark, Sweden, UK, Germany, Canada and India, has signed but not put into force agreements with Italy, Tanzania and Uganda, and is currently negotiating with France, Thailand, Seychelles, Nigeria, South Africa, Mauritius, finland, russia, uae, and iran.


Infrastructure and Cost of Doing Business

11


Infrastructure and Cost of Doing Business

11


11. Infrastructure and Cost of Doing Business11.1. Air TransportJomo Kenyatta International Airport (JKia) is considered the regional hub for air transport and a number of carriers call on Nairobi for passenger and cargo traffic. It is the biggest airport in Eastern and Central Africa. For the past 2 to 3 years, JKIA has witnessed a significant boost in air cargo traffic between Asia and europe. there has also been a notable rise in imports from the Middle East and Asian countries making it an emerging force and destination in the air cargo industry. The airport is endowed with distinctive features such as:

• Modern cargo facilities with planned and ongoing capacity expansion;

• It is a natural logistical and geographical hub, providing easy access from Nairobi to regional capitals and timely connections to europe, the middle east, asia and the far East;

• A well-established horticultural industry attracting cargo airlines to Nairobi for air cargo exports/imports

• Nairobi is the main entry to Kenya and the regional

economic and trade centre advantages experienced by air cargo carriers at JKIA;

• Market: robust and untapped potential;• Speed: short turnaround time;• Slots: adequate slots for up to 8 wide bodied freighters at

any one time for offloading/ loading; • Solutions: tailor made for freighters with transit sheds, ramp

handlers, forwarders, industry and authorities. Air Cargo Kenya is currently at second position after south africa in cargo volume of 350,000 metric tonnes of horticultural produce exportation with a growth rate of 5%. JKIA currently has 5 cargo sheds and an apron that can accommodate 8 wide bodied aircraft at any given time to facilitating the processing and exportation of these produce. Cargo facilities are being developed and expanded at the eldoret international airport, Kisumu international airport and malindi airport.

11.2. Land TransportKenya has an extensive network of paved and unpaved roads. Kenya’s railway system links the nation’s ports and major cities and connects Kenya with neighboring Uganda.

According to the Kenya Roads Board, Kenya has 160,886 kilometres (99,970 mi) of roads with all but 11,189 km (6,953 mi) unpaved.

Rates for Airfreight Exports

Documentation charges Kshs 2,000 per shipment

Agency fee Kshs 0.45% of cif value (min. Ksh 5,000)

Transport (within city limit) Kshs 4,500(minimum Kshs 3,000)

Kaa concession fee (at cost) Kshs 250 per aWb

Ground Handling charges at cost (Kahl, achl, csc, etc.)

Airway bill fee at cost

commission on disbursement 3.0% of outlays, min. Kshs 2,000

Extra to be charged at cost 16% VAT ON Agency fee/Transport /Ground Handling Agent/ Airline charges and any other miscellaneous charged at cost.

Class Description Purpose Roads Paved Unpaved Total (in km)

a international Trunk Roads

Link centres of international importance and cross international boundaries or terminate at international ports or airports.

a1, a2, a3, a14, a23, a104, a109

2,772 816 3,588

b National Trunk roads

Link nationally important centres (e.g. Provincial headquarters).

b1, b3, b8 1,489 1,156 2,645

c Primary roads Link provincially important centres to each other or to higher class roads (e.g. district headquarters).

c107, c111, c115

2,693 5,164 7,857

d secondary roads

Link locally important centres to each other, or to more important centres or to a higher class road (e.g. divisional headquarters).

1,238 9,483 10,721

e minor roads Any link to a minor centre. 577 26,071 26,649


sPr special Purpose roads

Government roads (G) settlement roads (l) rural access roads (r) Sugar Roads (S)tea roads (t) Wheat roads (W)

100 10,376 10,476

u Unclassified roads

all other public roads and streets 2,318 96,623 98,941

all total all public roads and streets

11.3. Rail TransportThe Kenya railway network, managed by the Kenya Railways Corporation, totals 2,066 km. The Kenya Railways Corporation was established by an Act of Parliament (Cap 397) of the Laws of Kenya, and commenced operations on January 20, 1978. The overall mandate of the Corporation then was to provide a coordinated and integrated system within Kenya of rail and inland waterways transport services and inland port facilities.

The Act was amended through The Kenya Railways (Amendment) Act 2005 to make it possible for the Board of Directors to enter into concession agreements or other forms of management for the provision of rail transport services. Following this Amendment, KR conceded railway operations to Rift Valley Railways Ltd (K) from November 1, 2006 for 25 years for freight services and 1 year for passenger services.

Kenya Railways (KR) is mandated to promote, facilitate and participate in the National and Metropolitan Railway development. In this regard, KR is currently involved in the following initiatives:

• Developing a Standard Gauge Railway network within the country and connected to neighbouring countries;

• Developing rail commuter services within and around major towns in Kenya (Nairobi, Mombasa, Nakuru, Eldoret and Kisumu).

The current rail network in Kenya is the metre gauge commonly referred to as ‘The Lunatic Line’. It was initially named the ‘Uganda Railway’ after its destination. Its construction began in the Port city of Mombasa in 1896 and was completed in 1901 at the lines terminus in Kisumu. operations on the line commenced in 1903. The Lunatic Line links Kampala in Uganda with the Indian Ocean town of Mombasa.

Branch lines were built to Thika in 1913, Lake Magadi in 1915, Kitale in 1926, naro moru in 1927 and from tororo to soroti in 1929. In 1929, the Uganda railway became Kenya Uganda Railways & Habours. In 1931, a branchline to Mount Kenya was completed and the main line was extended from Nakuru to Kampala in Uganda.

The line is 1,000 mm and is a single track all through with occasional sidings and passing points to deal with opposing traffic. Construction was carried out by labourers brought in from india. after completion, some of the indians remained behind thus creating the Indian community in East Africa.

The line was a huge logistical achievement and became strategically and economically vital for Kenya, linking the Indian Ocean with Lake Victoria and the East African interior. Branch lines were built and the railway became an essential part of safari adventures in the early decades of the 20th century.

Concession of the Kenya Uganda RailwaysRecognizing the historical links between Kenya Railways and Uganda Railways, the mutual dependency of the railways on each other and the potential benefits to be derived by concessioning the railways jointly, in June 2003, the Governments of the two countries made a strategic decision that Kenya Railways (KR) and Uganda Railways (UR) should be concessioned jointly.

on 1st November last year, Rift Valley Railways (K) took over passenger and rail transport services for a period 1 year (renewable) and 25 years respectively from Kenya and Uganda Railways.

RVR is currently undertaking a number of initiatives aimed at improving quality of service and increase hauling capacity. The initiatives include:

• Acquisition of a tamping machine and a ballast regulator. These are high performance, fully automated equipment that will boost track maintenance and rehabilitation

• Acquisition of a new fleet of 20 locomotives from General electric in the us.

• Installation of Global Positioning System based software on trains. This allows online visualization of train movement from an operations control center in nairobi.

• Use of train simulators to train locomotive drivers;• Locomotives and wagon overhaul and rehabilitation;• Culverts replacement and track rehabilitation.

11.4. Sea Transportationthe port of mombasa is the Principal Kenyan seaport and comprises of Kilindini harbour and Port reitz on the eastern side of the mombasa island and the old Port and Port tudor north of the mombasa island.

Kilindini is naturally deep and well sheltered and is the main harbour where most of the shipping activities take place. It has 16 deep water berths, two oil terminals and safe anchorages and mooring buoys for sea-going ships.

The Old Port is entered between Ras Serani and Mackenzie Point and is used only by dhows and small coasting vessel of 55 metres LOA. A cement loading facility is located opposite the old port jetty at Ras Kidomoni (English Point) for bulk cement carriers of up to 150 metres LOA and 8.0 metres draught.

the Port of mombasa not only serves Kenya but is also the main gateway to the Eastern African hinterland countries of Uganda, Rwanda, Burundi, DRC and Southern Sudan.

The port of Mombasa is managed and operated by the Kenya


Ports Authority (KPA) a semi-autonomous government parastatal.

KPA also manage the small sea ports of Kiunga, Lamu, Malindi, Kilifi, Mtwapa, Funzi, Shimoni, and Vanga.

KPa vision is to transform the port of mombasa into one of the top 20 ports in the world by the year 2010.KPA launched its 25 year Master Plan and Strategic Plan in 2005 which aim at transforming the port into an E-Port and landlord port by 2010.

the port of mombasa recently invested over 5 billion Kenya shillings in new cargo handling equipment and marine craft under its equipment replacement plan

KPA is ISPS compliant and is in the process of installing an integrated security system and constructing a control tower fitted with radar monitoring and traffic management system to enhance security.

Facilities and ServicesThe port is a multi-purpose port capable of handling all type of cargo including containers, general cargo, liquid and dry cargo and passengers. It has the following facilities:

• 16 Deep water berths and 2 oil terminals draft ranging between 9.75 and 13.25 meters

• Deep water anchorages and mooring buoys for sea-going ships.

The Container Terminalberths 16, 17 and 18 form the container terminal. the three berths form a 600 meters quay length with a draft of 10.36 meters. Designed capacity 250000 TEUs annually. Medium size container ships of up to 2300 teus can be accommodated. there is a 250 meters deep back-up area of 14 hectors for stacking and handling containers.

the terminal is served by 4 sts, 12 rtGs and 2 rmG all acquired in 2005 and a number of other terminal handling equipment.

The designed capacity of the terminal has almost been doubled. In 2004 over 430,000 TEUs were handled. In view of this Berths 13 and 14 are used as container berths. Ships use their own cranes as no gantry cranes are installed on these berths.

