The Kenya Investment Authority is lobbying for a change in the law to have all foreign investors into the country registered.
Speaking to the Nation, the authority’s managing director Dr Moses Ikiara said the rule will make it possible for Kenya profile all investment inflows.
“We are trying to see whether we can amend the law so that we make sure that we are able to get reliable statistics by making everybody registers with us,” Dr Ikiara said.
At the moment, it is not mandatory for foreign investors to register with the authority. This has made it difficult for the watchdog to find out the scale of foreign direct investments (FDIs) that have come into the country and in particular, to which sectors of the economy.
A lot of the FDIs have come through many agencies like audit firms, thereby foregoing the necessity of having to register with KenInvest, but the authority says this will change following proposed amendment into the regulation.
“The law that established Kenya Investment Authority (the Investment Promotion Act, 2004) does not make it mandatory for investors to register with us. So, we actually don’t know what exactly our market share is (compared to other countries in Africa),” he noted.
Established in 2004, the authority is charged with promoting Kenya as an ideal investment destination for purposes of attracting FDIs.
A recent World Bank report indicates that huge investment flows into Tanzania’s and Uganda’s oil and gas industries have seen FDI to the East African Community (EAC) member countries surpass inflows to Kenya.
Whereas Kenya got about Sh16 billion in the 12 months to June 2013, Uganda and Tanzania attracted Sh155 billion and Sh129 billion worth of inflows respectively.
The World Bank indicated that Kenya and Uganda need to do much to improve their business climate in order to attract more investments.
But, Dr Ikiara argues: “When a country has natural resources like oil and other minerals, investors don’t bother to focus so much on the investment climate. They will go there because returns are so high to cover most of the risks. Now that Kenya has discovered oil and other minerals, believe me, we are going to catch up pretty soon”.
The authority is now projecting a doubling of FDI to Kenya this financial year after a slowdown earlier in the accounting period due to security fears surrounding the general election held in March, last year.
FDI, which has targeted mostly the manufacturing and agriculture industries, is set to hit Sh150 billion in the 2013/14 financial year which will end in June due to increased confidence in the country’s investment climate as well as ambitious rail and road projects.
Already, FDI in the first half period of the 2013/14 financial year (as at the end of December 2013) stood at Sh62 billion. This was similar to FDI inflows seen in the whole of 2012/13 financial year, which was characterised by elections fever that sparked jitters amongst foreign investors.