Kenya
BUSINESS ENVIRONMENT
by Richard Harney
Kaplan & Stratton Advocates, Nairobi
BACKGROUND
KENYA IS SUB-SAHARAN AFRICA’S THIRD LARGEST ECONOMY (GDP of US$15,6-billion in 2004), after South Africa and Nigeria. Its economy is principally agriculture-based (30% of GDP) with tea, coffee and horticulture providing the principal export commodities. Tourism is a major foreign exchange earner. Nairobi is the third largest centre in the world for the UN and is also home to numerous other international organisations, non-governmental organisations, press agencies and diplomatic missions who use Nairobi as their African or regional base. Significant resources have been committed to the East African region in recent years in terms of relief work and conflict resolution in Somalia, Sudan, Rwanda, Democratic Republic of Congo and Burundi, and most of these operations have been conducted from Nairobi.
With relative political stability, a multi-party parliamentary democracy (since 1991), a well-educated and hard-working people (population 33 million) and a sound legal system, Kenya has the potential to be the power-house of development for East Africa.
TAX SYSTEM
The Kenya Revenue Authority is responsible for all revenue collection and management of the tax system.
INVESTMENT CLIMATE
With a liberalised economy (price controls and foreign exchange controls were lifted more than a decade ago), and a vibrant market-driven private sector, Kenya could be further along the development path than it is.
FINANCIAL AND CAPITAL MARKETS
Kenya has the most sophisticated financial and capital markets in the East African region. Professional standards among bankers, investment advisers, fund managers, accountants, lawyers, brokers and other intermediaries are high.
(For full editorial, see African Mirror: Lerato Mbele)
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