Business and Finance
Kenya: One-Stop Kenya Investment Shop in the Pipeline
The government has ordered Finance permanent secretary Joseph Kinyua to set up a one-stop shop where investors can obtain business permits to prop up Kenya’s position as a favourite regional investment destination.
Head of public Service, Francis Muthaura, wrote a letter to Mr Kinyua on September 8 requiring him to establish the one-stop shop by the end of this month.
“The facility should be hosted in a single hall that is convenient and easily accessible to investors and the general public,” said Mr Muthaura, adding that the decision to set up the shop was made “following extensive deliberations of the Vision 2030 Delivery Board.
The shop will be mandated to issue business permits to local and foreign investors.
The ministries of finance, immigration and registration of persons, lands, local government, the state law office and the Kenya Investment Authority will all be required to second officers to the shop. The move seeks to boost Kenya’s credentials as an investment destination that can compete with emerging regional rivals such as Rwanda, whose stature has been rising according to World Bank “doing business” rankings.
“We want to attract more investments by making our processes faster and efficient than most places on the continent,” said Mugo Kibati, the Director -General at the Kenya Vision 2030 Secretariat. “This will make the process much simpler and transparent. Even if there are further queries by an agency, an investor will go back to the same hall,” he added.
Data from the Kenya Investment Authority (KIA) shows that the country’s FDI stood at Sh145.9 billion in fiscal 2010/11, dropping by Sh100 billion from the Sh145 billion recorded the previous year.
This was much lower than the 2008/09 peak of Sh163.4 billion.
An improved regulatory environment could boost more investments in the manufacturing, property, construction, and services sectors that are most preferred by both local and foreign investors. Rwanda already has a one-stop investor shop that has played a part in boosting the country’s competitiveness. The country has in the past few years consistently emerged tops in the World Bank’s Ease of Doing Business report, pulling in billions of new investments. (Read: State must move fast to ease cost of doing business)
Rwanda was ranked 58 in the latest report, climbing from 67 the previous year and putting it at the top of Africa’s preferred investment destinations.
Data from the United Nations Conference on Trade and Development (UNCTAD) shows that FDI inflows into Rwanda jumped to $119 million in 2009, more than eight times the $14 million in 2005.
Kenya dropped three positions in the rankings to stand at 98, weighed down by relatively slow licensing processes, complex taxation procedures and high cost of registering property.
The report shows companies that have invested in Kenya fault a heavy regulatory burden that includes lengthier documentation for exports. It takes an average of 33 days to finalise the 11 procedures for licensing a business in Kenya, and three days in Rwanda.
A one-stop shop saves investors time by cutting excess red tape.
The region is attracting billions of shillings from new investors seeking to tap the enlarged consumer market under East African Community (EAC).
The facility will be housed at the Kenya Investment Authority’s offices off Haile Selassie Avenue in Nairobi. Previously, investors had to apply separately for regulatory approval from different agencies, increasing the investment lead time and costs of compliance.