Wednesday, 15 February 2012

Kenya rated second best investment destination in Africa

Kenya has been rated top frontier investment market in Africa, second only to Nigeria, in a survey conducted by the Economist Intelligence Unit (EIU.

The survey sampled 158 international fund managers and investment bankers. Of these 76 (48%) rated Kenya as offering the best prospects for institutional investors over the next five years.

The other 81 (52%) said Nigeria was better. The survey is set to generate renewed international investor interest in the stock market, stemming the sell tide sparked off by the Crisis in Eurozone. The market capitalisation has shed off 28 per cent so far.

The survey showed a shift to long-term investment strategies from more speculative and short-term bets. A third of the respondents said they will invest at least five per cent of their portfolio in Africa. This new finding is in sync with our earlier report that said Africa is the next best investment destination. See

 This comes as good news for Kenya that is now seeking a huge pile of cash to build infrastructure. The country needs more than US $44 billion in the next five- to -eight years to build new ports, roads and railways and to improve water and electricity supply.

 To sweeten the deal, Kenya will next month table for debate in Parliament a PPP, said Joseph Kinyua, permanent secretary at the Treasury. The bill will clarify the legal basis for Public-private partnerships, PPPs, and streamline the contracts.

Kinyua told a meeting of government departments and private sector representatives that the Treasury would raise some funds for these projects from the private sector.

"It is currently estimated that there is a funding gap of approximately $44 billion that is needed to address the infrastructure requirements in the next five to eight years," he said.

"The PPP (Public-Private Partnership) arrangements, therefore, offer an opportunity for Kenya to attract enhanced private sector participation in financing, building and operating infrastructure services and facilities in order to close this huge funding gap."

Kenya’s development Blue-Print - the Vision 2030 - forecasts the economy to grow by 10 percent a year by 2030. The government project that the country will become a middle-income country by 2030. Infrastructure development is the driver of this ambitious plan.

In its 2011/12 (July-June) fiscal budget, the government proposed to raise 35.85 billion shillings ($432.7 million) in infrastructure bonds, up from 30.5 billion shillings the previous year.

The government is also in the process of getting a $600 million two-year syndicated international loan to finance infrastructure development. 

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