MAXIMIZING POTENTIAL
A range of incentives is on offer to attract investors

Flower exports, mostly to Europe, earn Kenya around $110 million annually

The Kenyan government sees the private sector as the engine of future growth, and a modernized and expanded infrastructure as central to its economic strategy. Major enterprises in its privatization program include Telkom Kenya, the Port of Mombasa, and Kenya Rail.

Priority sectors for investment in Kenya’s economy include agriculture, tourism, manufacturing, ICT, and energy. A range of incentives is on offer, such as investment allowance, duty remission, and tax exemptions in the country’s export processing zones, and the government guarantees repatriation of capital and profits. A one-stop shop facility is provided by the country’s Investment Promotion Center, which recently opened a liaison office at Jomo Kenyatta International Airport, Nairobi.

Kenya has liberalized exchange controls, removed price controls, freed the Kenyan shilling exchange rate to be market driven, abolished import licensing, and opened up its capital markets to foreign participation.
The country’s strategic position provides easy access to regional and world markets. There is a well-developed international and domestic air transport infrastructure, and the airports are well-placed to become regional transit points. The Port of Mombasa is the gateway to Eastern and Central Africa, and one of the most modern ports on the continent.

Kenya is the most industrialized of the East African countries, but agriculture is the mainstay of the economy, accounting for 30 percent of gross domestic product and more than 60 percent of export earnings. Tea and coffee are traditionally among the country’s leading foreign exchange earners, but horticulture products have become increasingly important.

Leading supermarket chain Uchumi has been modernizing and opening new stores

Kenya exports 46,000 tons of flowers annually, most of it to Europe. “Something like 60 percent goes to Holland because it is the hub of the flower industry,” says Erastus Mureithi, Chairman of both the Kenya Flower Council and Suera Flowers Ltd.

Flower exports are worth around $110 million, representing around 8 percent of the country's entire export earnings. The Kenya Flower Council works with the government to ensure that production complies with EU standards and international labor practices.

Suera Flowers, one of Kenya’s leading flower plantations, uses only non-hazardous chemicals in line with European regulations, and is at the forefront in establishing a cleaner environment through the development of wetlands. The company regularly wins awards at the International Flower Trade Show.
The supermarket chain Uchumi is 80 percent owned by the private sector, with the government retaining 20 percent through ICDC and Kenya Wine Agencies.

Despite facing increasing competition, Uchumi has maintained its dominance in the market. The company is currently halfway through a five-year strategic plan to increase its profitability and returns for shareholders.
“The critical thing is to make sure that the promises we make to shareholders are fulfilled,” says Managing Director Kennedy Thairu.

Uchumi has been extending its branch network and modernizing existing stores. The company is looking for opportunities throughout the East African region, and recently opened its first store in the Ugandan capital, Kampala.

Building up Uchumi’s own brands on products such as milk, bread, and rice is an important part of the strategy, which focuses strongly on the customer. The company is also modernizing its IT systems and enhancing the skills of its employees through training in key areas of customer service.
“The basic approach has been to concentrate on areas where we see opportunities to offer customers better value and thus achieve sustainable and profitable growth,” explains Mr. Thairu.