DONGO KUNDU SPECIAL ECONOMIC ZONES PROMOTIONAL TOUR

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1 DONGO KUNDU SPECIAL ECONOMIC ZONES PROMOTIONAL TOUR Dr. Moses Ikiara, PhD, MBS Managing Director Kenya Investment Authority Overall Message: Kenya is ready and open for business; many investment opportunities across all sectors and the 47 Counties; strong and growing market in EAC, COMESA & SADC; strong business fundamentals and climate; exceptional human capacity; excellent place to live & work.

2 PRESENTATION OUTLINE 1. Kenya at a Glance 2. Kenya- Japan Trade Statistics 3. Japanese companies in Kenya 4. Overview of Investment Opportunities in Kenya 5. Why Invest in Kenya Now? 6. Guide To Investing in Kenya 7. Useful Contacts

3 Population 43.5 million with population growth rate of 2.67 percent KENYA AT A GLANCE... GDP at current US$ US$ 58.1 billion Political System Devolved State with Multiparty Democracy Credit Rating (Stable) S&P B+ Moody B1 Fitch B+ Area 582,646 km2 GDP per capita US$ 1,418 Currency KES 97 : US$ 1 (June 2015) 7 th Most Attractive place to do business among emerging markets (Fortune Magazine, 2015) FDI Growth Rate: 98% in 2013 & 92.4% in 2014 (UNCTAD) Languages Swahili and English are official languages. Climate Kenya lies on both sides of the equator and enjoys a varied climate ranging from tropical to temperate 3

VISION 2030 BLUE PRINT Kenya Vision 2030 is the country s new development blueprint covering the period 2008-2030.

4 VISION 2030 BLUE PRINT Kenya Vision 2030 is the country s new development blueprint covering the period It aims to transform Kenya into a newly industrializing, middleincome country providing a high quality life to all its citizens by the year Aimed at increasing real GDP growth to 10% per annum; raise all Kenyans above poverty line & ensure per capita income of $3,000. The economic pillar focuses on six priority sectors: - Tourism; - Agriculture, Livestock & Fisheries; - Trade; - Manufacturing; - BPOs/ITES; - Oil & Minerals is the framework for the country s long term economic, political and social stability

5 KENYA- JAPAN TRADE STATISTICS YEAR EXPORTS to Japan in KSH IMPORTS from Japan in KSH BALANCE OF TRADE ,227,980,463 48,852,917,697-46,624,937, ,090,909,210 58,271,987,555-56,181,078, ,315,148,051 56,593,431,766-54,278,283, ,456,501,438 63,134,830,564-60,678,329, ,711,068,165 83,720,489,316-81,009,421,151 AVERAGE VALUES 1,972,263,277 44,273,509,461-42,301,246,184 Kenya s main exports to Japan: The share of exports to Japan in Kenya s total exports still remain lower than 1%. Main exports include cut flowers,tea,coffee,edible nuts,fishfillets,tobacco and sisal fibers. Kenya s imports from Japan: The share of Imports from Japan in Kenya's total imports was about 4.6% in The imports are mainly capital goods which comprise: Motor Vehicles and Parts, heavy machinery & construction equipment, electrical equipment's & electronics.

6 OVERVIEW OF INVESTMENT OPPORTUNITIES IN KENYA Investment opportunities in Kenya are many across all sectors and the 47 Counties. The opportunities range in size from mega to small. There is something for everyone and the returns are highly competitive.

OVERVIEW OF INVESTMENT OPPORTUNITIES-1 AGRICULTURE, LIVESTOCK & FISHERIES Objective: Innovative, Commercially Oriented and Modern Farming Livestock and Fisheries Sector Emphasis is placed on

Accounts for 65% of Kenya s total exports, 18% & 60% of the formal and total employment respectively.

LAPSSET Corridor TOURISM To be a top 10 long haul tourist destination offering a high-end, diverse, and distinctive visitor experience Sector vital for the Kenyan economy.

7 OVERVIEW OF INVESTMENT OPPORTUNITIES-1 AGRICULTURE, LIVESTOCK & FISHERIES Objective: Innovative, Commercially Oriented and Modern Farming Livestock and Fisheries Sector Emphasis is placed on increasing productivity at the same time expanding processing activities. Contributes to 27% of the GDP, about 75% of industrial raw materials and 60% of export earnings. Accounts for 65% of Kenya s total exports, 18% & 60% of the formal and total employment respectively. Opportunities 1 million acre Galana/Kulalu irrigation project Tana Delta Irrigation Sugar Project Joint Venture Project Promoter: TARDA Fish Port Development Project: PPP CDA Agricultural Devt along LAPSSET Corridor TOURISM To be a top 10 long haul tourist destination offering a high-end, diverse, and distinctive visitor experience Sector vital for the Kenyan economy. Target of at least 3 million international tourists p.a. against current level of million. Based on: abundant wildlife, over 500 km long all-year warm sandy coastal beaches, a rich and diverse cultural heritage & a robust and thriving business hub that attracts most of regional and international business travelers. Opportunities: Development of Lamu, Isiolo and Lake Turkana Resort Cities PPP Promoter: MEACT Mombasa International Convention Centre (MICC) PPP Promoter: TFC Amusement Park Bomas of Kenya PPP Accommodation and other services

OVERVIEW OF INVESTMENT OPPORTUNITIES-2 INFRASTRUCTURE Kenya Government has laid down ambitious plans to construct a total of over 10,000 km of tarmacked roads across the country in the next 3 years.

