Kenya has a number of tax treaties and investment promotion and protection Agreements. Exports from Kenya enjoy preferential access to world markets under a number of special access and duty reduction programmes. Kenya is signatory to various agreements aimed at enhancing trade amongst member states.

Multilateral Trade System (MTS)
The World Trade Organization (WTO) is the only international organisation dealing with the global rules of trade between nations. The overriding objective of the WTO is to ensure that trade flows as smoothly, freely and predictably as possible. Kenya has been a member of the WTO since its inception in January 1995.

ACP/Cotonou Partnership Agreement
Exports from Kenya entering the European Union are entitled to duty reductions and freedom from all quota restrictions. Trade preferences include duty-free entry of all industrial products as well as a wide range of agricultural products including beef, fish, dairy products, cereals, fresh and processed fruits and vegetables.

African Growth and Opportunity Act (AGOA)
Kenya qualifies for duty free access to the United States of America (USA) market under the African Growth and Opportunity Act enacted by USA. Kenya's major products that qualify for export under AGOA include textiles, apparels, handicrafts, etc.

Generalised System of Preferences (GSP)
Under the Generalised System of Preferences, a wide range of Kenya's manufactured products are entitled to preferential duty treatment in the United States of America, Japan, Canada, New Zealand, Australia, Switzerland, Norway, Sweden, Finland, Austria, and other European countries. In addition, no quantitative restrictions are applicable to Kenyan exports on any of the 3,000-plus items currently eligible for GSP treatment.

Investment Protection Guarantee
The constitution of Kenya guarantees protection of life and private property. The Foreign Investment Protection Act guarantees against expropriation of private property by government. Kenya is a signatory to and Member of the Multilateral Investment Guarantee Agency (MIGA) an affiliate of the World Bank which guarantee investors against loss of Investment to political problems in host countries.

Kenya is also signatory to International centre for Settlement of Investment Disputes which is a channel for settling disputes between foreign investors and host governments

Bilateral Trade Agreements
Kenya has signed bilateral trade agreements with several countries around the world. Some of the countries are already members of existing schemes offering market access/duty reduction preferences as above.
1. Argentina 15. Nigeria Agreements Under Negotiations
2. Bangladesh 16. Pakistan 1. Belarus
3. Bulgaria 17. Poland 2. Czech Republic
4. China 18. Romania 3. Ethiopia
5. Comoros 19. Russia 4. Eritrea
6. Congo (DRC) 20. Rwanda 5. Iran
7. Djibouti 21. Somalia 6. Kazakhstan
8. Egypt 22. South Korea 7. Mauritius
9. Hungary 23. Swaziland 8. Mozambique
10. India 24. Tanzania 9. South Africa
11. Iraq 25. Thailand
12. Lesotho 26. Zambia
13. Liberia 27. Zimbabwe
14. Netherlands


INVESTMENT OPPORTUNITIES IN AGRICULTURE

Overview
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 of the agricultural sector through accelerated food crop production and increase of non-traditional exports. There are also opportunities for improvement in technology infrastructure such as packaging, storage, and transportation. Intensified irrigation and additional value added processing are marketable areas for investments.

Agricultural Support
Investment opportunities 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.

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 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. 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 are untapped potential in Kenya.


INVESTMENT OPPORTUNITIES IN TOURISM

Overview
Tourism is Kenya's third largest foreign exchange earner. The tourism industry is growing as a result of the liberalisation measures, diversification of tourist generating markets and continued Government commitment to providing an enabling environment, coupled with successful tourism promotion and political stability. Enormous opportunities exist for investment in film production; recreation and entertainment facilities in the following areas:
• Conference Tourism
• Cultural tourism
• Cruise ship Tourism
• Aviation/tour and travel Tourism
• Eco-tourism

Potential investors can take full advantage of these opportunities through direct investments or joint-ventures with Kenyan entrepreneurs. Opportunities also exist in this sector in the construction of tourist hotels and game lodges all over the country.

Kenya is a vast country with a wide range of potential tourist attractions, which have not been fully exploited. Currently, the tourism industry is mainly concentrated at the country’s coastal area and in the National Parks and Game Reserves. As a policy matter, the Government of Kenya is strongly committed to the regional diversification of this very important industry to other areas for some good reasons. Similarly, the potential for the domestic market has not been fully exploited.

There is also need to identify other tourist attractions besides the existing National Parks, Game Reserves and the Beach. In order to extend the length of stay of “safari” tourists in Kenya, emphasis will be put into the development of inland “resorts” situated close to the national parks and game reserves. It is noted that the main constraint to the development of such resorts has been lack of sufficient investment capital. Participation in such investment ventures will, therefore, be very much encouraged by the Government of Kenya in order to exploit the tourism potential in those areas.


INVESTMENT OPPORTUNITIES IN BUILDING & CONSTRUCTION

Overview
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.

