Discussing the Latest Investment Opportunities in Kenya with Olivia Rachier of KenInvest

Interview with Olivia Rachier, Acting Managing Director at Kenya Investment Authority (KenInvest)

Olivia Rachier, what is the function of Kenya Investment Authority?

KenInvest is a statutory body formed under an act of parliament, the investment promotion act. Our main objective is to promote investments in Kenya. We facilitate those investments, new projects, and we provide aftercare services. These aftercare services are for those who are new in the investment scene, as well as the existing ones. We also organize investment promotion activities, both locally and internationally. We have the one stop center at our headquarters where we bring in different agencies to help with the facilitation of investments. These include registration of companies through the business registration services, tax registration and pin numbers, through the Kenya Revenue Authority (KRA), and the environmental impact assessment, which is done by the National Environmental Management Authority (NEMA). We also have the immigration department with us who assist in giving investors their permits and special passes. We are looking to bring in more agencies into the one stop center in order to ease facilitation of investments.

We are present in different cities. Nairobi is the headquarters. We have an office in Mombasa, which is the second biggest city. We have another one in Kisumu, which is the third largest city, and now one in Eldoret. We are looking to expand because the counties are divided into economic regional blocks, so we might take that direction in future.

How would you define the Kenyan economy? What are the latest news?

Kenya is quite a force to be reckoned with in the East African region and the whole Sub-Saharan Africa.

The pandemic definitely had a significant impact on the global economy, and obviously it had a negative impact on the Kenyan economy. The rate of FDI inflows has reduced, as well as the domestic one, as we went through a session where there was lockdown and there was no movement. A lot of businesses were shutting down. A lot of citizens lost their jobs, many companies closed, but the economy opened towards the end of 2021, and we are quite positive. We are looking forward to building that confidence back to investors and getting them to open up again and to expand. With the lockdown and the curfew being lifted, you can already see there is a bit more vibrance in the economy and it is starting to pick up.

KenInvest has put in place strategies to help some of these investors to recover, be it local or foreign investors. Could you tell us more about that?

The first strategy was for us as KenInvest to come back to our physical presence in the office because we were working from home and coordination was not easy. So we came back and adjusted to the new normal where we are observing the COVID protocols. But coming back to the office also allowed us to be much more in touch. We were doing investment promotion virtually, but it was not the same. You really need to be physically in touch with the investor. For instance, it is not easy to do aftercare services virtually. The investor needs to see you to be able to trust you. When you are there in person, it builds confidence.

We have just enhanced our e-regulations to bring in more processes on the digital platform, like e-opportunities, where we are profiling various projects and posting them online so that investors are able to see them and interact online. We had the Dubai Expo, which has been going on from October and is ending this month. We also had the Kenya Week and even our President was there in person, as well as our cabinet secretaries, various institutions, various investors, just going out there to look for opportunities, and we were also looking for more investors to come in and invest. We will be having a road show in the United Kingdom in the coming weeks, so we are really just now beginning to go back out there and try and attract more investments.

You mentioned e-opportunities and e-regulations, and it is true that the world is going digital now. But is it the same to digitize things in the economy? What exactly is the situation in Kenya?

We have generally gone digital through the eCitizen platform, where all government facilitation is done online, whether it is your passport you are renewing or applying for, your identity card, your driving license renewal, immigration, you name it, it is all there. However, you find that it is not completely digitized, and therefore, just like when you have these visas in some countries, you still have to go and give your biometrics. Those are the little challenges here and there, but the government is on full throttle trying to get the whole system digitized. At KenInvest, we brought in those various eCitizen platforms into our regulations and we have over 200 facilitation processes all brought in together so that, by the click of a button, it takes you to whatever institution whether it is immigration or environmental impact assessment. You can do it digitally, and even though it is not completely digitalized, we are working towards that.

How would you position Kenya vis-a-vis investors out there to come to the country?

