Technical Support to DFID Kenya: Investment Climate Reform Scoping Mission

BERF carried out an Investment Climate Reform Scoping Mission in April 2016 to Nairobi, Kenya to provide support to the DFID Country Office and Government of Kenya under 3 main areas:

  • Road Map for Business Environment Reform:  High level Road Map with the view to supporting the business case for a successor to an ongoing Investment Climate Reform programme in country.

  • Support for Creative Economy:  Creative Economy Business Environment Reform diagnostic assessment.

  • Support to Industrialisation and Export Strategy:  Diagnostic assessment of Business Environment Reform issues in relation to the Government’s industrialisation and export strategy.

The Scoping team consulted with DFID-Kenya Private Sector Development team, key stakeholders in government –including Ministry of Industry, Investment and Trade and Ministry of Sports, Culture and the Arts and a selected number of other stakeholders in order to gauge (i) the current BER agenda across government, and (ii) to understand existing support being provided by DFID-Kenya and its future Business Environment programming.

Key findings and recommendations for continued support in the next phase are outlined below:

Road Map for Business Environment Reform

With the current investment climate programme drawing to an end, DFID-Kenya now has the opportunity to consider a number of important and inter related questions when appraising the long list of options to future investment climate reform. Key among those, as identified in this scoping mission include:

  • What investment climate reforms will best deliver important changes to the target groups under the Operational Plan?

  • What approach to business environment reform will most effectively deliver important changes to the target group in DFID-Kenya’s Operational Plan?

  • What approach to business environment reform will provide DFID-Kenya the space to phase out support to business environment reform over time?

BERF can support DFID-Kenya in more formally identifying and assessing a long list of options for future programming. This phase of work will require close consultation with the Government of Kenya, including at the County level, and other donors.

Support for Creative Economy

Policy interest in the cultural, or creative, economy in Kenya is growing, in particular with regard to the employment opportunities the sector potentially offers to Kenya’s youth.

The key short-term business environment priority for the government is to get the sector organised for dialogue with government to be able to shape a coherent and effective policy. A key concern of government is ensuring they gain a holistic vision of the sector, and not just those of special interest groups.

The primary area for BERF support emerging from the scoping work is supporting the Department of Culture in undertaking a public-private sector dialogue process. The aim is to consult across the industry sub-sectors, including strong participation from County stakeholders. Central to this assessment will be the evidencing of business environment constraints to support a prioritisation of reforms.

Support to Industrialisation and Export Strategy

Kenya’s Industrial Transformation Programme was launched in September 2015 and is anchored within the Ministry of Industry, Investments and Trade. The Programme aspires to grow the share of Kenya’s manufacturing sector from the current 10 per cent to 15 per cent in the medium term.

The Ministry is keen on solidifying gains made in the last year and was able to articulate some key issues to address going forward. There is an opportunity for BERF to support the next stage of business environment reforms being led by the Ministry based on the Business Environment Reform priority issues identified by the Ministry.

The first priority area identified is the provision of technical assistance by BERF to the Ministry of Industrialisation to assist in the technical review and prioritisation of the National and County level Business Environment Reform reforms that act as a constraint on County economic development.

In addition it is recommended that BERF provide technical assistance to the trade division of the Ministry to assist in identifying priority sector Business Environment Reform issues to be incorporated in the Ministry’s refreshed export strategy and taking forward the County level Business Environment Reform agenda. This new export strategy needs to reflect the Business Environment Reform constraints impacting on exporters and continue private sector dialogue to prioritise reforms.

Based on the scoping stage discussions and assessment, a second phase is currently being designed to provide more focused support to the Government of Kenya and DFID-Kenya.