The State Department for Industrialization, together with KenInvest and the Embassy of Japan in Kenya, organized the 3rd Kenya Business Dialogue in Nairobi, Kenya on Friday, 22nd July, 2022. The Business Dialogue brought together representatives from Japan Embassy in Kenya, Japan External Trade Organization (JETRO), JICA, Japanese Business Association in Kenya, State Department for Industrialization, State Department for Trade, Ministry of Foreign Affairs, KenInvest, KRA, KEBS, SEZA, KEPHIS, KAM, KEPSA and KNCCI.
The Business Dialogue, hosted by the Principal Secretary State Department of Industrialization, was co-chaired by KenInvest Ag. Managing Director, Ms. Olivia Rachier and the Japan Deputy Ambassador to Kenya, Mr. Yasuhisa Kitagawa. This is the third of such Business Dialogues, following two successful ones held in 2019 and 2020 respectively. Mooted in 2018, the main objective of these dialogues is to improve the Business Environment in countries where Japanese companies do business through identification of challenges which have remained barriers for the expansion and formulation of an action plan to resolve such challenges. This particular meeting was convened as an information sharing session to address the specific progress and challenges in the development of Dongo Kundu SEZ (DKSEZ) and other challenges in doing business in Kenya.
In his welcoming remarks, Amb. Kirimi Kaberia, CBS, PS for Industrialization, noted that Kenya and Japan enjoy a cordial relationship which will be celebrating its diamond jubilee next year. He commended the collaboration, that has resulted in major infrastructural development, increasing foreign direct investment as well as industrial acceleration, case in point being the development of the Dongo Kundu Special Economic Zone. He also noted that the meeting was to serve as a milestone in ongoing engagements aimed at realizing the late former Prime Minister of Japan H.E. Shinzo Abe’s commitment that “Japan will work hand in hand with Africa to realise the African dream.”
During the discussions, Special Economic Zone Authority Ag. CEO, Dr. Meshack Kimeu, acknowledged the need for EAC to incorporate and recognize Special Economic Zones in customs management. Currently, the East Africa Community Customs Management Act does not recognize Special Economic Zones, which has made it difficult in guaranteeing the ease of doing business that comes with these zones. Nevertheless, multilateral efforts are underway to ensure that goods produced in SEZs are not unduly overly taxed when they are to be sold within the region. In addition, Dr. Kimeu reiterated that the Authority has also put in place guidelines with KRA that will see investors in the special economic zones import their raw materials and machinery duty free.
He encouraged investors to make use of the One Stop Centre at KenInvest to help solve some of the bottlenecks with regards to investments. In addition, he revealed that currently there is ongoing talks in Accra, Ghana to discuss mechanisms of recognizing goods manufactured within the Special Economic Zones in Africa through issuance of a certificate of origin under AfCFTA.
The Acting CEO for Kenya Association of Manufacturers, Mr. Tobias Olando lauded the effort that has been put in place by the Government in solving issues that were earlier raised during the first and second dialogue by the Japanese business community in Kenya. Some of the bottlenecks identified while doing business in Kenya included: Improvement of procedures related to Pre-Export Verification of Conformity (PVoC) and customs clearance procedures: Clarification of criteria for setting Declared Value for imported goods; Improvement of issuance procedure of Work Permit; and Container transportation by SGR between Mombasa and ICD of Embakasi.
In his remarks, Mr. Kitagawa, the Chargé D’affaires a.i. of Japan, said, “I hope that we will be able to confirm our common goal in order to create a much better and efficient SEZ. If there is anything the Japanese Government can do to assist, please do not hesitate to contact us at any time”. In his closing remarks, he also mentioned the following intervention; “Japan is always in the ‘passenger seat’ and can teach Kenyan side how to drive and maintain the car. On the other hand, the Kenyan side is always in the driver’s seat and is the only one who can operate the steering wheel and adjust the accelerator. We look forward to more initiatives from the Kenyan side and to continue to provide a forum for constructive exchange of views on SEZs.”
Further, Mr. Kitagawa confirmed that some lasting solutions on the immigration process and container transportation by SGR between Mombasa and ICD Embakasi had been achieved and solutions of the other two challenges are aggressively being sought. He noted that these interventions had seen the number of Japanese companies in Kenya double in number from 41 companies in 2016 to more than 100 companies today.
During the discussions, Mr. Hajime Iwama, Chief Representative, Japan International Corporation Agency (JICA) explained, that there is steady progress in the development of roads and other infrastructure in DKSEZ in Mombasa. At the same time, Japanese Private Sector (the Japanese Business Association in Kenya) have requested the Kenya Government to improve certain procedures in the SEZ to improve the ease of doing business in Kenya.
In her remarks the Ag. MD of KenInvest Ms. Olivia Rachier said that Kenya is among top reformists in the continent and top ten in the world and assured that KenInvest will continue giving world class facilitation to Japanese and other investors in the Country. She urged Japanese investors to register with KenInvest and make use of the facilitation services in the One Stop Centre as well as take advantage of their Aftercare services which would enable any policy issues be resolved expeditiously.