Kenya: ICT business opportunities for Investors

The Kenyan Government has put in place attractive incentives and infrastructures to encourage investment in the ICT sector in the country.

There are several investment bodies which have been set up to ensure that investing in Kenya is lucrative and rewarding both for local and foreign investors.One such body is the Kenya Investment Authority which ensures that investing in Kenya is rewarding . The government is also in the process of revamping the Export Processing Zone Authority (EPZA)  and the Export Processing Council (EPC)  to ensure that they remain  favourable and relevant  to the  ICT environment.


As a regional hub and a financial capital of the East and Central Africa region with a population of 13 million people, Kenya’s competitive advantage as an ICT investment destination is supported by various investor friendly factors which include the establishment of Communications Commission of Kenya (CCK) as the regulatory body providing investors with a one-stop body for registration and facilitation. The regulation of the ICT sector and granting of licenses remain the responsibility of CCK. Kenya being a member of regional bodies like COMESA and the EAC provides investors with potential market in the region.

The cost of internet connectivity is expected to come down marginally following the laying down of the East African Marine System (TEAMS) undersea fibre optic which is expected to be functional by next year.

The Kenyan government is also encouraging an E-Society and has already put in place ICT policies to implement E-governance, E-Commerce, E-Learning etc in its vision 2030 economic plan. Already over 1200 applicants have been short listed to undergo intensive entrepreneurial training on the management of digital villages meant to bridge the digital divide between urban and rural areas of the country.

Other Incentives which makes Kenya an attractive destination for ICT investors include a well-trained English speaking labour force with skilled personnel trained in ICT and related fields who are involved in virtually all areas of ICT in well-established ICT firms.

Kenya is also an active member of the International Telecommunications Union (ITU) and other international conventions and standards.

The Kenyan government guarantees investor friendly arrangements such as:
 
·         The Export Processing Zones (EPZ) program which offers attractive incentives to export -oriented investors
·         The Investment Promotion Centre (IPC) to promote all other investment in Kenya
·         the Tax Remission for Export Office (TREO), a program for intermittent imports for export production
·         Double taxation, bilateral investment trade agreements
·         The liberalization policy allowing for sector participation in the ICT sector
·         Reduced taxes on computer hardware software
·         Removal of licensing requirements on information and broadcasting services
 
There is also provision for investment insurance which provides potential investors with insurance for their investment in Kenya against a wide range of non-commercial risks.
 
Located on the East African coast and having the port of Mombasa, Kenya is strategically located for investors wanting to access the East and Central African market.
 
Kenya hosts a number of international organizations and foreign embassies which includes the headquarters of UNEP thus providing very good and up to standard living conditions

Kenya provides investment opportunities in the ICT sector targeting both local and export markets. Investors targeting export-oriented activities may invest under the Export Processing Zones program which offers attractive investment incentives including tax holidays, procedural and infrastructural incentives.
 
The following activities qualify for EPZ licensing:
·         Back office operations
·         Call centers
 
Kenya’s ICT Industry
·         Software development
·         Internet services
·         Software consultancy
·         Hardware assembly and repairs e.t.c.
 
Other investment opportunities in the ICT sector include:
·         Privatization of telecommunication providers such as Telkom Kenya Ltd
·         Financing of the East Africa submarine cable
·         Provision of ICT training for growing market
·         Provision of telecommunication to the rural areas not yet reached by the telecommunication network such as provision of internet facilities
·         Provision of fixed telephone services as the Second National Operator (SNO) – TKL monopoly expired in July 2004

By Ken Chelimo

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