Other Key Projects: Construction of 2 nd Runway at Jomo Kenyatta International Airport Construction of Greenfield Terminal at Jomo Kenyatta International Airport Construction of Isiolo Airport

Container Terminal PPP Multi-Storey Terminal at Likoni - PPP BUILDING & CONSTRUCTION Kenya requires a minimum of 150,000 housing units per annum to meet demand.

8 OVERVIEW OF INVESTMENT OPPORTUNITIES-2 INFRASTRUCTURE Kenya Government has laid down ambitious plans to construct a total of over 10,000 km of tarmacked roads across the country in the next 3 years. This will cost over USD 90 Million. Other Key Projects: Construction of 2 nd Runway at Jomo Kenyatta International Airport Construction of Greenfield Terminal at Jomo Kenyatta International Airport Construction of Isiolo Airport Development of Lamu Port Mombasa-Nairobi Standard Gauge Railway Nairobi Commuter Rail Concession Railway Cities Joint Venture Nbi, Msa, Ksm Thika Toll Road Concession Dry Port at Voi PPP Mombasa 2 nd Container Terminal PPP Multi-Storey Terminal at Likoni - PPP BUILDING & CONSTRUCTION Kenya requires a minimum of 150,000 housing units per annum to meet demand. Kenya has a well-developed building and construction industry with quality engineering, building and architectural design services being readily available. Returns to investment in real estate are very high in Nairobi and Mombasa. Key ongoing and planned Projects: Many large private integrated development projects around the country 39 Storey Hazina Trade Centre Proposed Kilifi Resort City Konza Techno City (5,000 acres), Machakos/Makueni Proposed Resort Cities Development of Lamu Port Kenyatta University Hostels Mombasa City Convention Centre (MICC)

9 LAPSSET CORRIDOR PROJECT: Profile: PROJECT COMPONENTS 1 Lamu Port 2 Railway Line 3 Highway 4 Crude Oil Pipeline Product Pipeline 5 Oil Refinery 6 Resort Cities 7 Airports SUPPORT INFRASTRUCTURE High Grand Falls --- Lamu Metropolis 9

OVERVIEW OF INVESTMENT OPPORTUNITIES- 3 ICT Konza City Technopolis Joint Venture; Promoter: Konza Technopolis Dev t Authority 5,000 Acres of land, 60Kms South of Nairobi.

s investment needs. Financial services are critical for achievement of the 10% annual economic growth rate target.

10 OVERVIEW OF INVESTMENT OPPORTUNITIES- 3 ICT Konza City Technopolis Joint Venture; Promoter: Konza Technopolis Dev t Authority 5,000 Acres of land, 60Kms South of Nairobi. Aims to blend a BPO Off-Shoring together with a residential area and a modern CBD FINANCIAL SERVICES A vibrant and globally competitive financial sector driving high level of savings to finance Kenya s investment needs. Financial services are critical for achievement of the 10% annual economic growth rate target. Consists of banking, capital markets, insurance, retirement benefits, development finance & financial co-operatives (SACCOs) sub-sectors. OIL & MINERALS The Oil & Other Mineral Resources sector has been identified as an additional priority sector. Currently accounts for only 1% of GDP & 3% of total export earnings. Recent oil and mineral finds: About 8 oil and 2 gas discoveries; great mining potential (titanium, coal, iron ore, gold, niobium, rare earths).

Energy in 40 Months from various sources: Geothermal, Wind, Coal (4

11 OVERVIEW OF INVESTMENT OPPORTUNITIES- 4 Energy Sector Current power generation: 2,250 MW Target: Generation of additional 5,000+MW of Energy in 40 Months from various sources: Geothermal, Wind, Coal (4 plants), LNG, Other sources Plans for nuclear power generation underway

Strategic geographic location: It makes the country ideal for strategic partnerships. Wide Market Access: Membership to regional economic blocks of EAC & COMESA regional markets.

12 Political Stability & Favorable Investment Policy: Vision 2030; new constitution; new government. Strong and Steady Economic Growth Rate. East & Central Africa s Largest Economy: 4 th largest in SSA; strong growth prospects; fastest growing middle class. Strategic geographic location: It makes the country ideal for strategic partnerships. Wide Market Access: Membership to regional economic blocks of EAC & COMESA regional markets. FTA between EAC, COMESA & SADC (market of 600 million) has been agreed upon. Low Risk Investment Environment: Fortune Magazine ranked Kenya 7 th most attractive places to do business among emerging markets! Best infrastructure in the region and still improving: Through large projects Konza, LAPPSET, SGR, JKIA Expansion, Ports. Kenya Gov t Focused to further improve the investment climate: Cabinet Committee; A Business Environment Delivery Unit (BEDU) has been constituted; Establishment of OSC for investors; National Investment Policy Large Pool of Labor Force: Pool of highly educated, skilled & sought after in Africa. Well Established Private Sector: Key players in voicing Private Sector concerns include KEPSA, KNCC&I, FKE, KAM, UBA. Large presence of multinationals increasingly choosing Kenya as their African Headquarters. Numerous investment opportunities across all sectors and the 47 devolved government units (counties).

