Sunday, October 19, 2008

Kenya makes bid to woo Chinese investors

Omondi, George; Business Daily (Nairobi) 2008-07-04

Kenya has stepped up campaigns to draw Chinese traders into investing in the country - a move which is aimed at correcting the unfavourable balance of trade between the two nations.

Data from the Ministry of Trade indicates that the deficit grew to Sh44.22 billion last year, increasing from only Sh3.68 billion ten years earlier. The attempt to market the East African country as the most favourable investment destination in the region is the subject of a two-day China-Africa Development Fund (Cadfund) workshop in Nairobi.

Trade Minister Uhuru Kenyatta has urged the Chinese delegation to consider investing in the Kenyan export processing zones (EPZs) where investors enjoy numerous tax incentives including a 10 year tax holiday.

"Even in the tourism sector, waiver of duties and VAT on investment, 100 percent investment allowance for new investments in tourist hotels, and 25 percent corporate tax for companies issuing initial public offers in the Nairobi stock exchange, are meant to spur growth in the sector and make it attractive for foreign investors", said Kenyatta during the opening of the workshop.

He said that the government has put in place a number of measures to protect foreign investors and their investments, including a green light to repatriate capital, repatriation and remittances of dividends and interest under the Foreign Investment Protection Act.

"Kenya is a member of the International Centre for the Settlement of the Investment Disputes (ICSID) and the World Bank-affiliated Multilateral Investment Guarantee Agency (MIGA), which issues non-commercial guarantees against non-commercial risks to enterprises which invest in signatory countries", Kenyatta said.

Cadfund was established as a result of the 2006 Beijing Summit on China-Africa cooperation, where Chinese President Hu Jintao promised to improve Sino-Africa ties.