• An unfortunate deterrent for Norwegian companies considering Kenya as an investment destination is, however, the continued presence of corruption.
• Our business actors are well aware of Kenya ranking 137 of 180 countries on Transparency International’s Corruption Perception Index. The Norwegian government therefore fully support the ongoing Kenyan measures in combating this endemic evil.
One of the largest Norwegian business delegations to ever visit an African country has just returned home after three full days in Kenya.
The large and broad specter of companies represented in the delegation reflects the increasing interest among Norwegian businesses for the Kenyan market. Many Norwegian actors with experience from Kenya are now seeking to strengthen their existing portfolios, while even more companies new to Africa are attracted by the diversity, openness and vibrancy found in East Africa’s largest economy.
Kenya is an especially interesting market for Norwegian companies within renewable energy, ICT, Smart Cities, agricultural technology, flower production and tourism. Business cooperation is indeed an increasingly important part of the bilateral relationship between Norway and Kenya. The Government Pension Fund Global – the world’s largest sovereign wealth fund - and Norfund – the Norwegian Development Finance Institution - have already placed their bets on Kenya. Sustainable Kenyan and foreign investments are a prerequisite for development, job creation and tax revenues. Private sector growth is key in ensuring that Kenya’s young population can graduate from poverty. More and more Norwegian companies are now ready to contribute to growth through increased trade and investments.
Around 25 Norwegian companies are set-up in Kenya. Norwegian investors in renewable energy and solar energy production, where companies such as Scatec Solar, Gjertsen and Bright Products already have a presence in Kenya. There is also significant economic cooperation within agriculture and agricultural technology. Companies such as Yara, Mester Grønn and Bama are important stakeholders within this sector.
As much as 60 per cent of Norway's exports to Kenya are chemical fertilisers. Yara is here the major player, celebrating 25 years in Kenya. Yara is currently working on developing technology that makes fertilisers available to the smaller farms off the beaten track, which have previously been difficult to reach. Together with IBM, they have launched a weather forecasting app, which allows farmers to customise watering / harvesting, including advice on how to make the most of the crop regardless of weather.
However, companies do not need to be big to have a big impact. One company that visited Kenya this month is called “Find My” – www.findmy.no . It all started with a sheep farmer from Norway who needed a solution when many animals disappeared from pasture. A sheep bell that sends signals through satellites to the phone was the solution. Now they are taking the solution to Kenya - where the problem is equally known, and as of today they have only tracking via GSM. An added thrill is that the animals are often in the same areas as predators such as lions and hyenas. In November 2019, this Norwegian farmer met a Kenyan farmer with 700 animals interested in using the bells, and this month the delegation mounted the first 30 bells on the cows.
On the other end of the spectrum, The Government Pension Fund Global, the world’s largest sovereign wealth fund, started investing in Kenya in 2012 and had by the end of 2018 an equity portfolio of KES 10 billion. The investments are distributed between 17 Kenyan companies.
Norfund has a portfolio worth approximately KES 23.16 billion in Kenya, which is invested in clean energy, agriculture and the financial sector, as well as eco-tourism. Norfund has its regional East Africa office here in Nairobi. Kenya is one of Norfund’s largest investment markets. Norfund has a mandate to enter as a minority owner or lender in companies, but also has indirect ownership in a range of companies through various investment funds.
There is an evident connection between education and business development. There are clear expectations that businesses should contribute to job creation and wealth creation in local communities. This is vital to ensure sustainable job creation and business development in accordance with SDG 8 – Decent work and economic growth. The Norwegian government expects that Norwegian companies conducting international business are well versed with and work by the OECD guidelines for responsible business and the UN’s guiding principles on human rights in relation to business.
An unfortunate deterrent for Norwegian companies considering Kenya as an investment destination is, however, the continued presence of corruption. Our business actors are well aware of Kenya ranking 137 of 180 countries on Transparency International’s Corruption Perception Index. The Norwegian government therefore fully support the ongoing Kenyan measures in combating this endemic evil.
Kenyan products are also increasingly popular in Norway. Imports from Kenya to Norway has doubled in the last decade, earning Kenyan producers Sh5.5 billion in export revenues just last year. Although Norway runs a large trade deficit with Kenya, with our exports valued around KES 1.6 billion, we are pleased to also note an increased Kenyan appetite for Norwegian quality products.
The trip made it evident that more and more Norwegians have taken note of the consistent and impressive growth rate of the Kenyan economy over the last decade. The entrepreneurial spirit of the Kenyan people is also attracting investors. A sound macroeconomic environment with a stable currency, low inflation rates and solid foreign reserves makes Kenya even more appealing. Kenya showed itself yet again as a dynamic market with vast opportunities to the Norwegians visiting last month.
Elin B. Rognlie is the Norwegian Ambassador Kenya