Country Forecast Kenya July 2018

Country Forecast Kenya July 2018

  • July 2018 •
  • Report ID: 1697837 •
  • Format: PDF

Policy towards private enterprise and competition


2018-19: New company and insolvency acts are progressively implemented. Public-private partnerships become more commonplace, although the proposed privatisation of several state enterprises faces further delays.


2020-22: Regulatory reform advances more rapidly. Laws against anti-competitive practices and cartels become tighter.


Policy towards foreign investment


2018-19: The rollout of new special economic zones improves the investment environment. New hydrocarbons and mining laws provide a framework for investment in natural resources. Rules surrounding foreign land ownership are clarified.


2020-22: Regional integration and regulatory reforms boost Kenya's appeal to foreign investors, but challenges persist, including corruption, skills shortages and insecurity.


Foreign trade and exchange controls


2018-19: The Kenya shilling remains market-determined and fully convertible. Regional trade strengthens.


2020-22: East African Community (EAC) ties deepen but some obstacles remain, including non-tariff barriers. Work towards a common EAC currency advances, but full monetary union is not in prospect until 2024 at the earliest.


Taxes


2018-19: Budgetary pressures drive efforts to broaden the tax base, including the introduction of value-added tax (VAT) on fuel. Corporation tax is reformed, ending the distinction between resident and non-resident firms.


2020-22: Fiscal and regulatory reforms reduce the overall tax burden, but investors remain sensitive to shifts in tax rates.


Financing


2018-19: The government reconsiders the controversial cap on bank lending rates, leading to a repeal or amendment.


2020-22: Mergers gather pace in the banking sector, creating larger, stronger players with broader regional reach. Large corporates issue Eurobonds, after a debut sovereign bond in 2014 (and a second in 2018) set benchmarks.


The labour market


2018-19: The government acts cautiously over labour law reform because of concerns about hindering investment and job creation.


2020-22: Skills shortages become more pressing despite efforts to improve the education system.


Infrastructure


2018-19: Work intensifies on several key projects, including the extension of the new standard-gauge railway.


2020-22: Investment in oil-related infrastructure (such as pipelines) gathers pace, in advance of oil production in 2022.


Technological readiness


2018-19: The rollout of fourth-generation (4G) mobile connectivity gathers pace. The penetration of broadband internet increases, primarily on mobile platforms. Construction of the Konza high-tech city begins.


2020-22: Kenya retains its role as a digital innovator both in established fields, such as mobile money transfer, and in emerging technologies, such as cloud computing.



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