Country Forecast Kenya November 2017

Country Forecast Kenya November 2017

  • November 2017 •
  • Report ID: 2558062 •
  • 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 boosts Kenya's investment appeal, but challenges such as corruption and insecurity persist. Regulatory reforms boost Kenya's appeal to foreign investors.


Foreign trade and exchange controls


2018-19: The Kenya shilling remains market-determined and fully convertible. Regional trade strengthens within the East African Community (EAC), but divisions about a new EU-EAC Economic Partnership Agreement cause friction.


2020-22: 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: Ongoing tax reforms have mixed implications; streamlining taxes reduces the administrative burden, but stricter compliance measures and probable new taxes impose extra costs. Rules on taxes imposed by counties are tightened.


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. Capital-market reforms boost fundraising on the Nairobi Securities Exchange, via new listings and corporate bonds.


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 set an initial benchmark.


The labour market


2018-19: The government starts to reform labour laws, tightening rules in some cases, but moves cautiously for fear of deterring investment and hindering 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, a new port at Lamu, and power stations. Hurdles such as contract and tender disputes, as well as the challenge of raising finance, cause some delays.


2020-22: New road and rail connections boost logistics capacity and cut costs, although bottlenecks persist. Investment in oil-related infrastructure (such as pipelines) gathers pace, in advance of possible full-scale oil production in 2022.



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