Kenya eyes economic growth with Vision 2030
Governments chase economic development and growth in order to improve their citizens’ income and quality of life. To do this, states often rely on private enterprise to fund and fuel the process. Governments stand to gain by improving their standing with the electorate, while businesses invest with the hope of growing their profitability. In some cases, this happens without there being an over-arching plan in place. In others, a vision and complementary policies are needed to kick-start progress.
Kenya has been working on its grand plan for the future, dubbed Vision 2030, since 2008. The scheme is based around the three pillars of economic, social and political progress, enabled by facilitating projects and macro factors. It is hoped that the reforms and developments in these areas will bring greater prosperity to the country. Flagship projects drive each of these pillars, and it is hoped that these will enable and encourage further investment and development.
The Economic Pillar
The economic pillar’s flagship projects are divided by sector, covering agriculture, trade, tourism, financial services and manufacturing. Tourism is a core focus of this pillar, with Kenya aiming to capitalize on its tropical scenery and coastline with new resort cities. There are also cultural tourism initiatives based on the region’s history as the cradle of humankind. Consequently, there are opportunities for hospitality businesses, construction companies and tour operators to invest with government support.
Konza Technology City, which launched in January 2013, was created as a hub for business process outsourcing and IT services. The project hopes to generate 100,000 jobs by 2030 by using the population’s English skills and relatively low labour costs to compete for IT support contracts. The development is also attractive for other back-office services that can be performed remotely using technology.
Industrial parks for SMEs are another project being piloted by the Kenyan government. The first five are located in Nairobi, Eldoret, Mombasa, Kisumu and Nakuru. Each of the parks focuses on a different industry, ranging from metals in the Nairobi park to the processing of fruit juices and vegetable oils in Mombasa. Some of these piggyback on Kenya’s agricultural sector, which is also being developed as part of Vision 2030 with an irrigation scheme.
Kenya’s capital markets are currently being liberalized, with the Nairobi Stock Exchange already demutualized and the bond market having been simplified. Real estate investment trusts have now been legislated for, meaning that there is a better way to make collective investments in the Kenyan property market. By strengthening the domestic investment markets, it is hoped that Kenyans will begin to save and invest at a greater rate than they do currently.
Opportunities for investment
Vision 2030 should give both direct and indirect benefits to foreigners making investments in Kenya. The direct opportunities include expanding existing businesses into Kenya to make use of the new infrastructure being created. An example of this would be hiring Kenyan IT support staff as part of an outsourced or offshored service offering. Opening a food processing plant at the Mombasa industrial park is another option. Should the scheme succeed on a macro level, foreign investors will benefit across the board from an increase in Kenyans’ disposable income and therefore be able to take advantage of their greater spending power.
Kenya is a great starting point for businesses that have not yet entered the east African market due to the nation’s receptiveness to new concepts as exemplified by the rapid adoption of mobile money through M-Pesa. The country is also relatively well-developed for the region, meaning that there is a sufficiently strong market to support well-thought out entries and experiments.
Vision 2030 : https://www.vision2030.go.ke/
Economic Pillar – Flagship projects: https://www.vision2030.go.ke/index.php/projects/economic
Starting a business in Kenya: https://www.healyconsultants.com/kenya-company-registration/
Success tips for doing business in Kenya: https://www.healyconsultants.com/kenya-company-registration/other-information/