Agriculture

Agriculture is the mainstay of the economy, providing livelihood to approximately 75 per cent of the population.  There is considerable scope for diversification and expansion in the agricultural sector through accelerated food crop production and increase of non-traditional exports.  There are also opportunities for improvement in technological infrastructure such as packaging, storage, and transportation. Intensified irrigation and additional value added processing are marketable areas for investments.

Investment opportunities also exist in seed production, manufacture of sprayers and pesticides, veterinary services, construction of dams and bore holes, installation of irrigation systems and services. Opportunities also exist in support services, such as cold storage facilities and refrigerated transport for horticultural and other perishable products.

 Horticulture

The horticultural sector is one of the fastest growing sectors in the economy and is the second largest foreign exchange earner after tea. Opportunities exist in production and export of products such as cut-flowers, French beans, pineapples, mushrooms, asparagus, mangoes, macadamia nuts, avocados, passion fruits, melons, and carrots.

Agro-Processing

Numerous investment opportunities exist in this sector. Edible and other oils produced locally include butter, ghee and margarine as well as sunflower, rapeseed, cottonseed, sesame, coconut and corn oils, while a large quantity of palm oil is imported. Investments to develop substitutes for palm oil imports are welcome.

Kenya produces excellent beer, utilizing locally grown barley. The country has recently developed papaya and grape wines that can be exported to regional and international markets. Opportunities exist in coffee roasting and grinding, with a further potential such as in the production of decaffeinated coffee for export.

Sugar production, at 402,000 tonnes per annum is below the domestic demand estimated at 600,000 tonnes per annum. Molasses, a by-product of sugar production, is processed into power alcohol, potable alcohol, and baker’s yeast. There is also considerable potential for the expansion of chocolate and confectionery products for export. Opportunities for investment exist in the production and processing of sugar, tea, meat and dairy products.

Poultry Products

Hatcheries for the production of chicken for both domestic and regional consumption are under-exploited.

Fisheries

Kenya’s water resources in the Indian Ocean, Lake Victoria and other numerous fresh water lakes provide vast fishing potential. At present, deep sea fishing, prawn and trout farming are in their infancy but growing rapidly. Opportunities also exist in fish processing (filleting and fishmeal production), as well as fisheries-support infrastructure (refrigerated transport, cold storage, etc.).

Leather and Leather Goods

Most hides and skins are processed up to the wet blue stage for export while investment opportunities exist in production of finished leather, offering potential for the manufacture of shoes and other leather products.  

Livestock

Investment opportunities exist in the rearing of livestock for meat and dairy products. The dairy industry has been liberalised, providing new investment opportunities in milk processing for local and regional markets. Non conventional livestock farming, for example, of ostrich and crocodile farming, represent an exciting new area of investment. Bee keeping and honey processing are untapped potential in Kenya.

Energy:

Introduction

Kenya’s energy policy emphasizes the need for sustainable energy supplies in adequate quantities at effective costs, so as to achieve national development goals. The policy also emphasizes delivery of quality energy services so as to ensure that Kenya will continue to attract investments in those economic activities of which energy inputs are basic to production at competitive prices. The country is dependent mainly on three forms of energy namely: wood-fuel, petroleum and electricity. To a lesser extent wind, solar and biogas are used as alternative energy sources.

Petroleum is the major source of commercial energy in the country providing about 87% of the country’s requirements. The transport sector consumes more than half of the petroleum fuels used in the country. Industry consumes some 31% of petroleum fuels. Kenya struck oil after decades of exploration in various parts of the country. The Briitish Firm, Tullow Oil Inc. struck oil at the Ngamia 1 block in Turkana County in March 2012. Although the commercial viability of the find is yet to be known, such a discovery would offer immense investment opportunity for more exploration in the vast region.

Geothermal energy is generated using natural steam tapped from volcano-active zones in Kenya’s Rift Valley. It is estimated that Kenya can produce over 10,000 MW of geothermal energy. However, currently about 127 MW is fed into the national grid from three (3) power plants at Ol Karia. The Government of Kenya proposes to extensively invest in construction of more geothermal power plants including a 280 MW plant, extension of Ol Karia (I) power plant by constructing two 70 MW units and construction of a new power station of two 70 MW plants at Ol Karia (IV) site. 

As a considerable amount of power also comes from thermal sources, mainly power stations in Mombasa and Nairobi, numerous opportunities exist for private producers of thermal energy.

