Moses Ikiara, Managing Director, Kenya Investment Authority (KenInvest): Interview

Interview: Moses Ikiara

What is the biggest obstacle faced by prospective foreign investors in Kenya?

MOSES IKIARA: The single biggest obstacle for foreign investors is the lack of enough investor-ready projects. Vision 2030 is transformative, and it has brought with it many investment opportunities across many sectors, including agriculture, agro-processing, tourism, manufacturing, mining and real estate. However, most of these projects have not been subjected to feasibility and bankability studies. We need to invest adequately to prepare and make the many projects investor-ready.

Which measures is the government taking to improve Kenya’s position in the World Bank’s annual “Doing Business” rankings?

IKIARA: We realise how important the “Doing Business” ranking is and that improvements can be made. The Cabinet has thus formed a committee that is dedicated to improving the country’s ranking in the “Doing Business” index. This committee is already working on changing laws and regulations, and on undertaking further waves of reforms.

A key project under KenInvest that is on track to be finished by December 2015 is the “one-stop shop”, which is being established so that investors can undertake and finalise all necessary requirements and procedures at one single location in terms of establishing a business. These efforts have led to Kenya earning the accolade of 3rd most improved country globally in the recent World Bank rankings.

What sectors stand to benefit the most from increased foreign investor participation?

IKIARA: Many sectors require increased domestic and foreign investment. A more competitive energy sector is crucial for the country; this is one of the factors that has been holding back the competitiveness of our products. The recent launch of the 280 MW geothermal project has done much to boost generation capacity and has lowered the price of energy by as much as 25-30%. But increased investments are necessary if the country is to achieve its goal of adding 5000 MW of generation capacity by 2017 and reducing power costs to $0.07-0.09 per KWh.

In terms of investment opportunities, agriculture and agro-processing are also rich and top priorities. The goal of the country is to add value to agricultural products and to create more dynamic and thriving value chains. Providing more production incentives for farmers should boost employment and incomes. Infrastructure development is also a crucial element that will support economic development throughout the country, especially by connecting rural areas to the international market.

Do you expect ongoing global economic uncertainties to affect investor appetite?

IKIARA: Global economic uncertainties affect investor appetite to the extent that their access to investable capital and economic growth prospects are affected. A weak domestic currency can lead to more interest in foreign direct investment (FDI), as foreign currency value is stronger in the local market. Macroeconomic stability is crucial for investor confidence. The important thing is predictability, so a priority is to stabilise the currency and the levels of inflation. We expect strong growth in FDI for 2015, possibly even stronger than the 98% and 92.4% increases in FDI seen in 2013 and 2014, respectively, due to the expected strong economic growth and high-level events such as the Global Entrepreneurship Summit 2015, that have provided rare marketing opportunities to the country. Moreover, KenInvest, working with various partners, has introduced the annual Kenya International Investment Conference every November, where investors looking for opportunities can meet with project promoters in different sectors.