The US Department of State has flagged lengthy bureaucracy as one of the major hurdles hurting the entry of foreign investors into Kenya.
The lengthy approval process for visas and work permits is linked to the expansion of requirements needed to qualify for work permits and special passes in the last 10 years.
Entry hitches for foreign investors hampers Kenya’s efforts to address the unemployment crisis given the critical role that foreign firms have in creating jobs locally.
Foreign investors must get work permits to operate in Kenya if they intend to work and manage their business in the country.
The department added that the clearance process is also exposed to corruption, bringing to the fore one of the biggest problems hurting the entry of foreign investors into Kenya.
Multinationals are a key part of the country’s economy with notable presence in the energy, manufacturing and agricultural sectors.
Kenya hosts over 200 multinationals that have employed more than 200,000 Kenyans, underscoring their importance in providing in an economy struggling to create formal jobs to absorb thousands of new university and college graduates every year.
Besides a lengthy clearance process, foreign investors also grapple with a tough operating environment characterised by heavy taxation and costly electricity. Kenya’s electricity prices are some of the highest in Africa, which damages the country’s ability to attract and keep manufacturing companies that have the option of shifting to competing economies such as Egypt and Ethiopia.
American firms are one of the most critical pillars underpinning Kenya’s development agenda, with deep focus on healthcare and water services.
But the influence was hit last year following the decision by the administration of Donald Trump to discontinue high -value projects in the country.
The US government early this year issued notices terminating more than Sh108.34 billion worth of contracts and grants to programmes it funds through the United States Agency for International Development.