The Role of Kenya Investment Authority in Attracting Foreign Direct Investment in Kenya

Abstract

Foreign direct investment is important in a developing country where there exist a high level of unemployment and generally a need to improve the livelihood of the people. In this context therefore, there is need for a country to develop a conducive business environment that will attract the same the foreign investors and establishment of one stop shop where all enquiries pertaining to both local and foreign investment in the country will be available, is such one step. The study aimed at establishing the role of Kenya Investment Authority in attracting direct foreign investment in Kenya. Towards the realization of the same objective, a case study research design was adopted whereby the researcher interviewed five managers in KIA. The respondents had different academic qualification and years of experiences in dealing with implementation of the institutions strategies for attracting direct foreign investment in the country. The data was collected through the use of the interview guide that was prepared to guide the researcher on the research objective. The findings of the study were that Kenya has increasingly become attractive to FDI in the last 10 years and this has been due to an improved road and telecommunication infrastructure as well as more recently the enactment of a new constitution that has put more safeguards in the protection of private property and thus no individual government can take a seizure policy without contravening the law. KenInvest facilitates approvals of prospective investment projects which have their details submitted on a prescribed application form issued by KenInvest. KIA has provided one-stop shop advantage office for investors in that all issues pertaining to local investment can be found in the office. In addition, KIA has developed a code that set forth guidelines on investment that enumerate the various investment incentives and mandate that all new projects should obtain before approval is granted. In addition, the interviewees observed that KIA has been continuously lobbying the government to harmonize investment regimes in all the East African Community countries and which will eventually aim to remove all tariff barriers between the states. Attraction of direct foreign investment to a country is of importance in terms of creating employment and increasing the general economic development of the country. Therefore, it is important that a country establishes all necessary mechanism that will attract these investors. The necessary conditions such as efficient communication and road network should be availed and the cost of production also are made affordable through a supply of affordable labor, raw materials and power for running the factories.