Although Kenya has diverse sources of electricity, the bulk consumed comes from hydro-power and geothermal generation. Hydro-power accounts for nearly 60% of the electricity generated, mainly from 5 plants on the River Tana basin-Kindaruma, Kamburu, Gitaru, Masinga and Kiambere, with an installed capacity of estimated 400 MW. The Turkwel Gorge power station in Northwestern Kenya produces 106 MW while the  completion of Sondu-Miriu project in 2007 added about 60.0 million kilowatt hours (KWH) to the national grid system. Other small hydro-power stations have a combined generation output of 40 MW.

Other investment opportunities in the energy sector include: construction of wind power plants at Ngong, Lake Turkana, Marsabit, Kinangop and Malindi. Following a feasibility study by the Ministry of Energy and Mineral Resources, the Embassy recommends investments in this area of green energy. Kenya’s geographical location across the Equator gives the country a unique opportunity for a vibrant solar energy market. The country receives 4-6 KWh per square meter of solar energy daily. However, only an insignificant amount of this vast solar resource is harnessed.

Investment opportunities in Manufacturing:

Overview

Manufacturing sector is an area where investment opportunities exist. Initially developed under the import substitution policy, there has now been a shift to export oriented manufacturing as the thrust of Kenya’s industrial policy. The sector plays an important role in adding value to agricultural output and providing forward and backward linkages, hence accelerating overall growth.

The manufacturing sector now comprises of more than 700 established enterprises and employs directly over, 218,000 persons as at the year 2000. A wide range of opportunities for direct and joint-venture investments exist in the manufacturing sector, including agro-processing, manufacture of garments, assembly of automotive components and electronics, plastics, paper, chemicals, pharmaceuticals, metal and engineering products for both domestic and export markets.

Paper Products

Kenya has an integrated pulp paper mill plant producing paper and paper board from renewable forest products. However, the country imports coated white lined chipboard and other boards for packaging, newsprint, printed paper and other types of paper. Investment opportunities exist in the production of paper from other raw materials such as bagasse, sisal waste, straw and waste paper.

Textiles and Apparels

Textile, Garment and Apparel manufacturing has a very high potential in Kenya. The basic raw material inputs such as dyes and chemicals are imported, as are all textile equipment and most spare parts.  Investment opportunities exist under the Manufacturing under Bond scheme and in the Export Processing zones for the production of items such as yarn and garments.

Metal and Engineering Works

Kenya has a basic metal sector making a variety of downstream products from local and imported steel scrap, steel billets and hot rolled coils. Kenya imports steel billets, coils, wire rod and wires, steel plates, sheets, steel scrap and pig iron. The country possesses a broad-based metal products sector with various independent engineering, foundry and metalwork workshops. Opportunities exist in the development of a nucleus foundry making precision castings that are then processed into precision components.

Vehicle Parts and Assembly

The motor vehicle component industry is rapidly developing to supply the needs of a few motor vehicle assemblers to meet certain local content requirements.  Opportunities exist for manufacture of components for use by local assemblers for domestic market and for export to regional markets.

Electrical Equipment:

Investment potential exists for the production of motors, circuit breakers, transformers, switch gears, irrigation pumps, capacitors, resistors, insulation tapes, electrical fittings and integrated circuit boards for both the domestic and export markets.

Electronics

Although Kenya’s electronic industry is still at its infancy, a number of firms in the assembly, testing, repair and maintenance of electronic goods are in operation and are rapidly increasing their scope of activities to meet the growing demands of the industry.

Key opportunities for direct investments, joint-ventures and subcontracting exist in assembly of a wide range of electronic goods in Kenya, especially within the Manufacturing under Bond scheme and Export Processing Zone Programmes. These include the production of consumer electronics, such as colour televisions, Video Cassette Recorders (VCRs), printers, floppy disk drives and Compact Disk Roms (CD-Rs); Telecommunication equipment, such as printed circuit boards, and transmission equipment; and Support items such as cables, cords, die casting and metal plating.With a labour force which is well-equipped to meet the labour skill requirements for the industry and the relatively large domestic and export market potential of electronics in the region, Kenya offers an enormous potential for the manufacturing and assembly of electronic items.

Plastics, Chemicals and Pharmaceuticals

The plastics industry in Kenya is well-developed and produces goods made of polyvinyl chloride (PVC), polyethylene, polystyrene, and polypropylene. All materials are imported in the form of granules. A large number of pharmaceutical formulations are produced locally in the form of tablets, syrups, capsules, and injectables, but the bulk of pharmaceuticals is imported. There is room for additional investment in the pharmaceutical industry.

