By James Ndwaru
The prospective stability and economic recovery expected under the new administration in Kenya will no doubt make way for the realization of huge money investments in the countries.
- Kenya has the most stable political system in Africa and is the biggest economy in East Africa.
- The transition also happened peacefully, marking a new chapter for Kenya under President William Samoei Ruto.
- As far as where to put money is concerned, Kenya has numerous investment sectors with tremendous potential.
Kenya has the most stable political system in Africa and is the biggest economy in East Africa. Foreign investments have always been acceptable in Kenya, and the country has made several initiatives to improve the ease of doing business.
The Kenya Vision 2030, established by the government in partnership with the corporate sector, civil society, development partners, and other stakeholders, aspires to make Kenya an industrialized country by 2030, with a thriving middle class and a good quality of life for its population.
Kenya has developed a strategy that has attracted many investors to its primary economic sectors. Due to Kenya’s limited domestic market (about 40 million people), the country has been constructing large infrastructure projects to connect itself to neighbouring East African nations.
This has expanded the domestic market for Kenyan businesses to as many as 400 million people. Agriculture drives Kenya’s economy, but the nation has resorted to alternative sources, such as mining, tourism, and commerce, in recent years. This shift has led to significant discoveries, including oil and rare minerals such as gold.
Kenya’s economy is wholly liberalized, with no exchange or price regulations. No restrictions exist on residents and non-residents borrowing domestically or internationally. Investors are provided with a complete investment package to increase the country’s mineral exploration and extraction potential.
Although modest, Kenya’s mineral resources and a potential supply of precious commodities such as titanium are desirable. As a result, critical areas of the Kenyan economy need investment to transition from agrarian to industrial.
The great promise of political stability under the new administration
Kenya’s performance in World Governance Indicators (WGI) ratings has been worse than in CPIA ratings due to post-election political violence, notably in 2007-2008. Kenya went to the polls on August 9, 2022. The process was peaceful, a remarkable shift from the last elections characterized by chaos and post-election demonstrations.
The transition also happened peacefully, marking a new chapter for Kenya under President William Samoei Ruto. Thus, Kenya will continue enjoying a stable macroeconomic environment. The new government has promised to operate sound macroeconomic policies to enhance growth by offering a safer environment for private sector investment decisions.
The nation has had ten years of steady leadership. During that period, the government confronted the challenges of corruption and, more recently, the Covid-19 pandemic, high cost of living and a high debt-to-GDP ratio. However, the new administration plans to address these issues through careful planning and execution of programs that promote trade, job creation, the ease of doing business and investment.
Political stability will continue under the new leadership. Consequently, the WGI ranking will improve in the coming months placing Kenya on the verge of economic transformation. Kenya’s investment climate will grow stronger, with FDI flowing in from emerging and developed markets.
Kenya’s foreign policy good for investment
Since achieving independence, Kenya’s foreign policy has changed to reflect shifting global trends. Notably, Kenya’s foreign policy did not significantly change throughout the ten-year administration of departing President Uhuru Kenyatta. He remained committed to the principles of the 2014 foreign policy paper and prioritized the economy.
Style-applied techniques and the ranking of external partners and connections have changed. For instance, Kenyatta has been more involved than Kibaki in implementing and promoting Kenya’s fundamental interests internationally.
As the new administration assumes office, it is essential to note that regime transition does not necessarily result in drastic changes to Kenya’s foreign policy strategy. However, the next leader of Kenya, President Ruto, will have his leadership style and may reorganize Kenya’s foreign policy goals to accommodate the country’s present circumstances.
Even as he pursues leadership in East African Community activities, Ruto’s government will likely prioritize the development of economic interests. Regarding security, the peace diplomacy pillar of Kenya’s foreign policy will continue to play a crucial role.
Outstanding investment potential and opportunities under the new administration
Kenya has been described multiple times as a “hotbed” of investment opportunities. This claim is valid not just because of its prospects but also because of the relative ease of doing business compared to the vast majority of sub-Saharan nations.
For starters, the most outstanding economy in East Africa has a rapidly expanding consumer market with exceptional market access. In addition, its strategic geographic position facilitates connection with the rest of the world, therefore attracting investment. Furthermore, Kenya has robust capital markets and a thriving private sector.
As far as where to put money is concerned, Kenya has numerous investment sectors with tremendous potential. The prospective stability and economic recovery expected under the new administration will no doubt make way for the realization of huge money investments in the countries.
Several transport projects have been initiated on Kenya’s path toward infrastructure improvement to accomplish Vision 2030. The build-operate-transfer investment model applies to projects in the transportation industry.
Kenya Railways Corporation is promoting the Nairobi Commuter Rail as a potential investment opportunity. The project seeks partners to operate the rail commuter service and will include the supply of rolling equipment.
The new rail line will offer increased, safe, economical, and efficient rail commuter services in Nairobi and decongest the capital city’s roadways.
Tourism under Kenya’s new administration
The Ministry of Tourism is seeking KES 20 billion (US$166M) in annual investments in the tourism sector to promote destinations in global source markets and further augment post-pandemic recovery efforts.
The government also plans to implement the open skies policy to ensure the hubs attract more international airlines. Further, there is a push for the tourism industry to enforce investor protection policies. This represents a liberation push implemented by immigration and transport ministries to place the tourism sector to 2019-levels.
Agriculture represents a major investment agenda under Kenya’s new administration in a bid to boost food security and lower the cost of living.
The Tana Delta Irrigation Sugar Project is looking at $120,402 million in investment. The project includes the development of 20,000 hectares of sugar plantations, building a 10,000-hectare sugar processing facility, establishing a 34MW cogeneration power plant, and constructing a 75,000-litre-per-day ethanol plant.
In contrast, the Fish Port Development Project, sponsored by the Coast Development Authority, is anticipated to need an investment of $820 million via public collaborations.
The water supply industry has not been left behind regarding investment opportunities. Through public-private partnerships, the Mwache Multipurpose Dam Development projects in Mombasa require an estimated investment of $285.04 million. It will include building an 83.7-meter-tall dam with the potential to generate 47.45 million cubic meters of household water annually.
Malindi’s Sabaki River Basin Integrated is likewise looking for public-private collaboration to generate $100 million. The Coast Development Authority is promoting a 10,000-hectare project. Among other things, the project will include grain cultivation, animal rearing, and aquaculture.
Information technology sector
Kenya’s new president William Ruto has made clear his ambition to make the country a global technology powerhouse. The Ruto-led administration intends to establish an African regional hub and promote software development for export. His government plans to spend $400 million on the entire tech strategy. The ICT sector thus presents a promising investment venture in the next five years.
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