Towards The Full Exploitation Towards The Full Exploitation of The Investments by the of The Investments by the

African Diaspora: The role of African Diaspora: The role of IPC, KenyaIPC, Kenya

By Frederick OwitiBy Frederick Owiti

Investment Promotion CentreInvestment Promotion Centre

Migrant remittancesMigrant remittances

Transfer of funds from migrant to relatives or Transfer of funds from migrant to relatives or friends in their country of originfriends in their country of origin

They are important feature of the modern They are important feature of the modern economic lifeeconomic life

Remittances are important source of global Remittances are important source of global development finance development finance

They provide much sought after foreign They provide much sought after foreign exchange to recipient countriesexchange to recipient countries

They supplement the domestic incomes of They supplement the domestic incomes of millions of poor families across the worldmillions of poor families across the world

Diaspora Diaspora remittances......contremittances......cont

They are more stable source of capital than They are more stable source of capital than private capital hence used as collateral against private capital hence used as collateral against which to borrow on the international capital which to borrow on the international capital marketmarket

They have a direct impact on poverty reduction They have a direct impact on poverty reduction because they flow directly to poor householdsbecause they flow directly to poor households

Diaspora are major source of FDI, market Diaspora are major source of FDI, market development, Technology transfer, development, Technology transfer, philanthropy, tourism, political contribution philanthropy, tourism, political contribution and more intangible flows of knowledge, new and more intangible flows of knowledge, new attitudes, and cultural influenceattitudes, and cultural influence

Organizing the Organizing the DiasporaDiaspora Diaspora is the creation of individuals and Diaspora is the creation of individuals and

groups acting on their own initiatives groups acting on their own initiatives rather than a product of government rather than a product of government interventionintervention

Diaspora organization include Diaspora organization include associations, religious organizations, associations, religious organizations, professional association, charitable professional association, charitable organization, development NGO’s, organization, development NGO’s, investment groups, affiliate of political investment groups, affiliate of political parties, humanitarian relief organization, parties, humanitarian relief organization, school and clubs for preservation of school and clubs for preservation of culture, virtual networks and federation of culture, virtual networks and federation of association association

Remittances to Remittances to developing countriesdeveloping countries In 2001 they stood at $72.3B, 42% of FDIIn 2001 they stood at $72.3B, 42% of FDI In 2003 over $300B was estimated to have In 2003 over $300B was estimated to have

been sent from developed to developing been sent from developed to developing countriescountries

Remittances is the second largest source Remittances is the second largest source behind FDI of external funding for developing behind FDI of external funding for developing countries.countries.

A recent survey indicates that only 6% of the A recent survey indicates that only 6% of the remittances sent by the Diaspora is investedremittances sent by the Diaspora is invested

Obstacles facing Obstacles facing African DiasporaAfrican Diaspora The lack of awareness and The lack of awareness and

information on investment information on investment opportunitiesopportunities

Investment in Africa needs to be Investment in Africa needs to be positively challenged to create positively challenged to create economic growth for Africaeconomic growth for Africa

Situation in KenyaSituation in Kenya

Due to unemployment/underemployment of Due to unemployment/underemployment of highly educated Kenyans many have migrated highly educated Kenyans many have migrated outwards in such of opportunitiesoutwards in such of opportunities

There has been an increase of remittance There has been an increase of remittance coming into the country from the Kenyan coming into the country from the Kenyan DiasporaDiaspora

There is significant potential for the There is significant potential for the optimization of remittance from the Diaspora optimization of remittance from the Diaspora through a number of initiatives by the through a number of initiatives by the government, the Diaspora themselves and the government, the Diaspora themselves and the local communitylocal community

IPC interest in IPC interest in Diaspora remittanceDiaspora remittance Remittance flows are second Remittance flows are second

largest source behind FDI of largest source behind FDI of external funding for developing external funding for developing countriescountries

They are one of the least volatile They are one of the least volatile sources of foreign exchange for sources of foreign exchange for developing countriesdeveloping countries

They are expected to rise They are expected to rise significantly in the long termsignificantly in the long term

