China’s top council hails Kenya’s ease of doing business

 

Prime Cabinet Secretary Musalia Mudavadi toasts with Chinese Ambassador to Kenya Zhou Pingjian 

A top Chinese council on Africa affairs has applauded Kenya’s ease of doing business, detailing the gains of the changing business environment.

The China Africa Business Council in its 2024 report on Chinese Investments in Africa has hailed steps by President William Ruto administration to facilitate trade.

It cited preferential access to national bank credit, easy access to industrial land, and faster processing of work permits for expatriates as some of the lead incentives.

“Fiscal measures and investment incentives are key, with Kenya, Uganda and Tanzania leading the way in reforms. Kenya stands out for its support for startups and its business facilitation initiatives,” the report reads.

Beijing is set to host African leaders from September 4 to September 6 for the 2024 summit of the Forum on China-Africa Cooperation where the issues will be advanced.

The theme of this year’s fete which President Ruto is expected to attend is on “jointly advancing modernisation and building a high-level China-Africa community with a shared future”.

As part of the tradition, the business council issues a report analysing investments in Africa where China is moving to assert its influence through ventures under the Belt and Road Initiative.

CABC cited among others incentives such as the Presidential Transformation Program “KenNIP” to facilitate business establishment.

China has also hailed the revised Investment Code and the adoption of the Startup Bill in 2023 to support innovation and new businesses as having helped the business environment.

The China’s top council also took note of the code of conduct for civil servants in 2021, saying it went a long way to promoting integrity in the public sector.

“In addition, a strategy for government services digitization, initiated in June 2024, aims to reduce administrative processing time and increase public services efficiency and transparency,” CABC said.

The Asian powerhouse adds that the industrial parks and industrial special economic zones to attract investment are coming in handy.

In Kenya, it cited zones such as the KEPZ in Athi River and the Mombasa and Lamu zones which are focusing on industrialisation, as crucial.

The council also cited the Nairobi Aerotropolis project which aims to create a major economic hub around a new airport

“These parks, supported by comprehensive infrastructure including electricity, industrial water, roads and waste management, are boosting manufacturing,” the council said.

Investors have also hailed the tax reforms of April 2023, which led to a reduction of taxes for SMEs.

The reduced rate of 15 per cent in key sectors such as ICT and construction, as well as exemptions of up to 10 years in SEZs, has also been cited in the report unveiled August 23.

“Beyond taxation, various other incentives such as subsidies, subsidized loans and land facilities to attract investments are used,” CABC noted.

Among projects Kenya will showcase at the Beijing fete include the Standard Gauge Railway, the Nairobi Expressway, and agricultural research initiatives, among other Chinese interventions.

“The Standard Gauge Railway has reduced Kenya’s logistics and transport costs by more than 40 percent, greatly boosting the local economy,” the council said.

The expressway is the first high-grade highway built in Kenya using the public-private partnership mode and also the first expressway in East Africa.

“The Nairobi Expressway has significantly reduced traffic congestion in Nairobi, lowered logistical costs and boosted economic development. It has also attracted more international investment to Kenya and helping it become an economic, transport, diplomatic and tourism hub in the East African region,” the council said.

For 20 years China has supported food security research at the Kenya-China Belt and Road joint laboratory for crop molecular biology based in Egerton University’s Confucius Institute and at the Sino-Africa Joint Research Center (SAJOREC) at Jomo Kenyatta University of Agriculture and Technology.

“Breakthroughs in these projects, especially on the hardy food crops which have supported Kenya and the savannah region of the continent for millennia, could increase food production,” the council said.

Kenya's avocado, which have incentives for accessing China’s market, is part of the Sh30 trillion trade between China and Africa.

On energy, China took the lead in the Ethiopia-Kenya DC Power transmission project, implemented under the general contract of China Electric Power Equipment and Technology Co. Ltd.

The project is known as the Eastern Electricity Highway Project and is the first transnational DC interconnection project in East Africa.

“As a result, Ethiopia has been able to export surplus hydropower, and the tension in Kenya’s domestic power supply has also been effectively alleviated. The project has become a successful example of interconnecting transnational power grids for mutual benefit,” the China Africa Business Council said.

It noted that Kenya, the DRC, South Africa, Ethiopia and Nigeria have consistently been the focus of Chinese investment in Africa over the past few years.

Chinese investment in different Africa countries is also related to the political and economic relations between each country and China.

by MOSES ODHIAMBO