General Cargo BerthsBerths 1 to 12 are general cargo berths for handling general cargo ships carrying loose cargo, steel products, bagged cargo etc. Berth 1 and 2 are designated as cruise ship berths and can handle cruise ships of up to 300 meters length and 9.75 meters draft.

Ro-Ro facilities are available at the general cargo berths mostly

berths 1 and 5. The General cargo berths are served by electric luffing portal cranes with capacity of 3 to 15 tonnes and supplemented by fork lifts, trailers and mobile cranes.

The Oil TerminalsThere are two main oil terminals:

• Kipevu oil terminal, situated on the mainland Port reitz area, is designed to accommodate crude oil tankers up to 100,000 dwt, depth alongside 13.41 metres at LOWST, maximum LOA 259 metres;

• shimanzi oil terminal can accommodate vessels up to 30,000 dwt, 198.1 metres LOA, and 9.75 metres draught. Slop tank facilities available.

Vegetable oil handling and storage facilities are available at the Mbaraki Wharf, Berth 10 and SOT and are operated by two private companies Gulf Stream and East African Storage.

Specialised Bulk Handling FacilitiesA modern grain bulk handling facility owned and operated by GBHL is located at Berth 3 and is capable of handling ships of up to 45,000 tons deadweight with 10 meters draft. Discharge is by a combined system of Portolinos and conveyor belts. Discharge rate is 200 metric tons an hour and storage capacity is 68000 tons on silos and 18,000 tons on covered shades.

At the Mbarki wharf facilities are provided for handling bulk/ bagged cement, fluorspar, coal, clinker, molasses and bulk petroleum and vegetable oil. The Wharf is 315.75 metres long with 10.36 metres depth. Several private companies including Bamburi Portland, Kenya Fluorspar, East African Storage and Tecaflex have storage facilities behind the wharf.

Beth 9 caters for the loading of soda ash by means of a conveyor belt and is operated by Magadi Soda who are the sole exporters of soda ash

Nautical Accessthe entrance from the sea to Kilindini harbour is by an approach channel 7 nautical miles long, 300 metres wide and dredged to a maximum depth of 13.7 (1997). The channel is well marked by solar powered buoys and leading marks as per IALA system A requirements. Two traffic control stations direct and monitor the movement of ships in the channel. inside the inner harbour deep and safe anchorages are provided for sea-going ships with draft of up to 13.8m. siltation is minimum in Kilindini harbour and maintenance dredging is done every 5 years.

Anchorage for coasters and fishing vessels is also available. Anchorage outside port area is not recommended due to the poor holding ground and heavy swell.


Stevedoring – Containerized Cargo

Charges on standard 20 feet (20’) and 40 feet (40’) ISO containers to/from Ship, per move

Rate per Move (20’) Rate per Move (40’)

1 Discharging, loading, shifting within the hold or shifting on deck without landing and vice –versa without landing, on cellular vessel.

usd 90 usd 135

2 Discharging, loading, shifting within the hold or shifting on deck without landing and vice –versa on non-cellular vessel.

usd 110 usd 165

3 Discharging, loading, shifting within the hold or shifting on deck without landing and vice –versa on a Ro-Ro vessel

usd 70 usd 105

4 transhipment containers usd 80 usd 120

5 Over-landed, Shipped and re-landed, landed and re-Shipped or shifted from hold to hold containers shall be charged 1.5 times the rates applicable in clause 1 to 3

6 Empty containers shall be charged at 60%of the rate shown in 1 to 4

7 Containers holding in whole or in part dangerous cargo shall be surcharged at 10% above rates in 1 to 4

8 Out of Gauge container (Export/Import) usd 180 usd 270

Shore-handling – Containerized cargo

Rate per Unit (20’) Rate per Unit (40’)

1 imports – domestic usd 90 usd 135

2 exports – domestic usd 45 usd 68

3 imports – empty usd 20 usd 30

4 Exports – Empty (except direct loadings) usd 20 usd 30

5 imports – transit usd 72 usd 110

6 exports –transit usd 35 usd 55


Containers remaining in the Authority’s premises in excess of free periods shall accrue storage charges as follows:

Storage – rate per day or part thereof

20’ 40’

1 Domestic import containers, first 7 consecutive days free free

2 domestic import containers, thereafter up to the date container is removed from the Port or is customs warehouse due.

usd 25 usd 37.50

3 Domestic export containers, first 11 consecutive days free free

4 domestic export containers, thereafter up to the date container is nominated or withdrawn

usd 30

5 Transit import containers, first 15 consecutive days free free

6 transit import containers, thereafter up to the date container is removed from the Port or is customs warehouse due

usd 20 usd 30

7 Domestic and transit export containers through ICDs, first 15 consecutive days free free

8 Domestic and transit export containers through ICDs, thereafter up to the date container is nominated or withdrawn

usd 20 usd 30

9 Shut-out export containers, first 2 consecutive days free free

10 Shut-out export containers, thereafter up to the date container is re-nominated or withdrawn

usd 20 usd 30

11 Domestic import containers through ICDs, first 11 consecutive days free free


Stevedoring – Containerized Cargo

Charges on standard 20 feet (20’) and 40 feet (40’) ISO containers to/from Ship, per move

Rate per Move (20’) Rate per Move (40’)

1 Discharging, loading, shifting within the hold or shifting on deck without landing and vice –versa without landing, on cellular vessel.

usd 90 usd 135

2 Discharging, loading, shifting within the hold or shifting on deck without landing and vice –versa on non-cellular vessel.

usd 110 usd 165

3 Discharging, loading, shifting within the hold or shifting on deck without landing and vice –versa on a Ro-Ro vessel

usd 70 usd 105

4 transhipment containers usd 80 usd 120

5 Over-landed, Shipped and re-landed, landed and re-Shipped or shifted from hold to hold containers shall be charged 1.5 times the rates applicable in clause 1 to 3

6 Empty containers shall be charged at 60%of the rate shown in 1 to 4

7 Containers holding in whole or in part dangerous cargo shall be surcharged at 10% above rates in 1 to 4


Shore-handling – Containerized cargo

Rate per Unit (20’) Rate per Unit (40’)

1 imports – domestic usd 90 usd 135

2 exports – domestic usd 45 usd 68

3 imports – empty usd 20 usd 30

4 Exports – Empty (except direct loadings) usd 20 usd 30

5 imports – transit usd 72 usd 110

6 exports –transit usd 35 usd 55


Containers remaining in the Authority’s premises in excess of free periods shall accrue storage charges as follows:


20’ 40’

1 Domestic import containers, first 7 consecutive days free free

2 domestic import containers, thereafter up to the date container is removed from the Port or is customs warehouse due.

usd 25 usd 37.50

3 Domestic export containers, first 11 consecutive days free free

4 domestic export containers, thereafter up to the date container is nominated or withdrawn

usd 30

5 Transit import containers, first 15 consecutive days free free

6 transit import containers, thereafter up to the date container is removed from the Port or is customs warehouse due

usd 20 usd 30

7 Domestic and transit export containers through ICDs, first 15 consecutive days free free

8 Domestic and transit export containers through ICDs, thereafter up to the date container is nominated or withdrawn

usd 20 usd 30

9 Shut-out export containers, first 2 consecutive days free free

10 Shut-out export containers, thereafter up to the date container is re-nominated or withdrawn

usd 20 usd 30

11 Domestic import containers through ICDs, first 11 consecutive days free free


Port Authorities

20’ 40’

1 Re-Marshalling charge usd 165

2 Storage local containers first 3 days/ per day usd 30 usd 60

3 Storage local containers next 8 days/ per day usd 35 usd 70

4 Storage local containers next 9 days/ per day usd 40 usd 80

5 Storage local containers thereafter/ per day usd 45 usd 90

6 Storage transit containers, first 2 days/ per day usd 30 usd 60

7 Storage transit containers, next 7 days/ per day usd 35 usd 70

8 Storage transit containers, next 6 days/ per day usd 40 usd 80

9 Storage transit containers, thereafter/ per day usd 45 usd 90

10 Shipping lines, container demurrage charge, first 7 days usd 4.00 to usd 10.00

usd 8.00 to usd 20.00

11 Shipping lines, container demurrage charge, next 7 days usd 10.00 to usd 20.00

usd 20.00 to usd 40.00

12 Shipping lines, container demurrage charge, thereafter usd 14.00 to usd 30.00

usd 28.00 to usd 60.00

13 customs authorities Customs warehouse rent at USD 0.30 per metric ton per working day

12 Domestic import containers through ICDs, first 11 thereafter up to the date container is removed from the Port or is customs warehouse due

usd 20 usd 30

13 Transit Import containers through ICDs, first 15 consecutive days free free

14 Transit Import containers through ICDs, thereafter up to the date container is removed from the depot or is customs warehouse due.

usd 20 usd 30

15 Transit export containers, first 21 consecutive days free free

16 transit export containers, thereafter up to the date container is nominated or withdrawn

USD 16 usd 24

17 Dangerous cargo, from date of receipt or landing (export/ import) usd 40 usd 60

18 Out of Gauge containers (export/ import), first 2 consecutive days free free

19 Out of Gauge containers (export/ import), thereafter up to the date container is removed from the Port or shipped

usd 40 usd 60

20 FCL Containers unmanifested/ unknown status from date of landing up to the date status is known

usd 25 usd 37.50

21 Change of Status/ destination (C10), from arrival of the vessel up to the date charges are secured

usd 25 usd 37.50

22 Empty import containers, first 2 consecutive days from stripping day free free

23 empty import containers, thereafter, until the container is removed from the Port or loaded onto a vessel.

