Uncertainty over elections clouds investment flows
Posted Monday, June 25 2012 at 19:59
Growing uncertainty over the next general election is clouding Kenya’s bid to attract external capital even as policy makers move to package the country’s potential to host foreign investments.
Experts say rising terrorism incidents linked to lawlessness in neighbouring countries as well as fear of a repeat of the 2008 post-election violence in which the economy lost Sh1.2 billion top the list of concerns among foreign investors.
“We can tell from the picture painted by investors’ perception that they are very positive about Kenya, but extreme caution is required in handling elections which come in less than one year from now,” Aeneas Chuma, United Nations Development Programme Coordinator for Nairobi, said yesterday at the launch of Investment Guide to Kenya.
Foreign investors are attracted to Kenya by reforms in licensing procedures, a highly trained labour force, increased investment in infrastructure and the active private-public engagements, said Mr Ian Richard, a private consultant engaged in drafting the guide.
Others are proximity to the newly installed Government of South Sudan, regional integration and the country’s new constitutional dissension.
Officials said insecurity topped the list of challenges that stand in Kenya’s way to boost its international perception.
“Insecurity is a major issue. Kenya is like a big brother in the region and whose ability to exert authority is seriously undermined by lawlessness in neighbouring states,” said Mr Mwangi Ngumo, chairman of Kenya Investment Authority.
More resources, he added, should be dedicated to intervention programmes such as the ongoing military operation in Somalia to boost investor confidence in Kenya.
At the National Economic Social Council (NESC), however, officials maintained that the forthcoming election should be seen as one step towards creating investor confidence.
“Through chapter six, which emphasises integrity of public officials, the implementation of this part of the Constitution after the next election will introduce a new national value system that has been lacking in public service,” said Mr Leonard Kimani, director of the economic sector at NESC.
The Kenya Investment Guide 2012 developed by Kenya Investment Authority in partnership with the United Nations Conference on Trade and Development (UNCTAD) provides details of all the country’s investment opportunities and conditions.
Its aim is to broaden the marketing of the country’s potential beyond these traditional factors.
“This document comes in handy as a marketing tool with the aim of making our country a preferred destination for foreign direct investments,” Treasury PS Joseph Kinyua said in a speech read on his behalf by finance secretary Mutua Kilaka,