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 are also being prioritized to create employment and improve Kenyans incomes. Possibilities also exist through participation in concessioning and dualing of the Mombasa-Malaba-Busia highway on the North Corridor Programme. Transport linkages are set to be established with our northern neighbours of Sudan and Ethiopia to open up markets for Kenyan goods. These initiatives provide opportunities for the provision of credit to construction companies.

Some of the recent project opportunities are;
• Road Construction
• Development of the rail link to South Sudan
• Rehabilitation of Airports
• Development of a Second Port at Lamu
• Kenya - Uganda & regional pipeline extension (Petroleum)
• Construction of upstream refinery
• Construction or upgrading of storage, distribution, and product handling facilities(Petroleum)
• Solar / wind energy plants
• Urban housing development by private and public sector
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 skill 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 More on investment opportunities
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 go into partnership with investors to team up with investors from the Czech Republic who have expressed interest in the development of infrastructure for urban transport.
• Supply of road safety equipment
• Training on road safety issues
• High capacity urban transport development
• Supply of equipment, technical and consultancy services
Tyres
The country currently has only one tyre manufacturing facility namely Firestone (E.A.) Limited. ICDC is convinced that another tyre manufacturing facility would be a feasible proposition and is therefore looking for joint venture partners to promote one.

Port facilities
Berths
Investment opportunities exist in the rehabilitation of berths to give them a new lease of life for efficient and economic operations.
• High capacity urban transport development
• Supply of equipment, technical and consultancy services
Conversion of port berths into container berths - Mombasa
Investment opportunities are available in the conversion of berths at Mombasa port into container berths to cater for increased container traffic.
Container terminal management systems.

Opportunities exist in the study and installation of modern information technology systems at Mombasa Container Terminal to enhance the fluidity of container traffic movements.
Construction of bypass to substitute the Likoni Ferry
The Likoni Ferry in Mombasa presents a major transportation bottleneck. ICDC intends to approach investors with the necessary technical know-how and finance to construct a road bypass to replace the Likoni Ferry.
Rehabilitation of port services
Management of port services
Capacity building for the Kenya Maritime Authority
Supply of equipment, technical and consultancy services for marine engineering

Civil Aviation
Airports
Potential opportunities exist in the form of developing airports to cater for the ever-increasing passenger volumes and the growth of air traffic.
• Rehabilitation of airports
• Management of airports
• Supply of equipment, technical and consultancy services
New opportunities for horticultural and fish transport from Kisumu (Air-transport)
ENERGY
Overview
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: petroleum, electricity and wood-fuel. 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.

Supply of electricity rose by 4.1 percent in the first seven months of 2006 from 3,149.5 million kilowatt hours (KWH) in a similar period last year. Consumption of electricity grew by 4.9 percent to 2,682.1 million KWH during the period in line with the increase in economic activity. Completion of Sondu-Miriu project towards the end of 2007 is expected to add about 60.0 million kilowatt hours (KWH) to the national grid system. A breakdown of electricity supply by source shows that Hydro-power, Geo-thermal and Thermal generation increased by 1.0 percent, negative 1.1 percent and 14.7 percent, respectively in the January to July 2006 period. The respective shares in the total electricity supply were 53.2 percent, 18.3 percent and 28.5 percent for hydropower, geo-thermal and thermal generation. In Petroleum sector, crude oil price increased by 27.85 percent to US $ 73.00 per barrel in July 2006 up from US $57.10 per barrel in July 2005.

INVESTMENT OPPORTUNITIES IN ENERGY
Overview
Presently, the Kenyan oil market, whose total sales volume reaches around 2.3 million cubic metres per annum, is served by eight private companies. The Government of Kenya expects that, upon deregulation of the oil industry, the Kenyan market will open up to new companies.

Moreover, potential demand for Liquefied Petroleum Gas (LPG) is expected to increase to twice its present amount in the near future. However, supply and distribution of LPG have been constrained by a number of factors including limitation of production from the Kenyan Petroleum Refineries Ltd. (KPRL). LPG supply and distribution thus represents an area where opportunities are available for investment.

The Government also plans to invest in the petroleum sub-sector, embarking on projects like oil exploration and oil pipeline rehabilitation.

Electricity sub-sector
The demand for electricity is estimated to have increased at the rate of 5.4% per annum between 1994 and 2000. To meet this demand, the Government, in collaboration with the World Bank, has prepared an investment programme for the electricity sub-sector. The National Power Development Plan recommends that during the next 15 years geothermal generation should increase to 280MW, partly due to the predicted abundance of geothermal energy resources in the country.

Transformers
ICDC has the intention of promoting a project, to be based on joint ventures with interested investors, to manufacture transformers mainly for electric power. Currently, all the requirements of the country are imported.