usd 15 usd 22.50

24 Empty export containers, from date of receipt, first 4 consecutive days free free

25 empty export containers, thereafter, until the container is removed from the Port or loaded onto a vessel

usd 15 usd 22.50

26 Transshipment full container, first 30 consecutive days from arrival of the vessel free free

27 Transshipment full container, thereafter up to the date container is re-shipped usd 20 usd 30

28 Transshipment full container, thereafter up to the date container is re-shipped free free

29 Empty transshipment containers, thereafter up to the date container is re-Shipped usd 15 usd 22.50

30 Over landed full container, from first day of landing to the date of re-shipment usd 25 usd 37.50

31 Empty over landed containers from the date of landing usd 15 usd 22.50

Source: KPA


11.5. Utilities/ Electricity

Indicator Kenya Sub-Saharan Africa OECD

Procedures (number) 6.0 5.5 4.7

time (days) 158.0 138.3 76.8

cost (% of income per capita) 1,020.2 4,348.5 73.2


No. Procedure Time to Complete Associated Costs

1 Submit application to Kenya Power and Lighting Company Ltd (KPLC) and await site inspection

28 calendar days Kes 0

2 Receive site visit from KPLC and await estimate 21 calendar days Kes 0

3 Customer pays estimate and signs supply contract 1 calendar day Kes 860,000

4 customer calls utility and collects meter and meter number 13 calendar days Kes 0

* 5 customer obtains excavation permit from city council and submits to utility 5 calendar days Kes 7,500

6 KPLC conducts external connection works, meter installation and electricity starts flowing

95 calendar days Kes 0

Source: World Bank Doing Business 2014

Structure of Proposed Tariff Consumption Category Proposal by the WSP Water Services Regulatory Board

Recommendation

domestic, commercial and industrial• 0 – 6 m3• 7 – 60 m3• more than 60 m3

• Flat fee: KES 200• Kes 56• Kes 90


schools and institutions• 0 – 6 m3• 7 – 60 m3• more than 60 m3


• 0 – 600 m3 – Kes 48• 600 – 1200 m3 – Kes 55• more than 1200 m3 – Kes 60

flats and Gated communities KES 60/ m3 KES 53/ m3

TariffCharges (KES)

Fixed charge Energy charge (per kWh) Demand charge (per kVA)

DC (Domestic, 240 V) 150 First 50kWh: 2.5050 to 1 500kWh: 13.68 Thereafter:21.57

N/A

SC (Small Commercial, 240 V) 150 14.00 N/A

CI1 (Commercial, 415 V) 2 000 9.45 800

CI2 (Commercial, 11 kV) 4 500 8.25 520

CI3 (Commercial, 33 kV) 5 500 7.75 270

CI4 (Commercial, 66 kV) 6 500 7.55 220

CI5 (Commercial, 132 kV) 17 000 7.35 220

IT (Domestic water heating) 150 13.75 n/a

11.6. Water TariffsAccording to the Water Services Regulatory Board, below are the key highlights of the regular water tariff adjustments, for Nairobi, as of November 2014:


11.8. Construction Permits



time (days) 125.0 155.7 149.5

Cost (% of warehouse value) 9.3 6.2 1.7


11.7. Starting a Business

indicator Kenya Sub-Saharan Africa oecd


time (days) 30.0 27.3 9.2

cost (% of income per capita) 42.7 56.2 3.4

Paid-in min. capital (% of income per capita) 0.0 95.6 8.8


1 reserve a unique company name at the Companies Registry

1 day on average Kes 100 per name reservation


5 days 1% of nominal capital (Kes 20 for every Kes 2,000 or part thereof of capital) + Kes 2,000 for stamp duty on memorandum and articles of association

3 Pay stamp duty at a designated bank 1 day KES 100 for bank commission

4 Sign the Declaration of Compliance before a commissioner of oaths or a notary public

1 day Kes 200

5 Register with the Registrar of Companies at the attorney General chambers in nairobi

12 days on average Kes 7,360

6 Register for taxes at the Kenya Revenue authority

1 day no charge

7 apply for a business permit 5 days Kes 15,000

8 Register with the National Social Security Fund (nssf)

1 day no charge

9 Register with the National Hospital Insurance fund (nhif)

1 day no charge

10 Make a company seal 2 days between KES 2,500 and KES 3,500



1 Submit architectural plan for approval and obtain provisional building permit 30 days Kes 335,439

2 Submit and obtain structural plan approval and final building permit 10 days no charge

3 obtain a project report from an environmental expert 5 days Kes 50,000

4 obtain approval of the environmental impact study 30 days Kes 2,126

5 Request and receive final inspection by the Municipal Authority after construction 5 days no charge

6 Obtain occupancy certificate 14 days no charge

7 Apply for water and sewerage connection 1 day Kes 1,100

8 Pay water and sewerage installation costs and obtain connection 30 days Kes 6,000



11.8. Construction Permits



time (days) 125.0 155.7 149.5

Cost (% of warehouse value) 9.3 6.2 1.7


11.7. Starting a Business

indicator Kenya Sub-Saharan Africa oecd


time (days) 30.0 27.3 9.2

cost (% of income per capita) 42.7 56.2 3.4

Paid-in min. capital (% of income per capita) 0.0 95.6 8.8


1 reserve a unique company name at the Companies Registry

1 day on average Kes 100 per name reservation


5 days 1% of nominal capital (Kes 20 for every Kes 2,000 or part thereof of capital) + Kes 2,000 for stamp duty on memorandum and articles of association

3 Pay stamp duty at a designated bank 1 day KES 100 for bank commission

4 Sign the Declaration of Compliance before a commissioner of oaths or a notary public

1 day Kes 200

5 Register with the Registrar of Companies at the attorney General chambers in nairobi

12 days on average Kes 7,360

6 Register for taxes at the Kenya Revenue authority

1 day no charge

7 apply for a business permit 5 days Kes 15,000

8 Register with the National Social Security Fund (nssf)

1 day no charge

9 Register with the National Hospital Insurance fund (nhif)

1 day no charge

10 Make a company seal 2 days between KES 2,500 and KES 3,500



1 Submit architectural plan for approval and obtain provisional building permit 30 days Kes 335,439

2 Submit and obtain structural plan approval and final building permit 10 days no charge

3 obtain a project report from an environmental expert 5 days Kes 50,000

4 obtain approval of the environmental impact study 30 days Kes 2,126

5 Request and receive final inspection by the Municipal Authority after construction 5 days no charge

6 Obtain occupancy certificate 14 days no charge

7 Apply for water and sewerage connection 1 day Kes 1,100

8 Pay water and sewerage installation costs and obtain connection 30 days Kes 6,000



11.9. Registering Properties



time (days) 72.0 57.2 24.0

cost (% of property value) 4.3 9.1 4.2


11.10. Taxes

Tax or mandatory contribution

Payments (number)

Notes on Payments

Time (hours) Statutory tax rate Tax base Total tax rate

(% profit)Notes on TTR

Corporate income tax 5 43 30% taxable profit 30.80

Standards levy 2 0.2% net sales 3.54

Employer paid - Social security contributions (NSSF)

12 51 5% gross salaries 1.52

Single business permit - manufacturer

1 Kes 100,000 fixed fee 1.06

Tax on interest 0 15% interest income

0.38 included in other taxes

Employer paid - Training or apprentice tax

2 Kes 600 per employee

number of employees

0.38

Land rates 1 0.6% land value 0.30

Road maintenance levy 0 paid jointly Kes 9 per liter fuel consumption

0.28

Advance motor vehicle tax 1 Kes 1,500 per ton vehicle weight

0.24 included in other taxes

Single business permit - trader

1 Kes 20,000 fixed fee 0.21


1 Apply and Obtain Land Rent Clearance Certificate from the commissioner of lands

19 days (simultaneous with Procedures 2 and 3)

no cost

* 2 Apply, pay and obtain Rates Clearance Certificate from the nairobi city council

5 days (simultaneous with Procedure 1 & 3 )

Kes 10,000

* 3 Apply for a search on the title at the Lands Office 3 days (simultaneous with Procedures 1 and 2)

Kes 500

4 apply and obtain consent to transfer from the commissioner of lands

9 days Kes 1,000

5 File the transfer instrument at the Lands Office and obtain appointment for valuation

4 days Kes 500

6 receive site inspection by Government valuer and obtain valuation report

20 days no cost

7 endorsement of value for stamp duty purposes and assessment of stamp duty

4 days no cost

8 Payment of Stamp Duty at Commercial Bank and receive confirmation of payment from Kenya Revenue Authority

4 days KES 600 (charge for Banker’s check) + 4% of property value (stamp duty)

9 Lodge stamped transfer document for registration and receive duly registered documents

12 days Kes 500



Nature of Export Procedures Duration (days) US$ Cost

documents preparation 12 305

customs clearance and inspections 4 375

Ports and terminal handling 6 375

Inland transportation and handling 4 1,200

totals 26 2,255


Nature of Import Procedures Duration (days) US$ Cost





totals 26 2,350


11.11. Trading Across Borders

Indicator OECD

documents to export (number) 8

time to export (days) 26.0

cost to export (us$ per container) 2,255.0

Cost to export (deflated US$ per container) 2,255.0

documents to import (number) 9

time to import (days) 26.0

cost to import (us$ per container) 2,350.0

Cost to import (deflated US$ per container) 2,350.0


Petroleum development duty

0 paid jointly Kes 0.4 per liter fuel consumption

0.01

Land rent 1 various rates 0.01

Tax on check transactions 1 KES 2 per check number of checks

0.01

Value added tax (VAT) 1 online filing 108 16% value added 0.00 not included

Fuel tax - excise duty 1 Kes 10.31 per liter

fuel consumption

0.00 small amount

Stamp duty on contracts 1 various rates type of contract

0.00 small amount

Employee paid - Social security contributions (NSSF)

0 paid jointly 5% gross salaries 0.00 withheld

Employee paid - National hospital insurance fund (NHIF)

