Kenya is counting on agreements it has signed with China and South Korea to encourage foreign investment in domestic manufacturing.
The country signed a memorandum of understanding with Asian Tigers, allowing foreign companies to set up production facilities in Kenya.
The Kenya Investment Authority (KenInvest) has signed a memorandum of understanding with the Kenya-China Chamber of Commerce and Industry and the Kenya-China Corporation to allow it to establish a Chinese wholesale facility in the country.
Sally Mahif, chairman of KenInvest, said: “This will make products easier for retailers to access, which will in turn encourage and encourage export-oriented investment to increase inflows.” .
DL Group Kenya also signed an agreement with home appliance manufacturer Wisebridge Korea to allow production in the country.
These took place on the sidelines of the 2023 Kenya International Investment Conference in Nairobi.
The move comes as the government plans to use special economic zones (SEZs) across the country to boost local manufacturing.
This includes the recent rollout of major initiatives in the Dongo Kundu Special Economic Zone and infrastructure support to ensure it is ready for investors by the end of next year.
During a meeting with county leaders in Mombasa in January on trade talks, Minister of Investment, Trade and Industry Moses Kuria said the government was fast-tracking flagship projects in Mombasa.
“In parallel, the State Investment Promotion Department under my ministry will develop local, regional and international promotions to attract and facilitate the early entry of investors into the Dongo Kundu Special Economic Zone. ” said Mr. Clear.
He said the country is also keen to attract investors to other SEZs in Lamu, Naivasha and Kenani Leather Park in Athi River.
In March, the government implemented new electricity tariffs aimed at improving the investor environment, in response to increasing competition from countries offering cheap electricity to investors.
Under the new tariff, all investors residing in the 15 SEZs will pay a special rate of 10 shillings per kilowatt hour.
This price is the lowest price per unit of electricity across all consumption bands under the new government.
The Energy and Petroleum Regulatory Authority (EPRA) said in a statement that this is a measure to harmonize tax rates and attract more companies to set up in tax-free zones.
Kenya has 15 formal special economic zones, part of a bold goal to increase jobs and exports to drive economic growth by 2030.
A special economic zone is a designated area for the purpose of promoting and promoting export-oriented investment.
They are spread across Naivasha, Mombasa, Kisumu and Machakos, with plans to provide more land for the facility.
Special economic zones within the country also enjoy special taxes and infrastructure that facilitate a wide range of activities such as storage, export and re-export.
Investment Promotion Secretary Abubakar Hassan said on Tuesday that the government has reduced the tax on foreign companies in the country from 37.5% to 30% to attract more investments and increase the contribution of manufacturing to GDP.
According to Trading Economy data, manufacturing GDP in the fourth quarter of 2022 rose to Sh217 billion from Sh202.9 billion in the previous quarter.
According to market researchers, the sector's GDP is expected to grow to Sh241.3 billion in 2024 and Sh254.9 billion in 2025.
