Intermediary Cities Competitiveness: A Look into Kenya’s Investment Landscape The UK Government through its Sustainable Urban Economic Development Programme (SUED)SUED is working with selected municipalities in Kenya to attract investment for climate resilient infrastructure and value chain projects. The programme is working with county governments and the private sector to improve urban economic planning and raise investment for bankable, climate-resilient infrastructure and value chain projects to ensure that these emerging urban centres develop in an inclusive and sustainable way. Kenya’s urban population is expected to increase by 50 percent by 2030, presenting both challenges and opportunities.1 With nearly 1 million young people entering the job market each year, it is critical to generate adequate jobs. Post devolution in Kenya, counties are at the forefront of promoting job creation and poverty reduction through a multisectoral approach towards investment attraction and a significant number of these investments are likely to be located in emerging cities and municipalities. The following sections highlight aspects that can promote sustainable investment in municipalities in Kenya that are being supported by SUED, with examples from Kisii and Iten municipalities. SUED’s experience of successfully attracting investment in two projects in the municipalities is used as an illustration. This includes investment by Avofresh Processors Limited in the avocado oil project in Kisii Municipality, Kisii County; and investment by Select Fresh Produce Kenya Limited in the Irish and sweet potatoes project in Iten Municipality, Elgeyo Marakwet County. Governance and Creation of an Enabling Business Environment for Investors The municipalities and county governments have the responsibility of creating an enabling environment for investment. According to KenInvest, some of the considerations to attract investors to counties include a clear investment policy; secure and predictable investment environment; simplified procedures for investment and business operations; well-packaged information on investment opportunities; investment incentives; comprehensive masterplan and land/property database; good and serviceable infrastructure and utilities; access to affordable financing; availability of developed human resources; and availability of technical support, in particular for SMEs.2 These activities require direction and coordination within the county government and with national government. However, counties face capacity limitations in investment promotion. KenInvest proposes the creation of a county level investment promotion unit to deliver investment promotion services to potential and existing investors3. The unit could initially have a simple but functional structure that aligns with the current needs of the County. Staff could be seconded on part-time basis from the department dealing with trade and investment to work in the unit. As the number of investors increases, the unit can also evolve, employing more staff on a full-time basis to provide specialised investment promotion services. Many counties are yet to set up or operationalise investment promotion units. In addition, capacity building of investment promotion officers in trade and investment departments or county level investment promotion agencies, as well as other officials that engage with 1
World Bank Group. 2019. 'Creating Markets in Kenya: Unleashing Private Sector Dynamism to Achieve Full Potential'. Country Private Sector Diagnostic. 2 Kenya Investment Authority (KenInvest). 2019. County Investment Handbook: Enhancing Investment in the Counties. 3
Ibid.
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