0 paid jointly various rates gross salaries 0.00 withheld

Totals: 30.0 201.5 38.1



Nature of Export Procedures Duration (days) US$ Cost





totals 26 2,255


Nature of Import Procedures Duration (days) US$ Cost





totals 26 2,350


11.11. Trading Across Borders

Indicator OECD

documents to export (number) 8

time to export (days) 26.0

cost to export (us$ per container) 2,255.0

Cost to export (deflated US$ per container) 2,255.0

documents to import (number) 9

time to import (days) 26.0

cost to import (us$ per container) 2,350.0

Cost to import (deflated US$ per container) 2,350.0


Petroleum development duty

0 paid jointly Kes 0.4 per liter fuel consumption

0.01

Land rent 1 various rates 0.01

Tax on check transactions 1 KES 2 per check number of checks

0.01

Value added tax (VAT) 1 online filing 108 16% value added 0.00 not included

Fuel tax - excise duty 1 Kes 10.31 per liter

fuel consumption

0.00 small amount

Stamp duty on contracts 1 various rates type of contract

0.00 small amount

Employee paid - Social security contributions (NSSF)

0 paid jointly 5% gross salaries 0.00 withheld

Employee paid - National hospital insurance fund (NHIF)

0 paid jointly various rates gross salaries 0.00 withheld

Totals: 30.0 201.5 38.1



Export documents

Bill of lading

Cargo delivery order

Certificate of origin

commercial invoice

customs export declaration

inspection report

Packing List

Terminal Handling receipts

Import documents

Bill of lading

Cargo release order

Certificate of Conformity

commercial invoice

customs import declaration

delivery order

Packing list

Proof of payments of customs duties

Terminal handling receipts



Banking and Financial Services

12


Banking and Financial Services

12


13.1. General Information the financial services sector (fss) in Kenya 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) and Development Finance Institutions; (DFIs). A notable development in Kenya’s financial sector is the mobile banking. Kenya was the first country in the world to launch mobile money, dubbed “M-PESA;” an innovation which allows users to transfer cash using mobile phones. Based upon its success in Kenya, M-PESA is currently under replication in a number of countries across the globe. This makes Kenya is the financial hub of the East African region, helped both by its history as a regional centre and its market size

13.2. Commercial Banks The Kenyan-banking sector comprised of 44 banking institutions as at end of December 2013 and 130 foreign exchange bureaus.

Performance of the Kenyan banking sector in 2013 was as follows: total assets grew by 15.9%, customer deposit base increased by 13.5%, net advances increased by 18.2%, while profit before tax rose to 16.6%. Commercial banks available in Kenya include Kenya commercial Bank (KCB), Equity, Barclays, standard chartered, cooperative, diamond trust, hsbc, citi Bank and Eco Bank among others. The Central Bank of Kenya provides the overall supervisory and regulatory services to financial institutions in the country

The number of bank branches increased from 1,272 in 2012 to 1,342 in 2013, which translated to an increase of 70 branches. The counties that registered increased number of branches include Nairobi, which registered an increase of 12 branches, Kiambu 11 branches and mom¬basa 10 branches as indicated in Appendix XIII. A total of 25 out of 47 counties registered an increase in the number of bank branches indicating increased demand for financial services partly occasioned by increased economic activities following introduction of the county government system.

12. Banking and Financial Services

Commercial Banks Market Share Analysis (Ksh. M)

Peer Group Weighted Market Size

No. of Institutions

Total Net Assets

Customer Deposits

Capital & Reserves

Large 52.4% 6 1,388,641 972,066 239,484

medium 39.1% 16 1,083,250 789,114 157,633

small 8.5% 21 231,503 174,481 35,061

Total* 100.0% 43 2,703,394 1,935,661 432,178Source: Central Bank of Kenya 2014

Banking Sector Performance

Banks Profit Before Tax (KES billion)

Net Assets (KES billion)

Return On Assets (1/2) %

Shareholders Equity (KES

billion)

Return On Equity (1/4) %

Equity Bank Ltd. 18,233 238,194 7.7% 972,066 36.0%

Kenya Commercial Bank Ltd. 17,746 323,312 5.5% 789,114 28.4%

Standard Chartered Bank (K) Ltd. 13,316 220,524 6.0% 174,481 37.0%

Barclays Bank of Kenya Ltd. 11,921 207,010 5.8% 32,371 36.8%

Co-operative Bank of Kenya Ltd. 10,705 228,874 4.7% 35,652 30.0%

Source: Central Bank of Kenya 2014

Banking Sector Market Share – December 2013 – Ksh. M

Market Size Index

Net Assets

% Of The Market

Total Deposits

% Of The Market

Total Capital

% Of The Market

Total Number Of Deposit Accounts (Millions)

% Of The Market

Total Number Of Loan Accounts (Millions)

% Of The Market

Weighting 0.33 0.33 0.33 0.005 0.005


13.1. General Information the financial services sector (fss) in Kenya 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) and Development Finance Institutions; (DFIs). A notable development in Kenya’s financial sector is the mobile banking. Kenya was the first country in the world to launch mobile money, dubbed “M-PESA;” an innovation which allows users to transfer cash using mobile phones. Based upon its success in Kenya, M-PESA is currently under replication in a number of countries across the globe. This makes Kenya is the financial hub of the East African region, helped both by its history as a regional centre and its market size

13.2. Commercial Banks The Kenyan-banking sector comprised of 44 banking institutions as at end of December 2013 and 130 foreign exchange bureaus.

Performance of the Kenyan banking sector in 2013 was as follows: total assets grew by 15.9%, customer deposit base increased by 13.5%, net advances increased by 18.2%, while profit before tax rose to 16.6%. Commercial banks available in Kenya include Kenya commercial Bank (KCB), Equity, Barclays, standard chartered, cooperative, diamond trust, hsbc, citi Bank and Eco Bank among others. The Central Bank of Kenya provides the overall supervisory and regulatory services to financial institutions in the country

The number of bank branches increased from 1,272 in 2012 to 1,342 in 2013, which translated to an increase of 70 branches. The counties that registered increased number of branches include Nairobi, which registered an increase of 12 branches, Kiambu 11 branches and mom¬basa 10 branches as indicated in Appendix XIII. A total of 25 out of 47 counties registered an increase in the number of bank branches indicating increased demand for financial services partly occasioned by increased economic activities following introduction of the county government system.

12. Banking and Financial Services

Commercial Banks Market Share Analysis (Ksh. M)

Peer Group Weighted Market Size

No. of Institutions

Total Net Assets

Customer Deposits

Capital & Reserves

Large 52.4% 6 1,388,641 972,066 239,484

medium 39.1% 16 1,083,250 789,114 157,633

small 8.5% 21 231,503 174,481 35,061

Total* 100.0% 43 2,703,394 1,935,661 432,178Source: Central Bank of Kenya 2014

Banking Sector Performance

Banks Profit Before Tax (KES billion)

Net Assets (KES billion)

Return On Assets (1/2) %

Shareholders Equity (KES

billion)

Return On Equity (1/4) %

Equity Bank Ltd. 18,233 238,194 7.7% 972,066 36.0%

Kenya Commercial Bank Ltd. 17,746 323,312 5.5% 789,114 28.4%

Standard Chartered Bank (K) Ltd. 13,316 220,524 6.0% 174,481 37.0%

Barclays Bank of Kenya Ltd. 11,921 207,010 5.8% 32,371 36.8%

Co-operative Bank of Kenya Ltd. 10,705 228,874 4.7% 35,652 30.0%


Banking Sector Market Share – December 2013 – Ksh. M

Market Size Index

Net Assets

% Of The Market

Total Deposits

% Of The Market

Total Capital

% Of The Market

Total Number Of Deposit Accounts (Millions)

% Of The Market

Total Number Of Loan Accounts (Millions)

% Of The Market

Weighting 0.33 0.33 0.33 0.005 0.005


Gross loans of subsidiaries were worth KES. 149.6 billion against Kes. 127.3 billion in 2012.

• Subsidiaries operating in Tanzania accounted for 44.3% of the total loans;

• Subsidiaries operating in Uganda accounted for 30.5% of the total loans;

• Subsidiaries operating in South Sudan accounted for 8.5% of the total loan

12.3. Bank Supervision DepartmentThe Bank Supervision Department (bsd) mandate is stipulated in section 4(2) of the Central Bank of Kenya Act, which is to foster liquidity, solvency and proper functioning of a stable market-based financial system. The following are the main functions of BSD:

• Development of legal and regulatory frameworks to foster stability, efficiency and access to financial services. The Department achieves this objective through: √ Continuous review of the Banking Act, Microfinance Act,

Building Societies Act, Regulations and Guidelines issued thereunder which lay the legal foundation for banking institutions, non-bank financial institutions, deposit taking microfinance institutions and building societies;

√ Continuous review of Regulations and Guidelines for Foreign Exchange Bureaus licensed under the Central Bank of Kenya Act;

√ Continuous review of Regulations for Credit Reference Bureaus licensed under the Banking Act.

• Processes licenses of Commercial Banks, Non-Bank Financial Institutions, Mortgage Finance Institutions, Building Societies, Foreign Exchange Bureaus, Microfinance Banks and Credit Reference Bureaus.

• Conducts onsite evaluation of the financial condition and compliance with statutory and prudential requirements of institutions licensed under the Banking Act, Microfinance Act and Foreign Exchange Bureaus licensed under the Central Bank of Kenya Act.

• carries out offsite surveillance of institutions licensed under the Banking Act, Microfinance Act and Foreign Exchange Bureaus licensed under the Central Bank of Kenya Act

through the receipt and analysis of returns received periodically. the department also processes corporate approvals for banking institutions in regard to opening and closing of places of business, appointment of directors and senior managers, appointment of external auditors, introduction of new products/services, increase charges.

