Kenya

The Nairobi Securities Exchange (NSE) is set to demutualise in the coming months and sell equity in an initial public offering, an important step in Kenya’s plan to grow its financial sector. The move sets the stage for the next steps of its capital markets master plan, which will introduce new alternative instruments, including derivatives, futures, and real estate investment trusts (REITS) in years to come.

Kenya’s government is currently considering the final iteration of a bill that would establish three special economic zones (SEZs) within the country. The SEZs will allow lower levels of taxation and fewer regulatory hurdles, and will focus primarily on industrial activity, in particular textile production. The SEZ bill is part of a broader initiative to boost the manufacturing sector, diversify the country’s exports and encourage the creation of up to 1m industrial jobs annually.

Kenya’s transport networks are expected to see a number of significant upgrades in the coming years as a spate of multibillion dollar projects break ground, with the private sector’s involvement set to expand following the passage in 2013 of the Public-Private Partnership (PPP) Act.

Having already benefited from initiatives such as mobile banking service M-pesa, Kenya’s commitment to further develop the information and communications technology (ICT) industry is expected to create opportunities for private sector investors.

A nascent mining industry is forming in Kenya, with the first large-scale mining project expected to begin exports this month, although a spate of changes to the regulatory framework over the past 18 months has made for a tighter operating environment for producers.

Last year Kenya saw robust economic growth, thanks in part to a smooth conclusion to the March presidential elections as well as to the discovery of new hydrocarbon deposits and aquifers. Planned reforms and devolution look set to improve the overall business environment over the course of 2014, although the East African nation still faces challenges.