Kenya has showcased 10 investment opportunities worth over US$ 5 billion that are immediately available in Kenya under a Public-Private Partnership (PPP) framework.
The opportunities have among them the Nairobi Smart Street Lights Project, Nairobi Bus Rapid Transport System, an Intelligent Traffic Management System Project and Galana Kulalu Food Security Project.
Others that have been mentioned to UK investors are the Lamu Fishing Port Project, Moi Teaching and Referral Hospital Training Complex Project, Mombasa Industrial Park, Meru Cancer Centre Project, Kenyatta National Hospital Project and the Lamu Port Project.
Investors from the United Kingdom (UK) have been invited to tap into emerging business opportunities in Kenya on the promise that the East African nation remains one of the most attractive investment destinations in Africa.
President Uhuru Kenyatta who is in the European country made the invitation during a business forum hosted by UK Foreign Secretary Dominic Raab and the Lord Mayor of the City of London William Russell at Mansion House, the Lord Mayor’s official residence.
Kenyatta said that already, discussions have commenced between Kenya’s National Treasury and Planning and the United Kingdom’s Export Finance (UKEF) to unlock financing for British companies pursuing PPP investments in Kenya.
Kenya’s ambition to deepen its cooperation with the Foreign Commonwealth Development Office (FCDO) is put in motion through a Memorandum of Understanding (MoU) to be formalized between the country’s National Treasury and the Private Sector Infrastructure Development Group (PIDG).
The cooperation with Foreign Commonwealth Development Office is for possible funding, through the Private Sector Infrastructure Development Group, of US$1.3 million to support early and transaction-stage PPP project development activities in Kenya, according to Kenyatta.
During the event, a cooperation pact was signed between the Nairobi International Financial Centre (NIFC) and TheCityUK, a London business lobby group. The partnership agreement will see the two entities collaborate in business and investment promotion.
Kenyatta added that the CityUK represents key financial and professional services firms in the UK and this partnership creates a framework for those institutions to deploy and share their expertise with their counterparts in Kenya and regionally. This is an important partnership, which my administration supports wholeheartedly.
NIFC, an initiative that was conceived when Kenyatta was the Minister for Finance, is a platform established to make it easier and more attractive to invest in Kenya.
The centre will prioritise attracting capital and investment into development projects.
It will also focus on attracting green finance for sustainable economic development and investments into fintech and new areas of innovation by leveraging Kenya’s vibrant fintech ecosystem.
The President said NIFC is tailored to support global financial and professional services firms that want to establish their regional headquarters in Africa to efficiently and conveniently set base in Nairobi.
Kenya’s economy is projected to rebound strongly from the slowdown occasioned by Covid-19, with an estimated economic growth of over 7 per cent.
The president said that Kenya stands out as one of the most pro-business in Africa, with the World Bank Ease of Doing Business, currently ranking Kenya the fourth in Africa and fifty-sixth globally.
To attract investors, Kenya continues to pursue initiatives aimed at lowering the cost of doing business. There are significant investments made to improve the quality of infrastructure. Kenya’s infrastructure is ranked amongst the best in sub-Saharan Africa.
To address climate change challenges, the country is developing a framework to encourage the growth of green finance, including having developed a comprehensive framework for the issuance of Green Bonds.
During the event, Foreign Secretary Raab announced KShs 20 billion of new UK Government and private investment into government projects including affordable housing and manufacturing.
Raab announced that KShs 5.2 billion of UK Aid to be matched by Shs 3.5 billion of private investment to finance 10,000 green affordable homes in Kenya.
According to Raab, these new homes will be energy and water-efficient properties for low and middle-income families and will contribute to Kenya’s goal of building 500,000 new affordable homes by 2022.
With Kenya urbanizing at a rate higher than the continent’s average, the country is under pressure to make basic shelter and social amenities accessible to the majority poor.
Housing affordability continues to be a key challenge in the country given the current high cost of funding and unavailability of financing, amid rising property prices. The British funding is a welcome injection into the country’s struggling affordable housing sector.
According to the Kenya National Bureau of Statistics, 74.5 per cent of the Kenyan population earn KSh49, 999 (US$487) a month or below in the formal sector.
This means that an affordable housing unit would need to have a monthly rental price of KSh15, 000 (US$146) and below, assuming a maximum of 30 per cent of household gross income is spent on housing, according to Shelter Afrique Chief Executive Officer Andrew Chimphondah.
Speaking at an earlier event on housing elsewhere, Chimphondah said that Shelter Afrique is encouraged by the formation of the Kenya Mortgage Refinance Company (KRMC), which will provide long term lending to commercial banks, microfinance banks and Saccos to allow them to extend mortgage loans to eligible mwananchi over a longer period and at a lower cost.
“That is important because it enhances affordability and boosts the uptake of housing thus Shelter Afrique’s decision to invest US$2m in KRMC to stimulate the demand for affordable housing,” he said.
Buoyed by significant government investment in the 2021-22 national budget, combined with attractive incentives for private developers, the affordable housing sector in Kenya is well set to provide attractive opportunities to investors.
According to Vivian Ombwayo, Director of Research and Valuation at Broll Kenya, the demand base of low- to middle-income earners, which accounts for more than half of the economically active urban population, lends a real impetus to the demand for affordable housing. For example, an online affordable housing platform developed by the government, known as Boma Yangu, has clocked up over 320,000 subscribers to date.
She adds that the lion’s share of affordable housing is being taken up by government projects mainly driven by the availability of land. Land cost is a very important aspect when it comes to affordable housing, coupled with innovative ways of minimising overall projects costs, such as alternative building technologies.
Ombwayo decries that the private sector is yet to catch up but there has been a lot of traction in recent years, especially as the private sector attempts the tricky balance of cost versus the final price of a unit.