12.4. Money Remittance Regulations 2013the salient features of the Money Remittance Regulations 2013 are:

• All persons wishing to transact in money remittance business shall be licensed by the Central Bank of Kenya;

• the minimum core capital shall on commencement of operations be Ksh.10 million and be increased to Ksh 20 million by 31st December 2014;

• Shareholders, directors and management will be vetted prior to appointment;

• Application and license fees will be Ksh. 20,000 and Ksh. 100,000 respectively;

• Money Remittance Providers will be required to obtain a security bond of not less than Ksh. 5 million. this amount will be held as security for performance of obligations to customers who deposit money for remittance purposes.

• Money remittance providers will be required to maintain a sound information system and adequate records including identification documents used to verify the identity of customers, transaction receipts and the source of funds among others;

• The Money Remittance Providers will be required to comply with the Proceeds of Crime and Anti-Money Laundering Act, 2009 and relevant Regulations;

• The Central Bank of Kenya will have powers to regulate and supervise all licensed money remittance providers to ensure compliance with the laws of Kenya.

12.5. International Finance Corporation (IFC) IFC is an affiliate of the World Bank and finances private sector investment projects in agriculture, manufacturing, infrastructure and tourism. IFC extends long-term loans and makes equity investment in projects entailing investment of more than USD 20 million. The term loans are generally made in foreign currencies. IFC also manages the Africa Enterprise Fund which can support projects with lower project costs from the SME sector.

Large Peer Group>5%

Kenya Commercial Bank Ltd

12.83% 323,312 12.0% 237,213 12.3% 62,391 14.4% 1.721 7.90% 0.208 6.7%

Equity Bank Ltd

9.79% 238,194 8.8% 158,527 8.2% 50,687 11.7% 7.392 33.92% 0.840 27.1%

Co-operative Bank of Kenya Ltd

8.61% 228,874 8.5% 174,776 9.0% 35,652 8.2% 2.313 10.61% 0.348 11.2%

Standard Chartered Bank (K) Ltd

8.09% 220,524 8.2% 154,720 8.0% 36,030 8.3% 0.196 0.90% 0.051 1.6%

Barclays Bank of Kenya Ltd

7.65% 207,010 7.7% 151,122 7.8% 32,371 7.5% 1.240 5.69% 0.285 9.2%



12.6. Development Bank of Kenya (DBK) The bank is owned jointly by the Kenya Government through industrial and commercial development corporation (icdc), the Netherlands Overseas Finance Company (FMO), Commonwealth Development Corporation (CDC), the German Development Bank (DEG) and the International Finance Corporation (IFC). The bank provides medium-term local and foreign currency financing for projects in the industrial, agro-processing, and tourism sectors.

12.7. East African Development Bank (EADB) EADB was established in 1967 with its headquarters in Kampala, Uganda. The bank’s shareholding is held primarily by the governments of Kenya, Uganda and Tanzania. The EADB provides medium and long-term loans designated in foreign currencies. EADB finances projects and offers a broader range of finance services in member states with a view to strengthening regional economic cooperation.

12.8. Eastern and Southern African Trade and Development Bank (PTA Bank) The PTA Bank was established in november 1985 to provide financial and technical assistance to projects and trade activities which have the potential of promoting economic growth and integration in the COMESA sub-region. The PTA Bank provides financial resources to both public and private sector projects in manufacturing, agro-industry, mining, infrastructure and tourism.

12.9. Insurance insurance industry contributes to national development through providing broader insurance products and services, fostering entrepreneurial attitudes, encouraging investment, innovation, market dynamism and competition, offering social protection alongside the state, releasing pressure on public sector finance; enhancing financial intermediation, creating liquidity and mobilizing savings. The insurance industry in Kenya has continued to register significant growth prospects. The growth has been both quantitative and qualitative with increases in the

number of industry players and range of services offered.

There has been rapid uptake in life, medical and new micro-in-surance which has seen lower-earning citizens gain coverage. However, the insurance sector in Kenya is still dominated by the short term motor segment. As of 2013 there were 47 operating insurance companies in Kenya including 24 non-life businesses, 11 life businesses and 12 mixed businesses firms. No single company dominates the sector; the larger ones include AIG, APA, Blue Shield, the Jubilee, Kenindia and UAP. The insurance industry is governed by the Insurance Act and regulated by the Insurance Regulatory Authority.

12.10. Capital Markets The Nairobi Stock Exchange (NSE) is Sub-Sahara Africa’s fourth largest by Market capitalization. It trades both equities and bonds with a growing participation of local investors. NSE has four market segments namely Main Investment Market Segment (MIMS), Alternative Investment Market Segment (AIMS), Fixed Income Securities Market Segment (FISMS) and Growth Enterprise Market Segment (GEMS).

In 2014, the Nairobi Stock Exchange (NSE) listed through an initial public offering on the Main Investment Market Segment (MIMS), completing the journey of demutualization by converting into a public, listed company, whose shares are traded on the Exchange and are available to all Kenyans. During the same period, the NSE also celebrated the launch of its new brand to reposition itself as a more inclusive brand with the aim of encouraging an investment culture amongst Kenyans that fully embraces the capital markets. Since 2006, NSE has operated an electronic trading system and since 2007, a wide area network has enabled brokers to place orders from their offices. Clearing is performed by the central depository and settlement corporation. Currently there are 64 listed companies of which two are listed under the Growth Enterprise Market Segment (GEMS) while the rest on Main Investment Market Segment (MIMS).


Quality of Life 13


Quality of Life 13


13. Quality of LifeNairobi is one of the busiest and fast growing cities in Africa, to many visitors, it is a city they are sad to leave and one to which they vow to come back to. The city is the home to more than 3 million people and a bubbling melting point for most of Kenya’s 40-plus ethnic groups. The name “Nairobi” comes from the Maasai phrase Enkare Nyrobi, which translates to “cold water”, the Maasai name of the Nairobi river, which in turn lent its name to the city. However, it is popularly known as the “Green City in the Sun” and is surrounded by several expanding villa suburbs.

nairobi have several tourist attractions. the most famous is the Nairobi National Park. The national park is unique in being the only game-reserve of this nature to border a capital city, or any major city. The park contains many animals including lions, giraffes, and black rhinos. The park is home to over 400 species of birds. The Nairobi Safari Walk is a major attraction to the Nairobi National Park as it offers a rare on-foot experience of the animals.

nairobi is home to several museums, sites, and monuments. The Nairobi National Museum is the country’s National Museum and largest in the city. It houses a large collection of artifacts portraying Kenya’s rich heritage through history, nature, culture, and contemporary art. it also includes the full remains of a homo erectus popularly known as the Turkana boy. Other prominent museums include the Nairobi Gallery, Nairobi Railway Museum, and the Karen Blixen Museum located in the affluent Karen suburb. Uhuru Gardens, a national monument and the largest memorial park in Kenya, is also the place where the first Kenyan flag was raised at independence. It is located along Langata road near the Wilson airport.

Nairobi is nicknamed the Safari Capital of the World, and has many spectacular hotels to cater for safari-bound tourists. Five star hotels in Nairobi include the Nairobi Serena, Laico Regency (formerly Grand Regency Hotel), Windsor (Karen), Holiday Inn, Nairobi Safari Club (Lilian Towers), The Stanley Hotel, Safari Park & Casino, In-terContinental, Panari Hotel, Hilton, and the Norfolk Hotel. Other newer ones include the Crowne Plaza Hotel Nairobi in Upper Hill area, the Sankara Nairobi in Westlands, Tribe Hotel-Village Market, house of Wayne, the eastland hotel, ole sereni, and the boma located along Mombasa Highway. Upcoming establishments include The Best Western Premier-Nairobi, Radisson Blu and Kempinski which are near completion. International chains apart from the Hilton, the Intercontinental group, and Serena Hotels are also setting up prime properties in Nairobi city.

Shopping malls in Nairobi include; The Yaya Centre (Hurlingham), Sarit Centre (Westlands), Westgate Shopping Mall (Westlands), ABC Place (Westlands), The Village Market (Gigiri), Junciton Shopping Centre (Ngong Road), Prestige Plaza (Ngong Road), Crossroads Shopping Centre (Karen), and T-Mall (Langata). Nakumatt, Uchumi, and Tuskys are the largest supermarket chains with modern stores throughout the city.

The Nairobi Java House is a popular coffee house and restaurant chain with multiple branches located around the city including one at the Jomo Kenyatta International Airport. Other coffee chains include Dormans Coffee House and Savannah which is part of Sasini Tea, a blue chip tea producer in Kenya owned by Naushad Merali - an admired investment guru. Kenyan tea and coffee are

very popular both locally and internationally and one can purchase premium gourmet blends at any of these outlets.Nairobi’s night life is very popular with tourists, both young and old. From a collection of gourmet restaurants offering local and international cuisine, Nairobi has something to offer to every age and pocket. Most common known food establishments include The Carnivore and The Tamarind Restaurants which have outlets in Langata, City Centre, and the Village Market. For those more discerning travellers, one can choose from a wide array of local cuisine, mediterranean, fast food, ethiopian, and arabian. the city’s nightlife is mostly centred along friends and colleagues meeting after work especially on Fridays - commonly known as “Furahiday” (Happy Day), theme nights, events and concerts, and of late a new trend - “herbal bubble” or “Shiisha”. The most popular clubbing spots are centred in upmarket Westlands which has come to be known as “Electric Avenue”, Karen, Langata, Hurlingham, and “uptown” venues in the city centre. Nairobians generally go out every day of the week and most establishments are open till late.

CurrencyKenya’s unit of currency is the shilling (KShs) (slang: Bob). There are no currency restrictions into or out of Kenya for currency transactions. forex bureau are available both at the airport and at the city center with various currencies being traded.

Money• ATMs are available country wide with 24-hour access. • all major international cards are accepted. • travellers’ cheques are accepted.

