NAIROBI, KENYA: Kenya will launch its international financial centre in the capital Nairobi later this year to attract large foreign financial firms and boost capital flows, its finance minister said on Wednesday.
The government of East Africa’s biggest economy has been working with Qatar since 2014 to build a financial centre in Nairobi that mirrors Doha’s international financial centre.
“The Nairobi international financial centre will be critical to attracting international capital into the Kenyan market,” Henry Rotich told a capital markets meeting.
The Kenyan financial centre is expected to compete with other established financial centres in the region like Mauritius.
Despite Kenya’s relatively developed capital markets, 75 percent of all business financing in the economy was from the banking sector, while the balance came from the capital markets, Rotich said, adding that the situation was not ideal.
“We should be funding our businesses through equity and bonds under the capital markets as opposed to the loans through the banking sector,” the minister said.
“I urge the capital markets to aggressively work on this aspect and tilt the share of capital assets in funding business requirements.”
Kenya required an investment level of 30 percent of gross domestic product (GDP) and a savings rate of over 25 percent of GDP to sustain growth of 10 percent a year, the minister said.
The Treasury expects growth to bounce back to 5.8 percent this year after drought, election uncertainties and a slowdown in private lending cut it to 4.9 percent last year.
