The World Bank Doing Business Report (2013) ranked Kenya 129th
out of 189 countries, which is a decrease of 7 positions from the previous year.
Paying taxes, getting electricity, registering a property, and starting a
business have remained time-consuming and costly. Kenya restricts foreign
ownership in more sectors than other Sub-Saharan African countries. For example,
foreign capital participation in telecommunications is limited to a maximum of
70 per cent. In the transportation sector, foreign investment is allowed only up
to 50 per cent in railway freight, port and airport operations (World Bank
2010). On the other hand, the government has introduced private sector led
reform and several incentives are provided for both domestic and foreign private
investment. The government's export promotion programs do not distinguish
between local and foreign-owned goods (U.S. Department of State 2013).
Nevertheless, Kenya receives less long-term foreign investment inflows than any
other EAC member country (African Development Bank Group 2013). The weakness of
the judicial dispute resolution, and other cumbersome compliance items besides
the high cost of doing business, have discouraged investment.
|The Business Environment: Doing Business