Highlights
While Kenya was a magnet for foreign direct investment in East Africa in the 1960s and 1970s, the country has underperformed significantly in the past couple of decades. A wide array of TNCs are nevertheless present in the country, and FDI has played a key role in some of the dynamic sectors of the economy. The IPR recommended a more pro-active strategy of FDI attraction and proposes policy measures to enhance the impact of FDI on growth and economic development, focusing on:
- The manufacturing of basic consumer goods and industrial inputs for the regional market.
- The development of Kenya into a regional services hub.
- Agri-business activities.
- Diversification of activities in export processing zones.
The IPR also warned the government on the possible drawbacks of the then recently adopted Investment Promotion Act, which introduced minimum capital requirements for FDI entry. Subsequently, the Government proposed amendments to Parliament to lift these requirements .
Follow-up activities
Following the publication of the IPR, UNCTAD has assisted the government in a number of ways, with UNDP financial support, unless mentioned otherwise:
- It held a workshop with members of parliament to sensitise them to the key findings of the report.
- It conducted training for the staff of the investment promotion agency on corporate taxation.
- It produced an Investment Guide to Kenya and one for the East African Community.
- It produced a Blue Book on Best Practices in Investment Promotion and Facilitation (funded by the Japan Bank for International Cooperation).
- It assisted the investment promotion agency to develop an investor targeting strategy.
- It organized two investment fora, with the investment promotion agency. One, with EXIM Bank India , to attract Indian IT investment and the other, with the China Africa Business Council, to attract Chinese SME investment.
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