Many attractive investment opportunities in chemicals, pharmaceuticals and fertilizers remain unexploited. These include the production of PVC granules from ethyl alcohol; fomaldehyde from methanol; melanine and urea; mixing and granulating of fertilizers; cuprous oxychloride for coffee bean disease; caustic soda and chlorine based products; carbon black; activated carbon; precipitated calcium carbonate; textile dyestuff; ink for ball-point pens; and gelatin capsules.

Mining and Mineral Products

Opportunities exist in the production of glass as the country is not self-sufficient. A few manufacturing units produce ceramic pottery and tiles, however, substantial quantities of ceramic pottery, tiles, sanitary-ware, and insulators are imported. Investment potential exists in prospecting and mining of other minerals such as gold, precious stones and petroleum.

Wood and Wood Products

Making use of renewable resources, investment opportunities exist for production of high quality and hand carved furniture for export, high density board from saw dust for the domestic market, high quality veneers, wooden toys, sporting goods such as cricket bats and rackets for export, and other specialty items. Recognizing the importance of environmental preservation, the Government pursues active re-afforestation programmes.

Investment opportunities in Building and Construction:

Introduction

Kenya has a well-developed construction industry. Quality engineering, building and architectural design services are readily available. This industry is currently on an upward trend following rehabilitation and reconstruction of roads and bridges under the El Nino Emergency Funds and Kenya Urban Transport Infrastructure Program. With increase in population, opportunities exist in the construction of residential, commercial and industrial buildings, including prefabricated low-cost housing.
Some of the recent project opportunities are:

Extensive opportunities for investment exist particularly in the area of upgrading slums and informal settlements, urban renewal, construction of middle and low income housing, manufacture and supply of building materials and components. Rural roads, especially feeder roads serving the country’s main agricultural and industrial areas are also being prioritized to create employment and improve Kenyans incomes. Possibilities also exist through participation in Build Own and Transfer (BoT) and extension of the Mombasa-Malaba-Busia highway to become a dual carriage-way on the North Corridor Programme. Transport linkages are set to be established with Kenya’s northern neighbours of South Sudan and Ethiopia.

Infrastructure Development:

Telecommunications

 The ongoing liberalization and privatization offer important investment opportunities to private investors, particularly in the information technology and telecommunications sectors. Investors possessing the necessary skills in those sectors can form joint ventures, particularly for the provision of cellular phones and internet services. Development of broadband infrastructure, Software and hardware development Supply of equipment, technical and consultancy services.

Business Process Outsourcing (BPOs)

This is a new but promising sector for Kenyan young people. It involves providing business services via the internet to companies and organizations in the developed countries. The advent of better Kenya-international connectivity through landing of three fibre optic submarine cables- the East Africa Marine Systems (TEAMS), SEACOM and EASSy has led to cheaper, but higher capacity communication links. The fibre optic links are expected to bring the price per megabyte down on satellite connections. This will translate to big investment opportunities and cheaper access to communication for more users.

Opportunities for investments therefore exist for new industries including BPO firms, development of software and hardware and other application development.

Kenya’s Vision 2030 for business process outsourcing is for Kenya to “Quickly become the top BPO destination in Africa”. Kenya aims at establishing major BPO parks with world class infrastructure to offer competitive incentive packages for international IT companies. Through fibre optic connectivity, Kenya is placed in a prime position to take a share of international offshore outsourcing business.

Road sub-sector

To ensure that the future road network effectively supports the socio-economic development of the country, it is proposed to improve the network by undertaking several projects. In fact, there is a proposal to venture into the construction of an underground transport system as is found in European cities. The Industrial and Commercial Development Corporation (ICDC) is willing to team up with investors from the Czech Republic who have expressed interest in the development of infrastructure for urban transport.

Kenya’s water resources of the Indian Ocean and Lake Victoria provide vast fishing potential. At present, deep sea fishing, prawn and trout farming are in their infancy but growing rapidly. Opportunity also exists in fish processing (filleting and fish meal production), as well as fisheries-support infrastructure (refrigerated transport, cold storage, etc.

Water and sanitation

Kenya is a water scarce country. Kenya’s vision is to ensure that safe water and sanitation are available and accessible to all. Investment opportunities exist in increasing the area currently under water irrigation, improvement of drainage facilities and water resource management (including water harvesting, spply and storage dams).