The country’s capital markets for instance are the deepest and most sophisticated in East Africa, according to the US State Department “Investment Climate Statements”.
“Kenya’s capital markets are the deepest and most sophisticated in East Africa,” the US says. “The Kenyan capital market has grown rapidly in recent years and has also exhibited strong capital raising capacity.”
“Investment Climate Statements” are reports prepared by economic officers in US embassies around the world that assess receptivity to foreign investment in more than 170 countries including Kenya. The comprehensive statements are intended to help guide investment decisions by US companies.
Under the Kenya section, the US economic officers note a number of positive and negative appraisal.
“Kenya’s macroeconomic fundamentals remain among the strongest in Africa, with five to six per cent GDP growth over the past five years, six to eight per cent inflation, improving infrastructure, and strong consumer demand from a growing middle class,” the statement adds.
US businesses considering starting operations in Kenya are also assured that they will find a large pool of available workers, including highly-qualified professionals.
“Kenya has a positive investment climate that has made it attractive to international firms seeking a location for regional or pan-African operations,” the State Department declares at the outset of its review of Kenya's economic, political and security status.
However, that is the last positive appraisal about Kenya.
“endemic” corruption continues to slow down the flow of foreign capital into the countries's economy, despite Kenya’s effort to steadily enhance its attractiveness to international investors the US says
US Investors are warned that corruption remains deeply rooted in Kenya's society and economy.
“There are many reports that corruption often influences the outcomes of government tenders, and US firms have had limited success bidding on public procurements,” the statement points out.
While the assessment makes note of President Uhuru Kenyatta's campaign against corruption, the lack of any high-profile prosecution blights the country’s corruption record.
“Kenya’s anti-corruption agencies now appear to be coordinating more effectively. But no high-level officials were successfully prosecuted and convicted for corruption in 2018,” the statement points out.
US Potential investors are further cautioned against freely buying property in Kenya due to opaque property rights.
“The cumbersome and opaque process required to acquire land raises concerns about security of title, particularly given past abuses relating to the distribution and redistribution of public land,” the State Department observes.
Enforcement of intellectual property rights in Kenya is marred by corruption, the statement adds, pointing to failures to collect penalties from law violators and to impound imports of counterfeit goods.
“if property legally purchased remains unoccupied, the property ownership can revert to other occupiers, including squatters.”
Kenya's vulnerability to terrorist attacks is also cited.
“Security expenditures represent a substantial operating expense for businesses in Kenya,” says the investment climate statement.