The secrets behind investing in Kenya
“Before expanding into Kenya, we took account of factors such as political stability, infrastructure, competition, payroll agreements, consumer demand and saturation, macro-economic factors, and regulation and legislation,” Blue Financial Services legal director Wessel Smit told delegates.
“The application for a business licence was an uncomplicated and expedient process, and with the help of local auditors and company secretaries, the company was incorporated in a short period of time at acceptable costs,” Smit added.
Blue opened its Kenyan doors in October 2007, but its branches were forced to close temporarily due to post-elections violence that claimed the lives of more than 1000 people. Nevertheless, the company carried on after peace returned, and is now believed to be doing well, having made a huge breakthrough in Africa's untapped and non-existent market of microfinance.
Smit said: “We remained convinced that Kenya is a great country to do business in. Obviously, there are challenges, as in every country.”
Africa is well-known not only for its violation of human rights record, bad governance, economic mismanagement and armed conflicts, but also for the dilapidated state of its infrastructure which scares investors away. But Smit said Kenya's infrastructure is sound and its service delivery meets international standards.
Blue CEO Dave van Niekerk echoed Wessel's sentiments, saying: “IT infrastructure and connectivity is better compared to other African countries and the country has a great education system with includes well-educated people and a well-skilled workforce.” But he advised potential investors to do their homework before going there. “You have got to adapt and to be sensitive to local needs.
“Be consistent with your brand and adjust your product. There is no difference between SA and Africa in terms of aspirations and expectations because people want only better services. Kenya is a better place to do business and a hub for East Africa, not everything is perfect but things are improving and heading for the right direction.”
But the main challenge of Kenya remains corruption, which some observers said is deeply entrenched in many Kenyans' blood like a virus. However, both Kenya High Commissioner to SA Tom Amolo and Rogers Amisi of the Kenya Investment Authority have reassured potential investors and the international community that the government is doing whatever it can to eradicate the problem.
Amisi said: “Kenya has been bedevilled by corruption for the past 40 years, so it becomes difficult to live without it but we are working on it. More people are being arrested and taken to court. In the past, one needed at least 37 licences to open a business in Kenya, but our investigations found that only one was useful and the rest was an avenue for corruption. We deleted them all and left only with one.”
Amolo also admitted that corruption was killing Kenya. “We must confess that we have a serious problem, which is corruption,” he said. “But there is no perfect society or a perfect class. I am an eternal optimist. Kenyans are looking to the future. Our government is creating an enabling environment for business to work in and make money.
“We are a fully liberalised economy and the opportunities are immense. There is no restriction on repatriation of capital and no restriction on foreign exchange. But please make corporate social investment part of your plans if you want to invest in Kenya.”
Asked for comment, Teboho Khumalo, a delegate from Glowing Autumn Trading, said: “It was a very informative conference. I have definitely learned a lot about Kenya, which gave me a better understanding of their long-term strategic goals. I appreciated the Kenya Investment Authority's balanced presentation in revealing the country's good offers and challenges.”
Craig McCann, director for special projects at Eason Electronics, said from now on Kenya will be listed among his company's priorities. “I was very impressed by the ambassador's honesty in painting Kenya's picture and by the Kenya Investment's advice to adapt your product to local markets.”
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