There are clearly many historical, political and emotional reasons why there are such strong ties between Kenya and UK. But there are many economic reasons too why investing in Kenya makes sense:
- Kenya continues to enjoy growth of 5.7% (2013);
- It has a fully liberalized economy, with free flow of trade, foreign private investment and ease of transferring money outside Kenya;
- An intelligent techno savvy workforce (responsible for some tech innovations such as mobile phone banking which have yet to reach UK), with a very high standard of spoken and written english (used for teaching in all schools from primary upwards);
- An emerging middle class;
- Recent commercially viable finds of hydrocarbons, as well as enormous renewable energy potential;
- And it’s location, transport links and relative security make it a natural hub for regional markets.
British Companies already in Kenya
Although China and other new partners have recently overtaken the UK in terms of new investment per year, Britain remains the largest cumulative investor and contributor to Kenyan prosperity. Because bilateral trade is so balanced, the UK remains Kenya’s largest trading partner with over £1.2bn of trade annually (2013).
- UK companies form the two largest private sector employers (Finlays and G4S);
- UK companies make up five of the top ten taxpayers (including Diageo and Safaricom-Vodafone);
- UK annually sends the largest number of tourists to Kenya;
- UK is the prime destination for further education.
As a result:
- 19 FTSE 100 companies have a presence in Kenya;
- Marks & Spencer alone buys products worth £100 Million per year from Kenya. Sainsbury’s, Waitrose, Tesco, &Asda source products of similarly significant amounts. This translates to thousands of jobs and significant income for Kenyans;
- UK companies form about 60% of the oil and gas operators in Kenya;
- UK companies are investing over £50M in geothermal, solar, biogas and wind projects within Kenya;
- UK exports rose by 14% from 2012 to 2013 (HMRC).
Challenges for doing business in Kenya
However challenges remain, including:
- Strong competition from the East especially on price
- Security threats
- Infrastructure limitations
- Cost of doing business e.g. tax rates, access to finance, practices of the informal sector
The UKTI team in Nairobi and the British Chamber can help provide further advice and information on these.