I would position Kenya right at the top. First, because of our strategic location. Obviously, we are like the gateway to East Africa. We have a coastline; we are not landlocked. Through Kenya, you can easily access the entire East African region. You can also access all the way up to Central Africa. We are members of the Common Market for Eastern and Southern Africa (COMESA), and we are in the African Continental Free Trade Area (AfCFTA). That gives you a huge market. We obviously also signed the African Growth and Opportunity Act (AGOA) with the US, though it is coming to an end. But we are negotiating the US Free Trade Agreement, which will also give us another huge advantage. We also have the Environmental Protection Act (EPA) with the UK. We are quite a strategic investment location. We consider ourselves a real hub. We have got advanced infrastructure in terms of international airports. We have got four international airports in Nairobi, Mombasa, Kisumu and Eldoret, where investors can ship out their goods if they so wish. We have the Standard Gauge Railway, which is new, and our road infrastructure has significantly improved in comparison to the other East African countries. Again, we have improved in the area of the special economic zones, which would give certain incentives to investors, and the export processing zones as well. We are quite a force to be reckoned with in the East African region and the whole Sub-Saharan Africa.

Could you give us some success story to illustrate what you are talking about?

We have major multinationals registered here in Kenya, like the Huaweis, the Nikes, the major stores, etc. We also have many major hotels.

What are the most promising sectors in Kenya? Where are the opportunities?

We rely on what we call the Kenya Vision 2030, which aims to transform Kenya into an industrialized country. There are, of course, several sectors to focus on, like manufacturing, housing, health, food, energy, transport, ICT, education, etc. However, the current government has focused on four major areas: manufacturing, housing, universal health and the food sector. Those are the areas that are generally thriving. We have quite a number of investors who are coming in to invest in the manufacturing sector, especially textile and apparel in the export processing zones areas. Again, universal healthcare has been quite major. The President has been very focused in that area, including recently when he opened up a major investment at the Coast region. Food security is also a big one, and even the other strategic partners we have been having a conversation with in the UK and Japan, are focusing on food security in agriculture and agribusiness. These are basically the areas that we are currently focusing on. However, we are open to all other sectors and all investments in any sector is welcomed. We handhold the investor from facilitation all the way to just really getting the investment up and running.

Kenya is more of a commodity-based economy. What kind of investments have been made into trying to help industrialize the country and add value to these commodities?

We have developed our special economic zones. We have opened up Naivasha and connected the port of Mombasa through the Standard Gauge Railway to the special economic zone in Naivasha. This is a huge area where we are hoping to have more investors invest in the manufacturing sector specifically, including agriculture and agribusiness, in terms of value addition. Regarding industrialization and manufacturing, that is really the direction that we are taking. We have improved our ports. We have improved our transport so that once you set up your investment in these special economic areas you are able to export whatever you want to export, but you are also able to venture into the local market. Because that is how the special economic zone works. Whatever you produce, you can sell it locally, but you can also export, unlike the export processing zones areas, where you are only allowed to sell 20% of what you produce and you have to export 80% of it.

What is your vision for the institution? What do you want to achieve and what will the next developments be?

I would like to strengthen the mandate of the institution because currently we can do a lot more, but the legislation does not allow us. The first example I will give you is that it is not mandatory for all investors to register with Kenya Investment Authority, and that is as per the legislation, as per the investment promotion act. However, if we can amend the act to ensure that every investor registers with us so that we are able to capture that data, we will know exactly how much FDI is coming in, how much foreign investment is coming to specific sectors, and it will give us a true picture. Because currently we are relying on other institutions like the Kenya Revenue Authority, because obviously for you to set up an investment you have to have a pin, you have to register with the KRA, so we get that information from them.

Within our legislation, we have the National Investment Council, which is headed by the President, so that anytime an investor has critical issues that need to be addressed urgently, they can have a meeting with the cabinet secretaries from various ministries. Currently, due to bureaucracy, we are not able to address the challenges that investors face at the county level, but we feel that with the Council, some of these things could be solved in real time, but you have to bring it out in terms of legislation. Again, I would want to just see a better synergy between KenInvest and the county governments, because they are setting up their county investment units but we just want to work together. So I would like to see that synergy between us at the national level and the county level. Again, it is just a question of harmonization between the ministries and all the other agencies. That is my vision and I believe if we do that, we will be able to attract more investments. We are coming to the end of our strategic plan in June, so we are in the process of reviewing and just asking ourselves what direction we want to take as an institution to be able to give better service, facilitate more investments, attract more investors, and retain more investors. That is my vision for Kenya Investment Authority.

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