1. Role of Government in Promoting and
Supporting Private Sector Development
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KENYA

2. Vision 2030
 National forward looking development blueprint launched by His Excellency
Mwai Kibaki in 2006
 Covering the period 2008-2030, implemented in 5 year Medium Term Plans
 Aims to transform Kenya into a newly industrializing, middle income country
with an annual average growth rate of 10%
 Anchored on 3 pillars – economic, social and political governance
 Growth momentum has been strong and underpinned by structural reforms, a
new constitution and a dynamic private sector
 Social and political pillars to address necessary reforms to ensure realization
and sustainability of economic goals

3. Economic Pillar
 Aims to improve the prosperity of Kenyans through an economic
development programme, covering all regions of Kenya and achieving an
annual average GDP growth rate of 10% per annum
 Sector based:
 Tourism
 Agriculture
 Wholesale and Retail
 Manufacturing
 Business Process Offshoring / IT Enabled Services
 Financial Services
 Sectors identified based on potential to make a widely inclusive economic
impact and feasibility of unlocking potential for economic growth,
employment and poverty reduction

5. Creating an Enabling Environment for Private
Sector Development
 Increased the ease of starting a business and obtaining licenses through ‘one-
stop-shop’ process
 Incentives to encourage investment through corporate tax relief for
investments , training subsidies, establishment of free ports and free trade
zones
 Developing modern trans-country infrastructure
Roads
Railways
Ports
Airports
Water and sanitation
Telecommunications

6. Creating an Enabling Environment for Private Sector
Development
 Increasing energy supply by encouraging more private generation of
power and separating generation from distribution
 Geothermal
 Coal
 Renewable energy- solar, wind
 Connecting Kenya to energy – surplus counties in the region
 Land reform
 Protection of property rights, computerization of land regimes, facilitating
the process of land administration, establishment of national spatial data
infrastructure to track land use patterns; enhanced legal framework for
faster resolution of land disputes
 Public Sector Reform
 an efficient, well trained and motivated public service that values
transparency
 Accountability to Kenyan citizens based on results based assessments

7. Creating an Enabling Environment…
 Reforming governance institutions and regulatory frameworks.
 Human Resource Development
 Training Subsidies
 Establishment of Technical Training Institutions
 Closer collaboration between industry and training institutions
 Security
 Police sector reform and training

8. SEZ Incentives- free ports, trade zone, agriculture and tourism zones, and
science and technology parks ..
Top income and corporate 30%
tax rates
Fiscal Incentives 10 year corporate income tax holiday and a
25% tax rate for a further 10 years thereafter
Dividend Taxation 10 year withholding tax holiday on dividends
and other remittances to non-resident parties
VAT Perpetual exemption from VAT and customs
import duty on inputs including energy. VAT
exemption also applies on local purchases of
goods and services supplied by Kenyan
companies.
Other Incentives Perpetual exemption from payment of stamp
duty on legal instruments. 100% investment
deduction on new investment in buildings and
machinery, applicable over 20 years
Training incentives Entire cost of training with (DIT certified
trainer) can be reimbursed. Registration with
Department of Industrial Training(DIT) is
required

9. Infrastructure Development
Roads, railways, seaports, airports, water, sanitation and telecommunications
•30 berths, 18m deep, 1000 acres
Lamu Port
•Serve Kenya, EAC, Southern Sudan, Ethiopia, Central Africa Republic, DR Congo, Congo
Brazzaville and Chad
•Largest port on the continent serving as a trans African Port
•Will also serve as a trade corridor to Juba after construction of standard gauge rail track
Lamu-Sudan- •Shortest distance to the sea for Southern Sudan. Objective to export oil from Sudan.
Ethiopia Record •Remote and dry Northern parts of Kenya to be opened for development. (Hola: irrigation;
Transport (LAPSSET) Wajir: cement deposits; Lamu West: titanium; Mwingi & Matuu : coal & iron ore deposits .
Corridor Project Lamu port to provide easy access to the mines for shipment.
•Isiolo: resort city , free economic zone; intersection point for the three corridor routes.
Ethiopia •Increased volume of Ethiopian goods transiting the ports in Kenya
•Reduction of transport and shipment costs between Kenya & Ethiopia
•Reduced transit time for imports and exports
•Promoting trade & regional integration and increasing intra-regional trade between
Ethiopia and Kenya
Modernization of •Reduce inter-regional freight transport costs from 45-15%
the EAC Railways •Meet increased transport demands that are projected to be in excess of 30 million
tonnes.
•Railway will be a high capacity and able to sustain trains hauling a minimum of 4,000 tons
traveling at an average speed of 120 km/h.

10. Infrastructure Development
Roads, railways, seaports, airports, water, sanitation and telecommunications
Airports and Resorts  International airports to be constructed in Lamu, Isiolo and Lokichogio; three
important centers along the new transport corridor, whichwill also be made resort
centers
 Upgrade of the existing Jomo Kenyatta International Airport
Oil Refinery  Oil refinery with a capacity to process 120,000 barrels per day to be constructed at
Lamu
 Refinery to refine crude oil from Southern Sudan and other parts of the East African
region.
Power Generation •Kenyan electricity producer, Kengen, opened its 15 billion public infrastructure bond
offer to investors in September 2009.
•Kengen received subscriptions worth 335 million, meaning the issue was oversubscribed
by 68 %
•Funds from the bond will be invested in generation of diverse sources of energy.
•80% of the capital will used in generation of thermal power
•20% will go to upgrade of hydo energy e.g. Tana River Delta power plants.