Mandate of IPCMandate of IPC

Promote and Facilitate investments in KenyaPromote and Facilitate investments in Kenya Assist foreign and local investors and potential Assist foreign and local investors and potential

investors by;investors by;

• issuing investment certificateissuing investment certificate• assisting in acquiring any necessary licensesassisting in acquiring any necessary licenses• assisting in obtaining incentivesassisting in obtaining incentives• providing information on investment opportunities, providing information on investment opportunities,

sources of capital, etcsources of capital, etc Promote investment opportunities both locally and Promote investment opportunities both locally and

internationallyinternationally Review the investment environment and make Review the investment environment and make

recommendations to the Governmentrecommendations to the Government• changes to promote and facilitate investmentchanges to promote and facilitate investment• changes to licensing requirementschanges to licensing requirements

VisionVision““To be a world class agency in To be a world class agency in

marketing Kenya as the first choice marketing Kenya as the first choice investment destination”investment destination”

MissionMission““To provide exceptional services to To provide exceptional services to

attract, facilitate and retain attract, facilitate and retain investments in Kenya”investments in Kenya”

Investment ProcedureInvestment Procedure

Registration of business by the Registration of business by the Registrar of Companies Registrar of Companies

Under Companies Act or Business Names ActUnder Companies Act or Business Names Act

Application for approval of Application for approval of investments are submitted to investments are submitted to Investment Promotion Centre Investment Promotion Centre (IPC)(IPC)

Investment procedure.... Investment procedure.... ContCont

Approval is based on security, health and Approval is based on security, health and environmental requirementsenvironmental requirements Within ten working days after receipt of application, a Within ten working days after receipt of application, a

written report on application is prepared.written report on application is prepared. Within five working days after report is prepared, a Within five working days after report is prepared, a

decision with respect to the application is made.decision with respect to the application is made. Within five working days after the decision is made, the Within five working days after the decision is made, the

applicant is informed in writing of the decision.applicant is informed in writing of the decision. Issuance of Certificate of General AuthorityIssuance of Certificate of General Authority

If, in the unlikely event, the application is If, in the unlikely event, the application is refused:refused: Written reasons shall be preparedWritten reasons shall be prepared Within five days after the decision is made, the Minister Within five days after the decision is made, the Minister

is informed with a copy of the application, a copy of is informed with a copy of the application, a copy of report on application and a copy of reasonsreport on application and a copy of reasons

Investment procedure... Investment procedure... ContCont

ComplaintComplaint

• If the application does not receive response within If the application does not receive response within twenty five days, he/she can make a written twenty five days, he/she can make a written complaint to the Ministercomplaint to the Minister

• The Minister shall investigate the complaint and The Minister shall investigate the complaint and within fifteen days inform the applicant of the within fifteen days inform the applicant of the results of the investigationresults of the investigation

Entry Permits (Work Permits)Entry Permits (Work Permits)

Approval by an Interministerial Approval by an Interministerial CommitteeCommittee

• IPC is a member of the CommitteeIPC is a member of the Committee• Three Class A (employee) Entry PermitsThree Class A (employee) Entry Permits• Assured three Class H (investor) Entry PermitsAssured three Class H (investor) Entry Permits• Additional Entry Permits on meritAdditional Entry Permits on merit

LicensingLicensing

Trade License from the Ministry of Trade & Trade License from the Ministry of Trade & Industry (free)Industry (free)

Single Business Permit from Local Authority Single Business Permit from Local Authority (fee payable)(fee payable)

Restricted operations require licensesRestricted operations require licenses Under the National Environment Under the National Environment

Management Act, full or partial Management Act, full or partial environmental impact assessment licenseenvironmental impact assessment license

Support to investorsSupport to investors

IPC will facilitate all the wayIPC will facilitate all the way

• ApprovalApproval• Identification of licenses requiredIdentification of licenses required• Acquisition of the necessary licensesAcquisition of the necessary licenses

