COST OF INVESTMENT

Kenya not ready to offer ‘green card’

Let's not auction our nation to foreigners with some money to spend.

In Summary
  • KenInvest has proposed that high net worth investors whose enterprises are appraised to have high impact on new jobs and export earnings be allowed to automatically apply and acquire Kenyan citizenship.
  • Kenyans have learnt hard lessons on corruption. Claims that a framework to be developed to vet such foreigners would be watertight and free from abuse, simply flies in the face of reality.
An Investors looks at the Daily tradings at the Nairobi security exchange in Nairobi on June 30,2017.
An Investors looks at the Daily tradings at the Nairobi security exchange in Nairobi on June 30,2017.
Image: ENOS TECHE

The proposal to have Kenya offer citizenship to wealthy investors ostensibly to enhance direct foreign investment (FDI) is, to say the least, absurd and amounts to auctioning the country to foreigners.

I acknowledge the need to encourage stable FDI inflows. But I am baffled by the Kenya Investment Authority (KenInvest) proposal that high net worth investors whose enterprises are appraised to have high impact on new jobs and export earnings be allowed to automatically apply and acquire Kenyan citizenship.

Even more baffling is the assertion by KenInvest that the move will gift such investors with permanent residence; an equivalent to the Green Card in the United States. What KenInvest is in essence doing is arbitrarily circumventing Immigration laws that require a foreigner to continuously live in the country for at least seven years to qualify for citizenship by registration.

Citizenship, in any country, is a grave matter and should not just be offered to a foreigner because he or she has a lot of money to spend. The proposal raises some fundamental questions. For one, is this part of the agency’s mandate?

Immigrant Investor Programmes have been in existence in developed nations for decades. Over time, they have been amended primarily to safeguard the economic security of the respective countries based on the learning from the same.

The US recently amended its EB-5 immigrant visa programme that has been existence for three decades. In exchange for a multi-year, risk-prone path to becoming lawful permanent residents, foreign nationals invest at least $900,000 (Sh90.7 million) to capitalise US businesses located within targeted employment areas with high unemployment, otherwise known as “TEAs” or rural areas. Outside of the TEAs, the foreign national must invest at least $1.8 million (Sh181 million).

The government has invested a lot of money in infrastructure that will create many opportunities. KenInvest should instead be explaining these opportunities and reaching out to Kenyans to invest in such areas instead of opening doors for foreigners to grab them.

KenInvest, established through an Act of Parliament in 2004, has a specific mandate to promote investments by facilitating implementation of new investment projects, providing after care services for new and existing investments, as well as organising investment promotion activities locally and internationally.

The proposal is part of targeted incentives contained in its recently unveiled Kenya Investment Policy. It, however, calls for industry players to thoroughly interrogate the pros and cons of the whole document. Possibly the intervention of Parliament should equally be sought as the proposal touches on an existing Act of Parliament.

Parliament is currently working on a law that caps foreigners participating in government tenders of up to Sh1 billion. In this law, no foreigner will be able to participate in any government tender that is below Sh1 billion. This is the way to go and KenInvest should be following the same path.

For one, the proposal is an affront to the entrepreneurship spirit. Prospective local investors will not be able to fairly compete when a potential floodgate is opened to foreign counterparts. With that regard, the investment amount must take into consideration the potential and capability of Domestic Direct Investments (DDI) so that they are not in competition with FDIs.

The government has invested a lot of money in infrastructure that will create many opportunities. KenInvest should instead be explaining these opportunities and reaching out to Kenyans to invest in such areas instead of opening doors for foreigners to grab them.

There abound dangerous characters the world over with a lot of dirty money who hide under the guise of investors, who would try to seek a safe haven here. Are we going to have them among us as citizens regardless of the dangers they are likely to pose to the country and the citizenry?

The government, though the Ministry of Interior and Immigration Department, should thus be wary of this proposal. The country cannot peddle citizenship to foreigners on the simple basis that they have a lot of money to invest. There are mechanisms in place within the Immigration Department that have been in operation for years. These should be left uninterrupted.

There abound dangerous characters the world over with a lot of dirty money who hide under the guise of investors, who would try to seek a safe haven here. Are we going to have them among us as citizens regardless of the dangers they are likely to pose to the country and the citizenry?

It is true the country needs investors. There are companies with clean records and their expansion into Kenya would be of great benefit and create jobs. Such companies and their operators are issued with the relevant documents. The Ministry of Interior has laid down procedures.

The procedures and requirements to invest in Kenya in the County Investment Handbook 2019 published by KeInvest are too simplified. Key Performance Indicators (KPIs) that quantify what success will look like based on the core objectives of attaining economic growth from the implementation of the Big Four agenda are glaringly missing. What are our expectations on the impact on key areas such as unemployment, level of re-investment of proceeds into the country/counties, and local partnerships?

Every country has its growth pattern and Kenya is no exception. The KenInvest proposal will break the growth pattern Kenyans should be enjoying, by giving these opportunities to foreigners to whom $100,000 (Sh10 million) is pocket change.

We must uphold our pride as Kenyans as much as we have limitations, lest we auction our country and have it taken over by foreigners, simply because they have more money than us. We need to continue to support the efforts being made by the banking sector and government to increase liquidity in the local marketplace in order to enable Small Medium Enterprises (SMEs) to access competitively priced capital that will be instrumental in taking up local investment opportunities.

Kenyans have learnt hard lessons on corruption. Claims that a framework to be developed to vet such foreigners would be watertight and free from abuse, simply flies in the face of reality.

We have come a long way post-Independence and have a duty to future generations to safeguard the interests of our nation. Let us embrace all strategies that are aimed at inculcating in the mind of all Kenyan citizens patriotism and preference for local investments, goods and services FIRST as a means of supporting our domestic economy.

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