Petroleum
Following liberalization of power generation by the Government in 1994, projects earmarked for development through least cost development criteria have been and will continue to be offered for implementation on the basis of international competitive tenders. These projects include geothermal energy, hydropower, oil based thermal and any other economically competitive source. Advertisements for such projects will be made both locally and internationally from time to time. In addition, all such projects will be screened for their environmental impact and mitigation cost weighed against potential benefits to ascertain their economic viability.
Water
The demand for water supply and sewerage facilities has been outstripping the development of the same. While most urban centres in Kenya have functional facilities, the level of service has not been at the expected level and most of these systems are in dire need of rehabilitation and augmentation to meet the rising demands. One major area that needs improvement is the management of the water utilities, and private sector involvement would be welcome in order to improve on the efficiency and accountability. There are still quite a number of urban centres that require the development of new facilities, as the existing facilities can no longer cope up with the demand. However, with the new policy which advocates for the adoption of the user pays and the polluter pays principles, development of these facilities could be undertaken by the private sector as viable business ventures with the arrangement that the developer will be granted water undertaking.

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 andimported 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:

1. Consumer electronics, such as colour televisions, Video Cassette Recorders (VCRs), printers, floppy disk drives and Compact Disk Roms (CD-Rs);

2. Telecommunication equipment, such as printed circuit boards, and transmission equipment; and
3. 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), polythylene, 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 gelatine 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 speciality items. Recognising the importance of environmental preservation, the Government pursues an active re-afforestation programmes.

MANUFACTURING
Overview
In the manufacturing sector, a 6.0 percent growth is expected in 2006 as outlined in the budget strategy paper of 2006/07. The growth will be fuelled by strong import demand for agro-based raw materials substituting local agro-based raw materials that was affected by drought in the first quarter of 2006. Output for the bigger proportion of selected industries increased in the first seven months of 2006. Cigarettes and sugar production increased by 9.2 percent, 22.5 percent and 6.8 percent in that order, while cement and soda ash production dropped slightly by 1.3 percent and 1.7 percent, respectively.

To enhance production in the manufacturing sector, the Government during the 2006/07 budget continued to improve the tax incentives introduced in the fiscal year 2003/04. The incentives included duty waivers on capital goods, plant and equipment. To simplify licensing and reduce the cost of doing business, 17 trading licenses were removed in the fiscal year 2005/06 and a further 118 licenses are to be eliminated in the fiscal year 2006/07 together with removal of duties on selected imported inputs.

INVESTMENT OPPORTUNITIES IN ENVIRONMENT & NATURAL RESOURCES
Mining
Kenya has well-developed cement processing plants that satisfy the domestic market and exports to the regional market. Approximately 1.2 million tones of cement are consumed locally each year. 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.

Fisheries
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.

Investment in Forestry
In order to achieve sustained forest management, there will be a need to carry out a well-focused investment in the following areas:
• Forest valuation
• Capacity building in resource assessment, planning and management, impact assessment,
• geographical information systems, monitoring and evaluation
• Research in non-wood tree products to enhance their economic potential
• Development of credit support to private forest investments
• Improving data and information for management planning through regular surveys and
• forest inventories
• Developing and improving marketing of forest products
• Modernisation of forest industries to improve efficiency
• Dry land sylviculture

INVESTMENT OPPORTUNITIES IN BANKING & FINANCE
Some areas for investment opportunities:
• Lease Hire
• Micro-Financing on whole sale basis
• Investment Banking
• Insurance Services
Business Advisory services – trusteeship and Receiverships
BANKING AND FINANCE
Overview

"Kenya’s financial services sector is the most sophisticated in the region. It is preparing to build on its strengths and grow in line with an expanding economy"

