Kenya: A Promising Business and Outsourcing Hub
Posted on Sep 05, 2017 by BPTeC-Kenya
Since 2004, Kenya has significantly shown impressive progress in stabilizing its economy. For the past few years, the country has been consistently focused on increasing its engagement on high-value industries in business process outsourcing, basic contract enforcement, and education.
In June 10, 2008, H.E President Mwai Kibaki has officially launched Kenya Vision 2030 to revolutionize Kenya into a globally competitive and prosperous country. It was created through an all-inclusive participatory stakeholder consultative process involving Kenyans from all parts of the country.
Kenya, despite facing severe challenges in the areas of judicial and legal reform and corruption, still shows remarkable development compared to its neighboring countries in Africa. In a recent study conducted by Quantum Global, Kenya’s rate exceeds the average economic growth for sub-Saharan Africa for the past eight years. The study shows that this growth is driven by its strong domestic demands, public infrastructure investment, low oil price, and macroeconomic stability. With its stable macroeconomic environment, Kenya poses a relatively high exchange rate, low-levels of liquidity, and low import cover. Its public investment and fiscal transfers to counties has also ensured a broad-based geographic growth.
Having a free enterprise economy with the largest gross domestic product (GDP) in East and Central Africa, Kenya is now considered as a promising and favorable business destination. Apart from its strong service industry, its capital, Nairobi also has the country’s largest telecommunication and commercial hub providing significant growth opportunities to investors from foreign countries.
Apart from Kenya’s growing and impressive economy, there are a lot of reasons that highlight the country as an ideal business hub. These include:
- Tax treaties and preferential market access- Kenya is a signatory to protection agreements such as the Africa Growth Opportunities Act (AGOA), ACP Cotonou Agreement, and Multilateral Trade System (MTS) which give privileged access, duty reduction, and freedom from quota restrictions in related world markets.
- Strategic location- Kenya is located on the East African coast, a strategic position for investors who want to have access in the East Central African market with more than 385 million consumers. The Kenya-Uganda railways and port of Mombasa are also a gateway to other regions. Meanwhile, Jomo Kenyatta International Airport serves as connection to Asia, Europe, and other parts of Africa.
- Regulatory reforms-Kenya has also established reforms geared toward lowering the cost of starting and running business in the country. Its regulatory reform is intended to simplify, make transparent, and minimize number of licensing requirements.
- Educated and skilled labor force- Almost 55 per cent of Kenya’s population are aged 15-60 which makes them an ideal and perfect fit for the labor force. It is composed of locally-trained professionals while a small percentage of locals are trained from different parts of the world.
- Established private sector- Kenya has three main organizations namely The Kenya Association of Manufacturers (KAM), the Kenya Private Sector Alliance (KEPSA) and Federation of Kenya Employers that facilitates regular round table dialogs between the government and the stakeholder to address the challenges faced by the investors.
- Transport infrastructure- Kenya has embarked on building high-speed railway from the port of Mombasa to Nairobi then to Uganda and Rwanda. A new port is also under construction in Lamu as a railway line linking it to Ethiopia and South Sudan. All these transport infrastructure position the country to new avenues and regions for investment.
Kenya’s impressive technological and economic achievements are predicted to continuously attract investments from venture capitalists to some of the world’s multinational corporations in the coming years. Its continuous progress and stability has indeed transformed the country from a fragmented nation to an oasis of opportunities.