Economy

Kandie cautions US investors on deals with counties

kandie

Ms Phyllis Kandie, the Commerce and Tourism secretary. Photo/FILE

US investors have been cautioned against rushing to seal business deals with governors and other county leaders without double-checking the offers with the national government.

Commerce and Tourism secretary Phyllis Kandie on Wednesday told the “Doing Business in Kenya” conference that legally, county leaders cannot offer tax relief to investors, except on property tax.

They can only offer free land after their respective county assemblies approve of such moves, she told over 150 investors in Washington DC.

“Devolution is one year old and talks are under way to address teething problems. I would urge you to cross-check with the Ministry of Foreign Affairs to ensure such offers are within the law,” she said.

The national government is planning a conference with governors at the end of this month to agree on the incentives the leaders of the 47 devolved units can extend to investors.

The 47 counties were created with the aim of taking more decisions at a local level, tackling unemployment and the broken health system, and revamping infrastructure.

Kenya Investment Authority Managing Director Moses Kiara said the devolved units do not have the authority to offer fiscal concessions to potential investors, and pledged to help investors who could have already signed such deals.

“Not all governors have understood devolution laws. We will sit down with the governors and the affected investors and see what we can do,” he said.

Public-Private Partnerships Unit Director Stanely Kamau said they were working with USAid to help American small-scale investors to identify investment and partnership opportunities in the counties.

He also urged the investors to involve the national government in their investment transactions.

“When contingencies arise, you will not deal with the counties, you will have to come back to the national government,” he said. Mr Kamau emphasised that the national and county governments were interdependent, adding that the devolved units were not autonomous.

“One of the governors was actually being impeached because he failed to follow the procurement rules,” he told the investors.

The national government leaders were categorical that the investment opportunities they were seeking in the US political capital were not for a particular region of Kenya and urged the investors to talk to them over tax holidays and other monetary incentives.