Trade ministry to revitalize foreign direct investment in Kenya

By Elijah Odhiambo

The Cabinet Secretary for Investment, Trade, and Industry, Moses Kuria has said his ministry has been forced to build everything from scratch as the docket inherited Ksh500 million dollars stuck in the foreign-direct investment, discouraging investors in the country.

Speaking during an interview with Citizen TV’s Trevor Ombija, the CS said the level of foreign-direct investment in the country has been seriously stuck since he assumed office noting that he has been literally forced to build everything from scratch.

“Ksh500 million dollars has been stuck there for quite some time. Investors have stopped coming to the country. Literally I have been forced to build everything from scratch and it’s not easy,” the CS said.

In the interview done 110 days after assuming office, the former Gatundu South lawmaker described the ministry as bad news citing poorly inherited key performance indicators. He pointed out that in the exports sector, development partners have sounded an alarm that contribution of experts to Gross Domestic Product (GDP) has fallen from 28 percent to 10 percent. In the same note, manufacturers also dropped from 9 percent to 7 percent.

“All my Key Performance Indicators were down there, and when Kenyans complain that the economy is doing badly and that there are no jobs, it is not by accident, it is because of these kinds of indicators, so it is not easy,” he said.

What the ministry is doing to turn things around.

As part of the revitalization effort to save his docket, last week, the CS gazetted three pieces of land in Kwale, Mombasa, and Machakos counties respectively as Export Processing Zones to facilitate export-oriented industrialization as well as enhancing industrial growth and development in the country.

Through a gazette notice dated February 17, 2023, Moses Kuria said that areas within Bonje in Kwale county, Bombululu in Mombasa, and Mavoko in Machakos are Export Processing Zones.

“I declare all that space on the building known as Fairdeal Plaza on land title number C.R. 37448/1, measuring approximately twenty-five thousand seven hundred and forty-eight square feet, situated within Bombolulu Area, Mombasa County as an Export Processing Zone,” CS Kuria noted.

In the country, there are seven gazetted free trade zones within Athi River, Nairobi, Mombasa, Malindi, Kilifi, and Kerio Valley, managed by the Export Processing Zones Authority. The recent gazette notice increased the number of export processing zones in the country creating room for more business.

In the 2020/21 Financial Year, the value of exports from EPZs hit Ksh85.41 billion.

CS Kuria who spoke in Nairobi on February 20, 2023, during the launch of a ride-hailing app expressed the need to abolish laws that require foreign firms to relinquish at least 30 percent of their shareholding to Kenyan citizens by birth saying that such requirements are outdated and hindering international companies from invest in the Kenya.

“We have got this part in our statute that requires international companies to have 30 percent local ownership if you’re to set up some of the operations like data centres. Ladies and gentlemen ‘hiyo ni mambo imepitwa na wakati’ (those laws are outdated),” the CS said.

“I am going to take to the Cabinet this amendment to remove this regulation so that companies can come here and use this country to base their operations so that we can also live with the changing times,” Kuria added.

The law that required foreign companies registering in Kenya give up at least 30 percent of their shareholding to persons who are Kenyan citizens by birth was effected in the country in 2016 after Attorney General Githu Muigai fully operationalized the Companies Act 2015.

In the law, investors who fail to comply with the ownership rules are to be slapped with a fine of Ksh5 million.


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