By Dr Moses Ikiara
Kenya: A recent article in The Standard newspaper dated 29th October 2013, County investor forums don’t make sense, by Dr XN Iraki caught our attention at the Kenya Investment Authority. The article carried interesting observations and we would like to contribute to the discourse.
As the County Governments settle down to serious business, the competition for investments has begun in earnest! This is evident from the increasing number of County investor forums already conducted, starting with Machakos, Marsabit, Embu, and recently Kajiado. Several others are in the pipeline.
Awareness
The key message has been– “We are the best! Come invest in our County! This demonstrates that most of the governments are aware about the critical role of investment in growing their local economies.
As the other Counties line up to show case their worth in terms of investability, it’s important to ponder over whether these investor conferences are necessary and the value they add.
The Constitution of Kenya 2010 provides for at least 15% allocation of the national budget to the county governments. Indeed, there has been a huge debate around optimal level of allocations to the county governments.
However, even if the allocations were to be increased to much higher levels, the reality is that the resources would not be adequate. Private investments are required to complement the available public funding.
There are various strategies open to the County governments to promote investment. One of the strategies that has been widely used by a majority of countries world over is investment conferences.
They have been used to reach potential investors and, when properly planned and executed, the results have been quite rewarding.
It is worth noting that one of the best ways to conduct these forums is to complement them with business to business (B2B) meetings, exhibitions and targeted policy dialogue sessions. With these components, it is possible to achieve the twin goals of attracting investments while also addressing pertinent issues pertaining to investment climate at the same time.
Feedback by investors from previous forums, have indicated that government’s presence in such forums enhances investor confidence in the country, and this will be true for the Counties.
Incentives
Further, the investment forums present a wonderful opportunity for debate on the County Governments’ strategy to address investment climate challenges.
The need to improve the county investability by, among other things, setting aside land banks for investment, improving on land transactions, construction and maintenance of roads, access to cheap and reliable energy, design of attractive administrative incentives, and streamlining local licensing regimes are crucial issues for such debate.
Moreover, the counties need to devise mechanisms of following up on pledged investments during the investment forums and ensure that the potential investors receive the right information and facilitation in order for them to translate the pledges into actual investments.
Challenges
Crucially important also is the manner in which county governments treat domestic investors and existing foreign investors. If these are subjected to frequent policy and regulatory challenges, lack of clarity and transparency in licensing and other procedures, threats from industrial action by employees, and unethical behavior, new investors will know and they will choose to stay away.
In conclusion, at the Kenya Investment Authority (KenInvest), we are available to offer technical support to all the 47 county governments in their investment promotion and facilitation activities, including on how to develop an investment master plan for the county, identify and package investment opportunities and bankable projects, and how to organize effective investment forums and rigorous consultations to identify potential impact investors for targeting.
It is our view that county investor forums have a key role in attracting investments. However, County governments need to work hard to make them more effective. They should be properly planned, target the right audience, be professionally executed and have clear follow-up mechanisms.
The writer is Managing Director, Kenya Investment Authority (KenInvest)