Kenya's financial system is among the largest and more developed in Sub-Saharan Africa, with a large banking sector.
The banks, Non Banking Finance Institutions, microfinance institutions and building societies are supervised by the Central Bank of Kenya while Savings and Credit Cooperatives are regulated by the Commissioner for Cooperatives. No one person can own more than 25% of a commercial bank and the government does not fully own any commercial banks however it does maintain ownership shares in four major commercial banks. Recent developments include the creation of a formal deposit insurance scheme, the Deposit Protection Fund. Also, in June 2005, the CBK finalized plans for electronic money transfers between banks—Real Time Gross Settlement—allowing for the instantaneous movement of funds.
Financial services growth, which was muted in 2003 and 2004, is clearly poised for a take-off in Kenya, on the back of a strengthening economy and systematic reforms of the sector.
Growth in the sector was only 1.5 percent and 1.4 percent in real terms in 2003 and 2004, respectively. But since then, growth in the industry has surged to 8.1 percent in 2005, with the stock of private credit rising further at a rate of 13.5 percent for the year ending September 2006.
To prepare for sweeping upgrades of both banking and insurance, the government has introduced some changes in oversight structure and their top managements. The insurance industry will soon have an independent regulator, following the signing into law of the Insurance Amendment Act of 2006. The new regulatory authority will replace the Office of the commissioner of Insurance.
Banking and insurance reforms
Steady modernization of the financial sector has played a key role in promoting its growth. The introduction of Real Time Gross the Settlement (RTGS) has speeded settlement of online and chequebased payments.
Tighter supervision of banks, including the introduction of more stringent governance guidelines, has also played a part. So, too, have investment by banks in electronic payment technology and in wider networks of cash-point machines throughout the country
The new Banking Act that took effect in January 2007 is expected to have a strong impact on growth, by improving the lending environment. Under the new law, banks will have access to better credit information from loan applicants, and borrowers will benefit from a legal cap on interest charges. In particular, the law will restrict interest charged on loans to no more than double the principal amount.
Even before this law was enacted, the ratio of non-performing loans (NPLs) was falling steadily. The main holders of NPLs have been the large state-owned banks, and the government has spurred these banks to write-off bad loans and improve their balance sheets, in preparation for privatization. Eventually the government plans to withdraw completely from commercial banking. It has already made strides in that direction, restoring Kenya Commercial Bank (KCB) to profitability and proceeding with a restructuring and privatization of the National Bank of Kenya (NBK).
While banking dominates the financial service sector, representing between 70 and 80 percent of financial assets, the insurance industry is also preparing for a major expansion.
Introduction of new mandatory, nationwide health and pension insurance plans will boost demand for these types of insurance, including for supplementary health and pension products provided by the private sector. The health and pension reforms are also expected to increase awareness of and demand for other types of insurance, such as property and life coverage.
Meanwhile, the government has tightened regulation of the industry, promulgating new rules for minimum capital guarantees by brokers and agents. As confidence in agents and underwriters grows, penetration of potential insurance markets in Kenya is expected to rise well beyond its current level of 3.09 percent.
Booming capital markets
Along with banking and insurance, capital markets are poised for a growth spurt. One big driver of that growth will be the introduction of mandatory pension coverage, which will create demand for investment instruments to ensure that funds are available to pay future retirees.
The stock market has already experience one such expansion phase related to the pension market. Following the introduction of regulations in 2000 requiring pension funds to be professionally managed, several insurers – including Old Mutual, British American and African Alliance – launched unit trusts for retail and institutional clients. The new institutional investors have boosted demand for financial instruments of all types.
Beyond growth spurred by the new pension programme, the stock market is expecting to receive a boost from a growing economy generally. Currently, there are 54 listed companies on the Nairobi Stock Exchange (NSE), and cooperate bonds have been issued by two of Kenya’s mobile telecommunications companies (Safaricom and Zain) , as well as by several regional multilateral development banks.
The NSE, which began trading in the 1950s, is being modernized. In recent years it acquired a central depository and settlement system, which has reduced settlement periods. In September 2006, an electronic trading system replaced the “open outcry” method. This is boosting trading volumes and speeding transaction times. As a result of all this changes, the NSE has risen strongly in recent quarters, as both listings and share-trading volumes have increased. The NSE-20 index rose from 4’880 to 5’646 from the 3rd to the 4th quarter of 2006. The percentage stage year-on-year was 42.1 percent in the 4th quarter and 27.3 percent in the 3rd quarter of that same year.

The stock exchange still slightly suffers from concerns about liquidity, which cause investors to concentrate their funds on only about half of the listed stocks. Exchange officials expect, however, that an improved economic environment will boost the prospects of listed companies, making them more attractive targets for investors.
Mobile Banking Innovation
Mobile phone growth in Kenya, as in most of Africa, has been remarkable, even among the rural poor. In June 1999, Kenya had 15,000 mobile subscribers. It now has over 16 million out of a population of 35 million with this growth and a large portion of the population remaining unbanked. The biggest mobile phone company Safaricom, introduced M-PESA a service allowing you to transfer money using a mobile phone.
Kenya is the first country in the world to use this service and its runaway success has seen the system being replicated by local competitors, and internationally

INVESTMENT OPPORTUNITIES IN INFORMATION AND COMMUNICATION
The government of Kenya has made ICT a priority in it’s economic recovery strategy initiatives. With the incentives and benefits that Kenya has to offer, the following areas can be invested in:
• I.T. Enabled Services
• Call Centers for both inbound and outbound calls
• Wide range of Business Process Outsourcing activities
• Disaster recovery
• Software development
• Education and Training
• ICT Habitats
• Development of Broadband infrastructure
Knowledge Industry
To compliment all the above sectors, Kenya aspires to attract internationally reputable educational institutions, universities and training centers. The following areas exist for investment:
• Science and technology centers
• IT Centers of Excellence
• Training Centers for Hospitality industry
• School Fashion and Design
• R&D institutes
Schools for Business and International Marketing