Kenya, East Africa’s biggest economy by gross domestic product (GDP), has liberalised its economy to enhance investment and inflows, an envoy said at a recent South African summit aimed at expanding trade between the two economies.
Kenya’s cabinet secretary of foreign affairs Amina Mohamed expressed her hopes that their decision would achieve its desired goals.
“I am pleased to say that Kenya has now fully liberalised its economy by removing all obstacles that previously hampered the free flow of trade and foreign private investment,” she told delegates at the three-day Kenya Investment and Trade Summit held in Cape Town.
Mohamed said the Kenyan government had “painstakingly” undertaken economic reforms in order to create the necessary environment to attract foreign investment.
“Today, our economic fundamentals are strong, the outlook is positive and the market is friendly and profitable,” she said.
Hindrances to investment in Kenya included the ethnically charged post-election violence in January-February 2008, which left approximately 1 200 people dead and 600 000 displaced. The state of political instability caused investors to reassess Kenya’s investment climate. Corruption and poor governance also caused investors grave concern.
To attract investment, the Kenyan government has enacted several reforms, including: abolishing export and import licensing (except for a few items listed in the Imports, Exports and Essential Supplies Act); rationalising and reducing import tariffs; revoking all export duties and current account restrictions; introducing a free-floating exchange rate; allowing residents and non-residents to open foreign currency accounts with domestic banks; and removing restrictions on borrowing for foreign, as well as domestic, companies.
Administrative and legal procedures have been streamlined to create a more attractive investment climate. Kenya has also launched a national e-registry to ease business license processing and help improve transparency.
During the summit Mohamed addressed government officials and business leaders from Kenya and South Africa, who represent the biggest economies in their respective regions.
Capetonian businessman Cuthbert Malcolm said opportunities in Kenya were worth exploring.
“We rarely get such important economic conferences to boost trade and investment between two nations, hence I’m coming to participate,” said Malcolm.
Kenya high commissioner to South Africa Jean Njeri Kamau encouraged business executives, government officials and experts in various industries to take advantage of the mutual economic benefit of the partnering nations.
The Kenya-South Africa Trade and Investment summit broke ground in 2015, and is now in its second year. “This second annual convening promises to provide South African firms with the tools that will lead to more investment in Kenya,” said Kamau.
She said the second summit “was an opportunity to underscore some of our country’s greatest strengths, including a vibrant culture of innovation, a skilled and productive workforce, and [an] attractive consumer market. The summit will ensure both policymakers and business from the two countries pursue win-win solutions to attract investment, growing trade, and better infrastructure to drive a faster rate of economic growth”.
Kenya is East Africa’s economic giant with a GDP of $60.9-billion and a population of 46 million. South Africa boasts a $351.8-billion GDP with an estimated population of 51 million.
Trade between the two African countries has increased steadily in the last 20 years. In 1994, the value of Kenyan imports from South Africa was approximately R716-million, while Kenyan exports to South Africa were valued at about R28-million.
In 2015, the value of Kenyan imports from South Africa was about R8.2-billion, while Kenyan exports stood at around R241-million. — CAJ News
Kenya-South Africa relations strengthened
The Kenya Trade and Investment Summit — aimed at improving South African investments in Kenya — is set to further boost the already solid relations between the two countries.
Kenyan Minister of Foreign Affairs Amina Mohamed said the event would help maintain the two countries’ growth as economic powerhouses in their respective regions.
In an interview with CAJ News at the trade summit in Cape Town, Mohamed said South Africa has more than 60 companies operating in the East African nation, and that Kenya looks forward to signing more bilateral agreements with the country that has just regained its status as Africa’s largest economy.
“The timing has always been right to start these kind of relations,” she said, adding that new agreements would result in the removal of tariffs and other trade barriers that had delayed bilateral trade relations.
Mohamed dispelled perceptions that East Africa’s economic powerhouse was not conducive for investment due to the terror attacks perpetrated by insurgency group Al-Shabab. She said the country was on high alert to curb further attacks, and cited examples of terrorism inflicted on developed nations such as France, Turkey, Belgium, and the US. “Such happenings are not [just] in Kenya, but elsewhere across the world.”
The safety and security of the Kenyan political and economic climate, she added, has attracted the presence of more than 100 British companies in the country, as well as several others from Japan, China and India.
In another development aimed at enhancing Kenyan-South African relations, Mohamed revealed more bilateral agreements would be signed before end of this year when President Uhuru Kenyatta hosts his South African counterpart, Jacob Zuma.
Zuma has confirmed he will make a state visit to Kenya in October.
At the end of August, Kenyatta and Zuma met on the sidelines of the sixth Tokyo International Conference on African Development in Nairobi to discuss regional security and bilateral issues. — CAJ News