HealthSeveral vaccinations are highly recommended, they include, Yellow Fever, Typhoid, Hepatitis A and Diphtheria.

It is also recommended to be up to date with your polio and tetanus vaccinations.

TippingTipping is appreciated. Most hotels and restaurants include and 10% service charge.

Business Hours08.30 to 12.30 and 14.00 to 17.30 mon-Sat. Many businesses work Saturday mornings.

Electricity220-240 volts ac, with standard 13-amp three square-pin plugs.

WaterBottled water is readily available

Source: Kenya Airport Authorities Website and UN


Sectors 14


Sectors 14


14.1. Introduction Kenya is endowed with investment opportunities from Agriculture and agro-processing, Tourism, Manufacturing, ICT, energy, infra-structure and more recently mineral and hydrocarbons. to ensure this potential is harnessed and to promote economic growth and development, the governments of Kenya continue to promote friendly business environment by ensuring macroeconomic and political stability. The growth has been attributed to ; banking industry which has shown resilient and strong growth in the past years, a relatively well developed stock market which ranks 4th in SSA in market capitalization and mobile banking.

14.2. Financial Services The overall objective of financial sector as outline in the Vision 2030 is creation of “a vibrant and globally competitive financial sector that drives high levels of savings to finance Kenya’s investment needs” and makes Kenya the regional financial services hub. The financial sector has defied the broader economic difficulties of the recent past to post a continued higher rate of growth than the economy as a whole.

The banking sector recorded a 15.9 percent growth in total assets, 18.3 percent growth in loans advances and 16.6 per cent in profit before tax in 2013. Market capitalization as of early 2014 stood at usd 21.5 billion compared to usd 15.4 billion the previous period. With annualized returns standing at 36.0 per cent, the NSE is the second best performing market on the continent. In 2013, the assets of insurance sector amounted to Ksh 358.0 billion representing a growth of 18.4 per cent compared to the previous year. the assets of life insurance business increased by 24.1 per cent to Ksh 195.9 billion

Opportunities:Increase banking scale through consolidation and mergers of the small to enhance capital base- Out of the 44 commercial banks only 6 are classified as largest banks (controlling 52.4 percent) the rest are small and have limited rich which has reduced competition:

• With financial services increasingly becoming globalized, particularly cross-border financial services where one or more counterparties are not domestic, the Government plans to set up nairobi international finance centre (nifc) – a flagship project under vision 2030;

• Listing through Initial Public Offer to raise additional capital, share buying and investment in both treasury and corporate bonds;

• Development of new insurance products-though the uptake of insurance is on increase in Kenya, the penetration rate is still low hence room for development of new product to meet the needs of those who do not enjoy insurance services.

14.3. Tourism Tourism is one of Kenya’s most important sub-sectors under services. Notably the sector has strong linkages to transport, food production, retail trade, and entertainment industry. over the years, Kenya has remained one of the world’s most popular tourism destinations attracting millions of tourists due to her attractive tourist sites (beaches and wildlife), rich culture, striking

geographical diversity and landscapes which make it ideal for investment in hospitality. the most popular tourist attractions in Kenya are the wildlife and beaches. Others include museums, snake parks and historical sites. However, many of these resources remain largely unexploited.

currently Kenya receives over 1.5 million tourist annually and tourist earning of over KSH 95 billion making it one of largest foreign exchange earners for Kenya others being Tea and diaspora remittances. europe has remained the major tourist source for Kenya over the years accounting for more than 50.0 percent of total tourists in the last five years. The main markets for Kenyan tourism in descending order of visitor numbers are the united Kingdom, the US, Italy, Germany and France. Emerging markets are growing in importance as evidences by continue increase of tourist arrivals from india and china.

The government to increase tourism arrivals from 1.8 million in 2012 to 3 million visitors and tourism earnings from KSh. 96.0 billion in 2012 to KSh. 200 billion in next 5 years through diversi-fication of tourist sources and tourism product.

Opportunities: • Construction of International Hotel Chains- there is unmet

demand for and high occupancy rates in key tourist areas. With normal tourist arrivals, the demand for accommodation exceeds the available bed capacity thus creating a demand for additional bed capacity;

• Investment in Conference Facilities-Kenya has only one large international conference centre (KICC) and given the ever increasing demand for conference and exhibitions, Kenya will require investment in this niche product in within her 3 cities;

• Film Industry; The vast open spaces, under clear blue sky, starry nights and misty moonlights and inviting camp fires offer prime destination for Holly Wood and global film fans. Many world famous films such as Born Free, Walking With Lions, Lion King, among others have so far been shot in the Arid and Semi-Arid Land (ASAL) areas in Kenya;

• Water Sport; Waterways in Kenya have not been fully exploited and developed as a leisure product. investment is required in the Western Kenya Circuit where the massive Lake Victoria connects the EAC countries and in the coastal region in the Indian Ocean waters;

• Vision 2030 flagship projects: three resort cities, two new resort cities on the coast (north and south) and third one in isiolo.

14.4. Agriculture and Agro-processing Agriculture is the mainstay of the economy contributing an annual average of 25 percent GDP and providing livelihood to approximately 75 percent of the population. Agricultural products accounts for 65 percent of Kenya’s total exports and accounts for 18 percent of formal employment. Agriculture output grew by 2.9 percent in 2013 against a growth of 4.2 per cent in 2012 as a result of depressed rainfall reducing production of maize, beans, cut flowers and fruits. Kenya’s agricultural exports include traditional agricultural exports (tea and coffee) and non-traditional agricultural exports (horticulture). There is considerable scope for diversification and expansion of the agricultural sector through

14. Sectors


accelerated food crop production, value addition and increase in non-traditional exports.

The second Medium Term Plan (MTPII) of the Vision 20130 will give top priority to increased acreage under in irrigation in order to reduce the country’s dependence on rain fed agriculture. A total of 404,800 hectares will be put under irrigation during the plan period. Measures will be taken to mechanize agricultural production, revive cooperatives and farmers unions, and subsidize farm inputs to raise productivity.

Opportunities:• Establishment of Disease Free Zones (DFZ): Four DFZ will

be established to facilitate access of Kenyan meat, leather and leather products to local, regional and international markets. The fi rst zone will be established at the Coast, covering the counties of Kwale, Mombasa, Kilifi , Tana River, Lamu and parts of Taita-Taveta outside the Tsavo National Park. The other three zones will be established in the Laiki-pia-Isiolo complex and Uasin Gishu and Garissa Counties;

• large irrigation schemes – Irrigation: 404,800 hectares will be put under irrigation by 2017 especially in the Arid and Semi -Arid area in Turkana and Tana Delta;

• Value addition of fruits, cash crop and vegetables – Kenya’s competitive advantage as an investment location for the coffee and tea industry.

14.5. Manufacturing The Vision 2030 recognizes the manufacturing sector as one of the key players in Kenya economic development, not only in terms of its contribution to total output and export earnings, but also in employment creation. Initially the sector was developed under the import substitution policy; there is now a shift to export oriented manufacturing as the main thrust of Kenya’s industrial policy. The sector is mainly agro based and plays an important role in adding value to agricultural output and providing forward and backward linkages with agricultural sector. The sector currently accounts for 10 per cent of Gross domestic Product (GdP).

The sector grew by 4.8 per cent in 2013 (Economic Survey, 2014). The growth was associated with peaceful 2013 general election, stable exchange rate and lower interest rates. The volume of the output grew by 2.6 % in 2013. As at 2013, formal employment in the sector stood at 280,300 people which represents 12.4 % of the total formal employment with additional 2 million people employed in the informal side of the industry (economic survey, 2014)

To achieve the objectives of Vision 2030, a set of key target areas have been identified and specific goals and targets set to steer industrial growth. These include the development of Special Economic Zones (SEZs), Industrial Parks, Industrial Clusters, promotion of small and medium scale manufacturing firms, development of niche products and attraction of strategic investors in strategic sectors, i.e. iron and steel industries, manufacture of fertilizer, agro-processing, machine tools and machinery, motor vehicle assembly and manufacture of spare parts.

The Manufacturing sector is an area where a wide range of investment opportunities exist for direct and joint-venture

investments. The identified opportunities abound in agro-pro-cessing, 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.

14.6. Information Communication Technology (ICT)the ict sector is the success story of the decade in Kenya. New information technologies are playing an increasingly important role in nearly all areas of the national economy of a country. The installation of a broadband backbone connected to three undersea fibre-optic cables (Seacom, TEAM System and EASSY) has significantly improved Kenya’s connectivity and prospects for the ict sector, be it in business process outsourcing (BPO) or the development of IT-enabled services (ITeS). The Government of Kenya has identified Information and Communication Technology (ICT) as a key enabler to the attainment of the goals and aspirations of the Vision 2030. The thrust of the vision with regard to the ICT sector is to transform Kenya into a knowledgeable and information based economy by enabling access to quality, affordable and reliable ICT services in the country.

in 2013, the ict sector remained vibrant especially in the mobile and internet subsectors. the number of mobile connections rose from 30.4 million in 2012 to 31.2 million in 2013 while that of internet subscriptions rose from 8.5 million in 2012 to 13.3 million in 2013. The amount of money transacted through the mobile money transfer service grew remarkably from KSh 672 billion as at June 2012 to KSh 914 billion as at June 2013. Domestic calls traffic, which entails total call minutes made locally, rose from 27.6 billion in 2012 to 30.0 billion in 2013. total broadband subscriptions have grown immensely over the last four years owing to the increase in the active mobile broadband, which accounted for 94.0 per cent of the total subscriptions in 2013. total broadband penetration increased from 2.5 per cent in 2012 to 3.4 per cent in 2013 which are below the African average of 7.4 per cent.

Kenya has enormous potential investment opportunities in the BPO sector:

• Front office including call centers and contact centers; • Back office including data hosting & archiving, data

processing, software development, maintenance & customization and e-commerce;

• KONZA Techno Park, a Vision 2030 flagship project.