11. Vision 2030 Sample Projects
Development of five SME •Establishing processing parks in five strategic locations with raw materials hinterlands.
Parks •47 Constituency Industrial Development Centers one in each county have been identified
for upgrading to SME Parks.
Creation of Producer •To create 1000 to 1500 Producer Business Groups countrywide
Business Groups •PBGs at the producer level which will in turn feed large wholesale hubs principally in rural
areas. Catchment area is Central & Eastern provinces and a total number of 465 producer
business groups have been formed.
•Increased wholesale business activities and increased efficiency through sharing production
skills and resources will be achieved.
Building Tier Markets •Tier 1 retail market build
•Creation of jobs
•Increased economic activity in area
Deepening of Capital • Development of new products & services progress
Markets •A SME segment is being established at NSE
•A roundtable meeting held with Islamic community to chart way forward for development
of Sharia capital compliant market products
Development of Special •Will facilitate importation of necessary raw materials and exporting of finished goods
Economic Zones •Project will include agro-industrial zone incorporating activities such as blending and
packaging of fertilizers, teas and coffees, and a consolidated meat and fish processing facility
to encourage growth of offshore fishing.
Establish a major BPO park – •Establish a modern ICT Park in Nairobi with reputable local and International BPO suppliers
info City •Promote Kenya as a BPO services from Kenya globally
•Increase ICT talent pool to meet the increasing demand and provide a set of BPO specific
incentives to attract investments.

12. Case Study : ICT Sector
 Establishment of Kenya ICT Board in 2007 to advance the development of
the ICT sector and use ICT as an enabler in achievement of national
development
 Goal for Kenya to become a top 10 global ICT hub by 2030; a top 3 BPO
destination for Africa by 2012; and grow IT contribution to GDP from 3%
to more than 10% in 3 years via:
 Governance
 BPO/ITES ( create a sustainable environment for investment in
BPO/ITES
 Assume role of managing BPO parks
 Drive local industry development in ITES
 Communications Bill to liberalize IT sector and Data Protection Bill to
address IT and IP security
 Application of PPP framework to encourage joint ventures with local and
international invetors

13. National Optic Fibre Network has created
world class telecoms infrastructure
Terrestrial fibre network Undersea cables
Foreign
Name Owner/ operator landed terminal
Seacom ▪ Seacom Intl. June France
(65%) 2009 and
▪ Kenyan Egypt
Investor (35%)
Teams ▪ GOK (20%) Sept UAE
▪ Etisalat (15%) 2009
Nairobi
▪ Private
investors
(65%)
Eassy ▪ Development 2010 SA
Mombasa
Bank of SA
▪ World Bank
Central region
Coast & North Eastern region
Telkom Kenya network
Western region
9

14. Three fibre optic undersea cables _
Teams, SEACOM, and EASSY

15. ICT MNCs headquarters in Kenya

16. Digital Villages- Pasha Centres
 Creation of “electronic centres” and upgrading of existing e-centres
 Hubs that provide a host of services to the public via computers
connected to the internet, or by using and marketing other ICT-enabled
applications
 Kenya ICT Board will also provide technical support to successful PASHA
entrepreneurs
 An entrepreneur will obtain a loan from a local Bank for up to a maximum
of KES 3Mm to set-up or expand an existing digital access centre
 Kenya ICT Board will provide a technical consultant to support the
technical set up and management

17. Pasha cont’d…
 Branding and communication support in order to manage the
Pasha Brand and drive consumer interest and usage
 Management of the Pasha Community portal to allow collaboration and
knowledge sharing among Pasha Managers
 Continuous training and skills development for Pasha Owners
 Liaison with public sector and local and international content providers
who may want to access the public through the Pasha network

18. Tandaa- Development of National Digital Content
Strategy and Local Content development
 The Kenya ICT Board is Implementing a World Bank supported
Content Grant disbursement program to support entrepreneurs
in local content and applications development
 Specific focus to be given to software applications and e-
government products that can impact delivery of social services
and preserve culture
 A national campaign, TANDAA, has been launched to driving
national awareness and capacity building

19. KNET and Wezesha
 Support to universities through bandwidth purchase through
long term IRU on high capacity submarine fiber
 ‘Wezesha’ Is a Swahili word meaning ‘ to enable’ and is an
initiative is to provide a financial incentive towards purchasing
a laptop for registered university students in participating
public and private universities and colleges
 The laptop initiative is funded by the World Bank and
implemented by The Kenya ICT Board under the Kenya
Transparency and Communications Infrastructure Project
(TCIP), as part of a component to implement the Computers
for the Communities Initiative

20. The Government is actively stimulating the
private sector and the time to invest in Kenya is
NOW!