13 WHY KENYA NOW? -2 POSITIVE & STEADY ECONOMIC GROWTH Strong returns to investment in many sectors. Economy is diversified and growing strongly; mainly supported by the following sectors: Construction; Finance and Insurance; Wholesale and Retail Trade; Information and Communication; & Agriculture and Forestry. International Monetary Fund (IMF) economic forecast for 2015: 6.5%. Kenya Vision 2030 growth target: at least 10%. Track record of macroeconomic stability.

INCENTIVES FOR INVESTMENT Capital goods and raw materials are zero-rated.

Some of the plant, machinery and equipment are exempt from VAT.

Export Processing Zones(EPZ) scheme: - 10 year tax holiday - 25% corporate tax for

Exemption for withholding tax Incentives for listing in the Capital Market - Issuance

14 INCENTIVES FOR INVESTMENT Capital goods and raw materials are zero-rated. Plant, Machinery and equipment are duty exempt. Some of the plant, machinery and equipment are exempt from VAT. Market access in COMESA and EAC markets with no taxes. Export Processing Zones(EPZ) scheme: - 10 year tax holiday - 25% corporate tax for another 10years - Duty & VAT exemption - Single license - Exemption from stamp duty - Exemption for withholding tax Incentives for listing in the Capital Market - Issuance of at least 40% of share capital- 20% tax for 5 years - Issuance of at least 30% of share capital of share- 25% take rate for 5 years - Issuance of at least 20% of share capital- 27% tax rate for 3 years.

GUARANTEES TO INVESTORS Kenya Constitution guarantees against expropriation of private property except for purposes of public use or security No exchange

Member of the Multi-lateral Investment Guarantee Agency (MIGA), an affiliate of the World Bank that insures foreign investments against non-commercial risks

15 GUARANTEES TO INVESTORS Kenya Constitution guarantees against expropriation of private property except for purposes of public use or security No exchange controls guarantees repatriation of capital, profits and interests. Member of the Multi-lateral Investment Guarantee Agency (MIGA), an affiliate of the World Bank that insures foreign investments against non-commercial risks Member of the International Centre for Settlement of Investment Disputes (ICSID) Member of the Africa Trade Insurance Agency (ATIA) Most importantly, Kenya Government has not confiscated or nationalized private property since independence in 1963.

16 Support from KenInvest Policy Advocacy After Care Services Investment Promotion ONE STOP CENTER FOR INVESTORS Investor Tracking Investment Facilitation

GUIDE TO INVESTING IN KENYA 1. Visit www.investmentkenya.com and fill in the Investment Application Form; 2. Register your business at the Registrar of Companies; 3.

ke Register with the National Social Security Fund (NSSF) Register with the National Hospital Insurance Fund (NHIF) Acquire a Single Business Permit from the relevant Local Authority 4.

17 GUIDE TO INVESTING IN KENYA 1. Visit and fill in the Investment Application Form; 2. Register your business at the Registrar of Companies; 3. Apply for Statutory Requirements: Tax PIN /VAT Registration visit: Register with the National Social Security Fund (NSSF) Register with the National Hospital Insurance Fund (NHIF) Acquire a Single Business Permit from the relevant Local Authority 4. Submit Application Form with copies of Certificate of Incorporation, Registration or Certificate of Compliance and Memorandum & Articles of Association to KenInvest; 5. Issuance of The Investment Certificate from KenInvest upon conforming to Health, Environment and Security requirements; 6. Once a company begins operation KenInvest undertakes tracking services to ensure smooth project implementation; and 7. KenInvest also undertakes After-Care Services to address investor concerns

18 SOME OF THE MULTINATIONALS IN KENYA

USEFUL CONTACTS Ministry of Industrialization & Enterprise Development www.industrialization.go.

ke Ministry of Foreign Affairs And International Trade Website: www.mfa.go.

com Kenyatta International Convention Centre (KICC) Website: www.kicc.co.ke Kenya Tourism Board Website: www.

19 USEFUL CONTACTS Ministry of Industrialization & Enterprise Development Ministry of the East African Affairs, Commerce and Tourism Ministry of Foreign Affairs And International Trade Website: Kenya Investment Authority Website: Kenyatta International Convention Centre (KICC) Website: Kenya Tourism Board Website: Vision 2030 Delivery Secretariat Website: Export Promotion Council (EPC) Website: Brand Kenya Board Website: Tourism Fund Website: Bomas Of Kenya Limited Website:

PROMOTING JAPANESE INVESTMENTS TO KENYA

PROMOTING JAPANESE INVESTMENTS TO KENYA Presentation at UNIDO TICAD V Side Event: Investment and Technology Promotion in Africa: Case Studies Dr. Moses Ikiara, PhD, MBS Managing Director Kenya Investment