The government through the ministry of trade, industry and cooperatives has set up the National Investment Council to overlook investment policies, offer incentives and attract investors.
The council will be chaired by the President and encompass all cabinet secretaries related to investment including Treasury CS, land, CS for interior security and immigration and foreign affairs.
It will also include attorney general, chairman of the council of governors and two investors from the industry.
The country lacks a clear framework under which to evaluate bottlenecks and special investor requests for incentives.
Among the constraints is the burden for potential investors in accessing land or spaces in industrial parks and zones for production hampered by heavy bureaucracy, uncertainty and community resistance.
Investment Promotion Act 2004, has also stipulated that investors or shareholders should deposit a paid-in minimum capital in a commercial bank before starting business operations.
Currently, investors who wish to receive an investment certificate from KenInvest must commit to an investment of at least US$ 100,000 (Sh10.32 million) for foreign investors and Sh1 million for local investors.
This minimum capital requirement is imposed regardless of the sector the investor is seeking to enter.
As a result, potential investors with significant investment prospects have opted for other investment destinations due to the lengthy delays involved in seeking the necessary incentives, Trade CS Peter Munya said.
“We have only had pro-announcements here and there but no coherent policy,” Munya said during the launch of new policies; Kenya Investment Policy and County Investment Handbook to cover county level.
But while the government operates on strategies and policy documents such as National Development Plans, Sessional Papers, Master Plans and the new Constitution, the initiatives have had a skimpy impact.
They have also led to the adoption of fiscal and non-fiscal incentives, unfavourable investment-related regulations and creation of agencies with some overlapping roles.
According to KenInvest managing director Moses Ikiara, the council is expected to act as a new one-stop centre by ensuring quick considerations of investor proposals and harmonization of the legislation.
Through this, the government hopes to increase the level of both public and private investment to at least 32 per cent of the country's GDP while increasing the level of private investment to 24 per cent of GDP.
Current domestic and foreign investment is at 24.5 per cent, as Ikiara said the policies will ensure the protection of local investors.
"The government has drawn up a negative list of carefully defined activities where foreign investment is restricted to allow protection of national investors in sensitive areas," Ikiara said.
"The restricts involvement in petty trade by foreigners and investors among them transportation and SMEs."
The list would be reviewed periodically so that growing businesses in restricted sectors would not be prevented from forming beneficial joint ventures with foreign partners.
According to the World Investment Report, FDI flows in Kenya increased by 27 per cent to $1.6 billion from $1.27 billion in 2017.
The investments have rolled to manufacturing, chemicals, hospitality and oil and gas.
In the World Bank Ease Of Doing Business 2020, the country moved up five places to position 56 from 61 in 190 countries highly attributed to the automation of systems that have made starting a business easy.
Kenya hopes to become a top 50 by 2020.