14.7. Energy Energy has been identified as one of the infrastructural “enablers” of the three pillars of Vision 2030. the country is expected to use more energy in the commercial sector as the country moves towards becoming a middle income country by the year 2030. As income increases and urbanization intensifies, household demand for energy will also rise. To meet this demand, several programmes have been put in place by the government.

Kenya’s main sources of energy are wood fuel, hydropower, other biomass and fossil fuel. Commercial energy in Kenya is dominated by petroleum and electricity as prime movers of the modern sector of the economy, while wood fuel provides energy needs of the traditional sector including rural communities and


urban poor. it is estimated that biomass account for about 70 percent of total primary energy consumption in Kenya. Electricity remains the most sought after energy source by Kenya society. The current sources of electrical power generation are hydro accounting for more than 50 percent, thermal oil, geothermal and wind. The government plans to add 5,000MW of energy in the next five years. As part of this the government has just added 140 MW of electricity generated from geothermal.

Kenya had no known commercial reserves of petroleum until March 2012 when oil was discovered in Northern Kenya, leading to a lot of interest in the sector. A discovery of natural gas was made in Block L8, Lamu, though it was not found to be commercially viable.

Opportunities:• Generation of electricity using renewable energy such as

geothermal, hydro, solar, wind, biomass, biofuels, biogas and municipal waste;

• Energy generation using coal- huge deposits of coal has been discovered in Mui Basin of Kitui;

• Petroleum exploration both on-shore and off-shore;• Building of hydrocarbon processing and distribution

structures such the oil pipeline along LAPSSET.

14.8. Infrastructure Kenya is banking on infrastructure including roads, rail network, sea ports airports and pipeline to spur private investment. under Vision 2030 second medium term Plan (mtP ii), the government seeks to deploy a world class infrastructure facilities and services to reduce the cost of doing business, improve productivity and enhance overall competitiveness of the country. Closing the country’s “infrastructure deficit” is an important part of the Jubilee’s government plan to attract quality foreign direct investment and expand opportunities for domestic enterprises and Kenyans.

While significant gains have been realized in development of infrastructure over the last 5 years, Kenya global competitive-ness is still weak. To address such challenges, the government is pursuing a number of broad goals including accelerating ongoing infrastructure development among others.

Opportunities:• Expansion of the port of Mombasa;• Construction of the new Lamu Port in Manda Bay;• expansion of the major airports (nairobi Green terminal,

Mombasa, Malindi, Kisumu);• Building new Airports (Isiolo, Turkana);• Development of light rail Nairobi and its suburbs;• Development of LAPSSET;• Road construction- Government plans to tarmac 10,000

kilometers of Roads across the country in 5 years’ through Annuity Financing Framework;

• Upgrade of urban water systems in various towns.

14.9. Wholesale and retail tradethe trade sector has been identified as one of the key engines of the economy due to its immense contribution to Kenya’s GDP and employment creation through trade and investments. The sector’s contribution to GDP averaged 10.1 per cent and

employed on average 190,000 jobs over the four years. The industry continued to experience considerable growth attributed to increased purchasing power among Kenya’s middle class and upper class populations. Other key factors include improved in-frastructure, which has facilitated the movement of goods and meant higher quality at lower prices. In addition, the sustained property boom had allowed retailers to establish outlets prime locations near residential neighbourhoods, offering more convenience to consumers. Further, the government has also undertaken licensing reforms by reviewing the regulatory regimes that resulted in the elimination, simplification, consolidation and harmonization of business licenses.

Aggressive competition has promoted great innovation among Kenyan supermarkets. In a bid to promote consumer loyalty and increase revenues, Kenya’s nascent supermarket chains are packaging and branding their own private label products. A recent increase in the adoption of online retailing platforms and the enduring popularity of home shopping represent innovative ways in which retailers are maintaining and increasing their value shares. the retail sector is mostly dominated by Kenya companies including Nakumatt, Uchumi, and Naivas among others

Opportunities for investment include; • Development of Vision 2030 flagship projects such as

Building wholesale hub markets and Building Tier-1 retail markets

• Opening of retail shops in Kenya such as supermarkets, hypermarkets and luxury retail (clothing, cosmetics)

• Establish a world class trade centre and a modern exhibition and convention centre

• Internet Retailing• Establishment of trade logistics such as warehouse

14.10. Transport and logistics over the Kenya has seen significant growth in trade volumes. The growing cargo volumes coming into or leaving Kenya through the airports and sea ports is providing a huge opportunity for players in the freight, storage, distribution and clearing and forwarding market. The value of total merchandise exports grew by 48 per cent between 2008 and 2012 while imports increased from KSh. 770.7 billion in 2008 to KSh. 1.37 trillion in 2012 representing 78.3 per cent increment. Most of the imports are capital goods or raw materials for industrial production while exports consist of agricultural products. In addition, the government continues to invest heavily on transport infrastructure to improve the efficiency of moving goods across the country and into the region

This has attracted multi-billion Shilling investments in Kenya’s transport and logistics industry in the past years, opening a turf war between local and international firms seeking a share of the growing business. With continued development of roads, railway, water and air transport networks and growth in trade, it is expected that more players would be attracted into logistics industry. Currently, Kenya Airways, SAUDI Airlines Cargo Company, Aramex, Transglobal Cargo Centre, Swissport Cargo Services and DHL are among the big players in the logistics business. Opportunities exist in:

• Set up cargo handling facilities• Airline freight routes targeted at the Kenyan market• Cargo storage warehouses


• Road cargo transport to serve the LAPSSET corridor • Railway cargo transport especially with the completion of

the standard gauge railway• Acquisition of local courier firms

14.11. Mining and minerals Though Kenya is not generally known as a mining investment destination, recent developments have proven that the country actually holds a significant potential for mineral development, and is largely unexplored. Kenya mining industry is dominated by production of non-metallic minerals such as soda ash, fluorspar, cement, coloured gemstones and gold among other minerals, the two later mainly from artisan mining activity.

Major mineral sand deposits like titanium ores – titanium, ilementine and zircon – have been discovered along the coast. Significant concentrations of Coal deposits exist in the Mui Basin. Recent discoveries of oil in the Tertiary Rift Basin and gas in one of the offshore wells of Lamu Basin indicate the existence of viable quantities of oil and gas and the potential of the country becoming an oil and gas producing nation. To this end extortion and exportation of titanium started with first shipment being done in 2014.

The sector currently accounts for a very small part of Kenya’s annual GdP at 1 per cent and 3 percent of export revenues. in 2013, mineral output expanded by 4.7 per cent from 1,454.8 thousand metric tonnes in 2012 to 1,522.7 thousand metric tonnes in 2013. soda ash production rose by 4.2 per cent to 468,215 tonnes in 2013 spurred by increased external demand. The Kenya Government is currently putting in place a Mining Policy and revising its outdated Mining Act in order to encourage development of the mineral industry in the country.

Opportunities include:• Petroleum exploration both on-shore and off-shore• mineral exploration and extraction • Investment in mining logistics and related infrastructure

14.12. Health Sector The Constitution through the Bill of Rights puts a heavy respon-sibility on the health sector to ensure realization of right to health. The goal for the health sector is to provide equitable, affordable and quality health care to all citizens. as part of efforts to develop the sector, the government has developed the Health Sector PPPs Strategy. The Strategy provides a number of investment opportunities in health service provision involving a private sector partner having management control of public hospital in order to get return on investment at rate that does not hamper access.

The Vision 2030 recognizes role of private sector in improving the delivery of health care in partnership with the public sector. With support of private sector, Kenya intends to become the regional provider of choice for highly-specialized health care, thus opening Kenya to ‘health tourism’. Kenya growing middle class population which is increasingly able to pay for better health services and pharmaceutical products has contributed significantly in development of the sector. The health sector has experienced remarkable development in recent years with the country spending about 7% of the GDP on health. In

addition Kenya earns an estimated 30 million u.s. dollars from 3,000 foreigners who visit the country annually to seek medical services. Likewise, an estimated 10,000 Kenyans spend 100 million dollars on specialized treatment overseas annually.

oPPortunities for inVestment in the health sector in KenyaThe government of Kenya is has developed the Health Sector PPPs Strategy. The Strategy provides a number of investment opportunities in health service provision involving a private sector partner having management control of public hospital in order to get return on investment at rate that does not hamper access.

Other PPPs -related investment opportunities are telemedicine; referral or sharing of medical resources; local manufacture of generic drugs, adjusting products to meet unmet demand; creating new model for mobile; remote and home based health care; and creating new opportunities around rapid penetration of mobile phone technology.

Kenya earns an estimated 30 million u.s. dollars from 3,000 foreigners who visit the country annually to seek medical services. Likewise, an estimated 10,000 Kenyans spend 100 million dollars on specialized treatment overseas annually.

• Make Kenya a regional health services hub The Vision 2030 recognizes role of private sector in improving the delivery of health care in partnership with the public sector. With support of private sector, Kenya intends to become the regional provider of choice for highly-spe-cialized health care, thus opening Kenya to ‘health tourism’. The term health tourism includes spa and gym, naturopathy, yoga, meditation and many other mental and physical exercises and treatments that are beneficial for health and rejuvenation. Kenya has plenty of geothermal mineral water springs (in Rift Valley province and parts of Western province) whose mineral contents have the potential for the development of health spas to serve as curative centers as well as tourist attractions. The most significant hot water springs are found in the following places: around lakes Bogoria and Baringo. The two lakes are 345 Km from Nairobi and are within National Game Parks; around Lake Turkana which sits at the borders of Kenya, Ethiopia and Sudan; Olkaria and Eburu near Lake Nakuru which is famous for flamingos; and Simbi on the shores of Lake Victoria. The area is close to Maasai Mara Game Reserve renowned for its wildlife. Beside health tourism, there is medical tourism. Medical tourists are broadly defined as people who seek quality treatment abroad, or in a neighboring state where the cost is significantly lower, leaving them with enough money to tour the host country as part of their recuperation. Kenya is steadily catching up with development of new medical facilities; a local private hospital is already pioneering medical tourism in Kenya and has upgraded infrastructure and equipment, and is now able to perform, at a fraction of the cost, many procedures that previously could only be done in south africa, the West or india.

