Kenya:High-return Investment Opportunities in the Year

Kenya’s $ 35 billion economy is eastern Africa’s largest. It is a sophisticated, fast growing economy with fast expanding need for increased investments in practically all key areas. Here, we highlight the hottest of these opportunities in the year 2010.

Wildebeest migration over Mara River is among the Seven Wonders of the World With a stated goal to grow the economy at the rate of 11 per cent per year, Kenya is hungry for investors, both local and foreign. In the years immediately following the new political regime led by the Narc party, the economy was able to grow the economy from negative growth rate to more than 7 per cent. But following the chaos that broke out in most of high potential areas in the wake of badly-flawed December 2007 general elections the economy slowed down to one per cent growth rate. The problem was compounded by a prolonged drought in 2008 and early part of 2009 and the global economic recession.

These problems have however eased down – there is peace now with a government of national unity, the rains have fallen and global recession is lessening its effects on the economy. There are therefore, hopes that the economy has recovered and is actually on the path to accelerated growth again. Experts in fact are forecasting a growth rate of 4 per cent in the early months of 2010.

High return investment opportunities are expected in the following sectors:

1. Tourism

Tourism is a key foreign exchange earner for the country. And it is also one of the industries offering the most attractive investment opportunities. In deed, the government is going out of its way to encourage both local and foreign investors to invest in the industry.

Types of opportunities

The need to diversify both the products and services offers opportunities in what is called community tourism utilizing cultural resources and eco-tourism utilizing natural resources. And Kenya is well endowed with both. Other opportunities exist in hotels (game lodges, beach cottages, and service apartments), restaurants and tour operators.

2. Manufacturing

The manufacturing sector is hinged on the many trade agreements and regional groupings that Kenya joined. These agreements and groupings offer expanded markets and therefore, very attractive opportunities to manufacture for export.

Export opportunities

The East African Community brings together the five countries of eastern Africa – Kenya, Tanzania, Uganda, Rwanda and Burundi – in a duty free trade region. Similar, a larger grouping, Comesa, offers yet other export opportunities to more than 10 million countries in eastern, northern and southern Africa, including some of Africa’s strongest economies such as Egypt.

The American market can be accessed through the African Growth and Opportunities Act (Agoa) which gives duty –free export of a wide range of products including textiles and apparels. Other countries with special trade agreements with Kenya include Austria, Canada, Japan, New Zealand and Switzerland which join the United States to form the General System of Preferences.

3. Infrastructure

As a developing economic and a fast growing population, Kenya is in dire need of infrastructural investments.

Areas of opportunity

Urgent need exists for invests in energy installations and generation. At the moment, the country relies on three very expensive and erratic sources of energy, water, petroleum and wood. Frequent rationing of electricity has increased the need for diversification and greater supply of cheaper and more reliable energy. There are other areas such transport (roads, airports, ports, and railway) and dams (water storage and treatment) and communication and information.

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