Foreign investors are concerned about security and corruption as hindrances to more investments in the country. A survey conducted to inform the Foreign Investment Survey (FIS) 2015 also highlighted tax administration, cost of electricity and politics as major issues that would determine foreign investments in the country.
They said these issues need urgent government intervention in order to ensure smooth business operations in the country.
Respondents perceived domestic market growth potential, rule of law and existing regulations; availability of skilled workforce; quality of infrastructure and logistics; and access to other markets as the five major factors attracting them to do business in Kenya.
In respect to starting a business, respondents perceived that it takes a long time to register property and to acquire work permits. However, it takes a short time to register with social benefit schemes and the tax authority. The cost of access to business credit, electricity connection and acquisition of work permits was perceived to be high.
More than half of the investors interviewed felt that improvements in the access to telecommunication services, internet reliability, transport infrastructure and tax administration over the last two years (2013 and 2014). However, security, counterfeiting, corruption and access to land were rated to have deteriorated over the same period.
With regard to the direction of investment, majority of the respondents indicated that they would most likely improve on existing facilities, diversify range of products, recruit locals, ensure gender balance and acquire additional capital goods.
The FIS 2015 report presents foreign investment by type, magnitude and direction. The report also provides an assessment of investors’ perception about the country’s investment climate in 2015.
The survey targeted 736 enterprises.