HK enterprises scout for opportunities in Kenya and Djibouti
Riding on the Belt and Road Initiative (BRI), Hong Kong-based enterprises are keenly eyeing investment opportunities in both Kenya and Djibouti.
A 12-member delegation representing 10 Hong Kong-based enterprises visited Djibouti and Kenya in August, where they held discussions with local enterprises, lobby groups and government representatives. The enterprises are looking to invest in banking, finance, manufacturing, real estate development, property development, construction, engineering services, and project investment among others, basically through joint ventures and partnerships with local companies.
Nicholas Kwan, director of research at Hong Kong Trade Development Council, said they are interested in investing in infrastructure and transport logistics in Djibouti. He termed Kenya and Djibouti as key entry points into Africa. Djibouti is strategically located in East Africa and serves as the regional transportation and logistics hub for landlocked countries in the region.
He said the delegation recognizes the importance of Kenya as a gateway to the rapidly developing region, with the country playing a significant role as a major logistics hub.
Daniel Lam, regional director of the Hong Kong Trade Development Council in Middle East and Africa, said they are keen to explore opportunities presented by Kenya's economic success stories through the BRI.
He said Hong Kong investors are in a position to provide some of the expertise and funding that can make Kenya's vision 2030 a reality.
"Kenya and Hong Kong are both important hubs for trade and commerce. Already, solid business ties exist between the two places," he said.
Lam said Kenya can capture the opportunities offered by the BRI through Hong Kong, which is well placed to be the commercial platform for the initiative.
In the first five months of 2019, Lam said exports from Hong Kong to Kenya grew by 120 percent to $103 million, while bilateral trade rose by 68 percent.
Moses Ikiara, the managing director of the Kenya Investment Authority, affirmed the country has numerous investment opportunities which Hong Kong enterprises can take advantage of, especially the government's big four agenda that focuses on manufacturing, food security, affordable housing, and universal health coverage. Noting that 90 percent of the fabric used in Kenya is imported, Ikiara said there is a great opportunity for import substitution through local production like cotton processing and ginning industries as well as textile mills and apparel manufacturing within special economic zones.
Other opportunities exist in leather processing, manufacture of construction materials and equipment, agro-processing and heavy industries. On the provision of affordable housing, Ikiara said the government is looking at developing 500,000 houses as well as doubling the GDP contribution of real estate and construction to 14 percent by 2022. He said Kenya has a deficit of 250,000 housing units annually.
"The low-cost housing agenda seeks to address the acute shortage by cutting construction costs through use of innovative technologies, reducing mortgage cost, and raising low-cost funds from private and public sectors for investment in largescale housing construction," he explained.
Ikiara said developers of 100 low cost residential units and above will enjoy 15 percent corporate tax.
On universal healthcare coverage, opportunities lie in enhancing low cost private insurance coverage and schemes, private healthcare facilities and services, provision of medical commodities and equipment. This is in addition to digitization of healthcare and provision and implementation of alternative financing.
Betty Maina, the principal secretary of the State Department of Investment and Industry, assured the Hong Kong investors that Kenya will continue to be an open economy with a business friendly environment.
She said her ministry will strive to make the country the preferred investment destination and one of the most globally competitive trading nations in the world.