The Kenya Investment Authority has backed increased infrastructural development and readily available skilled labour to help grow foreign direct investments to the targeted 10 per cent of the national wealth in the medium term.
KenInvest said there has been immense investor appetite in key sectors, including oil and gas, manufacturing, agro-processing, infrastructure development, financial services and ICT.
“Judging from what we are seeing in inquiries even if elections are near, we are still seeing a lot of investors coming in and scouting for opportunities,” KenInvest managing director Moses Ikiara said. “It is up to us now to be very ready, very quick on our feet to serve investors quickly so that they can take up the opportunities.”
In 2015, Kenya attracted $1.4 billion (Sh144.80 billion) in foreign investment flows. Ikiara estimated the figure may have doubled to $2.4 billion (Sh248.43 billion) in 2016.
“A lot of investors have been waiting for the Special Economic Zones to kick off so now we should expect FDI growth rates of more than 100 per cent by far over the next one or two years,” Ikiara said when he met a delegation of Japanese investors on Tuesday ahead of the tour of Dongo Kundu project in Mombasa.
He said that despite the country's improving ease of doing business,work still needed to be done on the speed of decision making among policy-makers, and land acquisition processes to increase FDI inflows.
Transport CS James Macharia urged the Japanese investors visiting the country for a tour of the Dongo Kundu's proposed Special Economic Zone to tap into the country’s investment opportunities.
Macharia said construction of the first phase of the Dongo Kundu by-pass is 60 per cent complete and that the government is currently in talks with the Japanese International Cooperation Agency to receive $220 million (Sh2.28 billion) for the second phase.
Foreign investors looking to set up shop in the special economic zones will have to inject a minimum of Sh200 million so as to enjoy tax incentives provided by the government.
These include 10 year corporate income tax holiday and a 25 per cent tax rate for a further 10 years instead of 30 per cent, a 10-year withholding tax holiday on dividends and other remittances, exemption from VAT and customs import duty on inputs, among others.
The minimum required in foreign direct investment is $100,000 (Sh1.03 million) is set to be increased under the proposed National Investment Policy. Investors presently under this bracket do not receive any form of tax incentives.
“We are still in the process of developing the National Investment Policy. There are many people who think $100,000 (Sh1.03 million) is too little for the size of our economy so we might increase it,” Ikiara said.