Investors are advised to go through Investors are advised to go through IPCIPC

Government inputGovernment input

Eradication of corruption and the Eradication of corruption and the institutionalization of clear legal protection thus institutionalization of clear legal protection thus sustain a robust climate for increased FDIsustain a robust climate for increased FDI

Design policies to make the transfer of Design policies to make the transfer of remittances more cost effective in poverty remittances more cost effective in poverty reductionreduction

Integration of members of Diaspora Integration of members of Diaspora communities in the labour marketcommunities in the labour market

Promote regularization of legal status, Promote regularization of legal status, credentialing, training, language acquisition to credentialing, training, language acquisition to build capacity of Diaspora communitybuild capacity of Diaspora community

Government Government input......Continput......Cont Develop national programmes providing Develop national programmes providing

investment guarantees to the Diasporainvestment guarantees to the Diaspora Effort should be put on lowering transaction Effort should be put on lowering transaction

costs, improving data collection, extending costs, improving data collection, extending the availability of financial services to the the availability of financial services to the poor people and rural areaspoor people and rural areas

Encourage collective remittances to Encourage collective remittances to support community development and support community development and employment generationemployment generation

Sponsor research on patents and uses of Sponsor research on patents and uses of remittancesremittances

Government Government input......Continput......Cont Create a government body with a sole Create a government body with a sole

focus of acting as a liaison between focus of acting as a liaison between Kenya and its DiasporaKenya and its Diaspora

Kenya’s Investment Promotion Centre Kenya’s Investment Promotion Centre would be delighted to accomplish this would be delighted to accomplish this rolerole

Introduction of legislation to grant dual Introduction of legislation to grant dual citizenship to Kenyan Diasporacitizenship to Kenyan Diaspora

Introduction of international Introduction of international government bonds with central bank government bonds with central bank guarantee targeted at Kenyan Diasporaguarantee targeted at Kenyan Diaspora

Government Government input......Continput......Cont IPC in conjunction with the government is in IPC in conjunction with the government is in

the process of formulating specific incentives the process of formulating specific incentives to attract remittance from Kenyan/Africans to attract remittance from Kenyan/Africans abroadabroad

The investment code in Parliament will go The investment code in Parliament will go along way to improving the investment along way to improving the investment environment in Kenyaenvironment in Kenya

NEPAD peer group system, CCIA, EAC model NEPAD peer group system, CCIA, EAC model investment code will improve the situation investment code will improve the situation even furthereven further

Several bilateral investment treaties have Several bilateral investment treaties have been signed between Kenya and other been signed between Kenya and other countries for the protection and promotion of countries for the protection and promotion of investmentinvestment

Where can the Diaspora Where can the Diaspora invest in Kenya?invest in Kenya?

Stocks/bonds-safest but returns Stocks/bonds-safest but returns are a bit low right noware a bit low right now

Real estate-invest Kshs. 30 Million Real estate-invest Kshs. 30 Million recoup your investment in 5-6 recoup your investment in 5-6 yearsyears

Services- Education, Health, ICT, Services- Education, Health, ICT, Insurance & Banking and TradeInsurance & Banking and Trade

THEREFORE,in THEREFORE,in conclusionconclusion

If one is now looking for and expecting a If one is now looking for and expecting a country where:country where:

investments are guaranteedinvestments are guaranteed there is good quality of life in Africathere is good quality of life in Africa there is liberalized and stable economic there is liberalized and stable economic

atmosphereatmosphere donor support is withheld and is still able to donor support is withheld and is still able to

stand on its feetstand on its feet there are abundant natural resourcesthere are abundant natural resources

there is readily available highly trained there is readily available highly trained and affordable manpowerand affordable manpower

there is access to regional and there is access to regional and international marketsinternational markets

there is fairly well developed infrastructure there is fairly well developed infrastructure in the regionin the region

there is ‘One Stop Centre’ facility for there is ‘One Stop Centre’ facility for project processing.project processing.

Then,Then,KENYA IS IDEALKENYA IS IDEAL

THANK YOU-KWAHERI-KARIBU KENYA!THANK YOU-KWAHERI-KARIBU KENYA!

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