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Japanese investors decry Kenya's unclear trade laws

In Summary

• Japan’s exports to Kenya stood at $898 million last year a 17.8 per cent increase from 2017, according to Jetro’s statistics.

President Uhuru Kenyatta with Japan Premier Shinzo Abe after the closing ceremony of TICAD 6 in Nairobi on August 28.
President Uhuru Kenyatta with Japan Premier Shinzo Abe after the closing ceremony of TICAD 6 in Nairobi on August 28.

Lack of clear communication on policy, regulation and legislation changes are frustrating Japanese investors in Nairobi, Japan External Trade Organisation has said.

Speaking to foreign journalists at the headquarters in Tokyo on Tuesday, deputy director, Middle East and Africa division Sawaka Takazaki said companies fear the risk involved with the poor communication or implementation of new laws, thus affecting Japan’s trade policy.

Elections are also a major challenge, especially when they become violent and create instability, thus affecting these companies’ profits,” Sawaka said.

 

Jetro’s senior director for global strategy for Africa Makoto Matsumura, however, noted that Ken Invest has helped Japanese companies to interpret some of the policy changes in the country,unlike the Kenya chamber of commerce.

Among the other challenges flagged as investment risks in Kenya and Africa include financing or foreign exchange, social and political instability, hiring and human resource, poor infrastructure and trade regulation.

Professor Kenichi Ono of the National Graduate Institute for Policy Studies separately said power outages, which are common in Kenya, in sub-Saharan Africa have pushed some companies to countries such as Morocco.

This is a risk companies don’t want to take, especially in production and manufacturing,” he said.

Japan’s exports to Kenya stood at $898 million last year a 17.8 per cent increase from 2017, according to Jetro’s statistics.

The trade deficit, however, remains wide. For instance in 2016, when Kenya hosted the first Tokyo International Conference on International Development in Africa, exports to Japan were Sh6.34 billion (cut flower, tea, coffee, fish fillet, nuts, ) compared to Sh80.7 billion imports ( car, truck, steel, machinery).

Kenya, alongside South Africa and Egypt, are Japan’s main importers (second hand vehicles, ships, machinery, iron and steel, electrical machinery and sea food).