The Kenya government, spearheaded by the Ministry of Foreign Affairs and International Trade, held an inaugural Kenya Easter Diaspora Investment Conference from March 31 to April 2, 2015 in Nairobi. Kenya recently launched its first ever Diaspora Policy, which intends to create a more inclusive environment for Kenya’s foreign residents in the economic development and governance of the country.
The Hub’s investment and ICT team (joined on the first day by the U.S. Department of Commerce) participated in several conference sessions.
Takeaways from the sessions and overall conference included:
Trade and Investment:
- Kenya’s role in international trade and the need for stronger participation at the World Trade Organization (WTO). Kenya will be hosting the WTO Ministerial Conference later this year.
- The huge market potential for Kenyan exports and increased regional trade if the EAC, COMESA, and SADC join as one trading bloc.
- The need for value addition in primary exports particularly key commodity exports such as tea and coffee in order to capture more value from trade and creating more jobs in the process. It was noted that by exporting commodities in primary form, Kenya is losing potential jobs to other economies where the value addition is done, then Kenya imports the final product.
- The need to reconfigure Kenya’s overseas missions to become economic/business facilitation agents. Israel and India were cited as notable cases of countries that have done this successfully.
- Innovative avenues through which diaspora can engage in the economy of Kenya – including diaspora SACCOs, Public-Private Partnerships (PPP), the government is also considering a diaspora bond.
- The major challenges to investment in Kenya are: insecurity, energy shortages, political rivalry and skill shortages.
ICT and Innovation:
- The government is investing heavily in e-government initiatives such the e-citizen portal and bringing as many public services online as possible. Notable was the Huduma Centers initiative under the ministry of planning.
- There are multiple opportunities for investment in technology. Kenya is known worldwide for technology innovation.
- A shortage of Intellectual Property (IP) legal specialists is hampering innovation.
- The Konza Technopolis initiative received significant mention. This is a government initiative to create a physical technology hub. Konza also presents various opportunities for investors.
- There was mention of major potential investments in the country.
In 2014, Kenya’s diaspora collectively sent back US $1.43 billion in remittances, that is about 2.4% of Kenya’s GDP, of which roughly 25 per cent was targeted at making investments back home. The government is keen on increasing this and tapping more for investment purposes. The over 105,000 Kenyan residents in the U.S. have consistently sent home the highest proportion of remittances. According to Central Bank of Kenya figures, in December for example, they sent back US $57.4 million out of the total US $130.7 million remitted.
President Uhuru Kenyatta in his opening address and an interview thereafter underscored this need and called for the creation of enabling policy environment for this to take place.
Kenya is also seeking economic partnerships with a key focus on establishing or extending trade and investment relationships with African countries. Kenya has already signed agreements with key partners including South Africa, Egypt and Ghana.
The conference came against the backdrop of an announcement by the U.S. government that President Barack Obama will make his first state visit to Kenya in July. President Uhuru Kenyatta stated that key on his agenda during talks with the U.S. president will be investment promotion and entrepreneurship development.