• Pharmaceutical and medical equipment manufacturingThe Kenyan pharmaceutical market is booming as a result of a growing population that is increasingly able to pay for


• Road cargo transport to serve the LAPSSET corridor • Railway cargo transport especially with the completion of

the standard gauge railway• Acquisition of local courier firms

14.11. Mining and minerals Though Kenya is not generally known as a mining investment destination, recent developments have proven that the country actually holds a significant potential for mineral development, and is largely unexplored. Kenya mining industry is dominated by production of non-metallic minerals such as soda ash, fluorspar, cement, coloured gemstones and gold among other minerals, the two later mainly from artisan mining activity.

Major mineral sand deposits like titanium ores – titanium, ilementine and zircon – have been discovered along the coast. Significant concentrations of Coal deposits exist in the Mui Basin. Recent discoveries of oil in the Tertiary Rift Basin and gas in one of the offshore wells of Lamu Basin indicate the existence of viable quantities of oil and gas and the potential of the country becoming an oil and gas producing nation. To this end extortion and exportation of titanium started with first shipment being done in 2014.

The sector currently accounts for a very small part of Kenya’s annual GdP at 1 per cent and 3 percent of export revenues. in 2013, mineral output expanded by 4.7 per cent from 1,454.8 thousand metric tonnes in 2012 to 1,522.7 thousand metric tonnes in 2013. soda ash production rose by 4.2 per cent to 468,215 tonnes in 2013 spurred by increased external demand. The Kenya Government is currently putting in place a Mining Policy and revising its outdated Mining Act in order to encourage development of the mineral industry in the country.

Opportunities include:• Petroleum exploration both on-shore and off-shore• mineral exploration and extraction • Investment in mining logistics and related infrastructure

14.12. Health Sector The Constitution through the Bill of Rights puts a heavy respon-sibility on the health sector to ensure realization of right to health. The goal for the health sector is to provide equitable, affordable and quality health care to all citizens. as part of efforts to develop the sector, the government has developed the Health Sector PPPs Strategy. The Strategy provides a number of investment opportunities in health service provision involving a private sector partner having management control of public hospital in order to get return on investment at rate that does not hamper access.

The Vision 2030 recognizes role of private sector in improving the delivery of health care in partnership with the public sector. With support of private sector, Kenya intends to become the regional provider of choice for highly-specialized health care, thus opening Kenya to ‘health tourism’. Kenya growing middle class population which is increasingly able to pay for better health services and pharmaceutical products has contributed significantly in development of the sector. The health sector has experienced remarkable development in recent years with the country spending about 7% of the GDP on health. In

addition Kenya earns an estimated 30 million u.s. dollars from 3,000 foreigners who visit the country annually to seek medical services. Likewise, an estimated 10,000 Kenyans spend 100 million dollars on specialized treatment overseas annually.

oPPortunities for inVestment in the health sector in KenyaThe government of Kenya is has developed the Health Sector PPPs Strategy. The Strategy provides a number of investment opportunities in health service provision involving a private sector partner having management control of public hospital in order to get return on investment at rate that does not hamper access.

Other PPPs -related investment opportunities are telemedicine; referral or sharing of medical resources; local manufacture of generic drugs, adjusting products to meet unmet demand; creating new model for mobile; remote and home based health care; and creating new opportunities around rapid penetration of mobile phone technology.

Kenya earns an estimated 30 million u.s. dollars from 3,000 foreigners who visit the country annually to seek medical services. Likewise, an estimated 10,000 Kenyans spend 100 million dollars on specialized treatment overseas annually.

• Make Kenya a regional health services hub The Vision 2030 recognizes role of private sector in improving the delivery of health care in partnership with the public sector. With support of private sector, Kenya intends to become the regional provider of choice for highly-spe-cialized health care, thus opening Kenya to ‘health tourism’. The term health tourism includes spa and gym, naturopathy, yoga, meditation and many other mental and physical exercises and treatments that are beneficial for health and rejuvenation. Kenya has plenty of geothermal mineral water springs (in Rift Valley province and parts of Western province) whose mineral contents have the potential for the development of health spas to serve as curative centers as well as tourist attractions. The most significant hot water springs are found in the following places: around lakes Bogoria and Baringo. The two lakes are 345 Km from Nairobi and are within National Game Parks; around Lake Turkana which sits at the borders of Kenya, Ethiopia and Sudan; Olkaria and Eburu near Lake Nakuru which is famous for flamingos; and Simbi on the shores of Lake Victoria. The area is close to Maasai Mara Game Reserve renowned for its wildlife. Beside health tourism, there is medical tourism. Medical tourists are broadly defined as people who seek quality treatment abroad, or in a neighboring state where the cost is significantly lower, leaving them with enough money to tour the host country as part of their recuperation. Kenya is steadily catching up with development of new medical facilities; a local private hospital is already pioneering medical tourism in Kenya and has upgraded infrastructure and equipment, and is now able to perform, at a fraction of the cost, many procedures that previously could only be done in south africa, the West or india.

• Pharmaceutical and medical equipment manufacturingThe Kenyan pharmaceutical market is booming as a result of a growing population that is increasingly able to pay for


better health services and pharmaceutical products. the health sector has experienced remarkable development in recent years with the country spending about 7% of the GDP on health. The rapid growth of the pharmaceutical market in the region has presented the need to increase quantity of production, and also increase the export ratio for quality products. more prospective opportunities lie in the expansion of product portfolio, search for new markets, and support for medical research. The rapid growth of the pharmaceutical market in the region has presented the need to increase quantity of production, and also increase the export ratio for quality products. Kenya is currently the largest producer of pharmaceutical products in the Common Market for Eastern and Southern Africa region, supplying about 50% of the region’s market. Out of the region’s estimated 50 recognized pharmaceutical manufacturers, 30 are based in Kenya. The industry has a strong multinational heritage, with many foreign firms maintaining significant operations.

• health services provisionThe private sector’s complements the government in improving access to health care. There are 6,190 health facilities in Kenya, 48% of these facilities are manned by government while 34% by private enterprises. In essence, the country has the largest private health care segment in the region and holds significant potential for financial returns. opportunities can be found in inpatient and outpatient care, preventative care and diagnostic services. High end clinics that target growing middle and upper-income groups are especially profitable and provide high quality care that attracts patients as well as experienced staff. High volume, low cost hospitals usually located in high density areas targeting low income earners also offer high returns.Private hospitals can achieve local accreditation as training institutions for nurses, midwives and laboratory technicians; and large multidiscipline universities.

• Market incentives for investment in health careThe country recognizes that collaboration and partnership between the public and private sector in health is an important guiding principle in the delivery of health services. Market incentives for private sector investment in health care in Kenya include: range of tax incentives, stable pro-investment government; business friendly reforms; large pool of skilled enterprising workers; strategic location as a financial, communication and transport hub; improved physical infrastructure; well established legal and regulatory framework; low cost of internet connectivity an undersea and terrestrial fiber optic cable infrastructure connecting Kenya to the world wide network, no foreign exchange controls; and capital repatriation, remittance of dividends, and interests are guaranteed to foreign investors.

14.13. Education SectorKenya views Education and Training (E&T) as the primary means of upward social mobility, national cohesion and socioeconomic development. Kenya Vision 2030 places great emphasis on the link between E&T and the labour market, the need to create en-trepreneurial skills and competencies, mainstreaming natural

values in E&T and strong public and private partnerships. As part of development of education sector in Kenya, free primary education was introduce in the year 2003. This has seen the number of pupils increase from 8.56 million in 2008 to 9.97 million in 2012. the number of secondary schools increased from 6,566 in 2008 to 8,197 in 2012. Enrolment grew from 1.3 million in 2008 to 1.9 million below the target of 2.2 million in 2012.

Kenya’s university education system continues to evolve through on-going reforms and other emerging issues in the provision of education. Challenges and opportunities created by the interna-tionalization and cross-border university education are already impacting on the education sector. Accredited universities in Kenya include 22 public universities, 9 public constituent colleges, 17 private chartered universities, 5 private university constituent colleges and 13 institutions with letter of interim authority.

the national blueprint, Vision 2030 and the national constitution places emphasis on management of knowledge, raised productivity and efficiency, with the aim of transforming Kenya to knowledge based economy. Free primary education was introduce in the year 2003 to increase literacy levels. in 2014 2014 the government initiated the laptop project to class one pupils. Some of the key opportunities in the education sector in Kenya are highlighted below:

• Establishing of the Open Distance Education in existing universities

• Expanding facilities and training equipment in newly created University colleges

• Training of faculty staff at Masters and PhD levels especially in Science Technology and Innovation

• expansion of tVet at national, county and constituency level particularly; technical training institutes, institutes of technology, Vocational Training Centres, national polytechnics and technical universities.

• Provision of ICT equipment, software’s and expertise relevant for integration to ICT

• Establishes of specialized Technical Training College in areas of National priority ie petroleum, mining

• Establish centre’s of Excellence in Biotechnology Research • Developing core technologies and innovation to drive

economy growth• establishment of national Physical science research

Laboratory for Engineering and New Production technologies

• Rolling out of the Space Science and Technology Kenspace programme

• establishment of a centre for nuclear research for Peaceful applications

baringo investments catalogue 2015

Investor Relations