The East Africa Venture Capital Association (EAVCA) says Kenya is well placed to continue attracting private capital to finance bankable public projects currently in the pipeline.
According to the EAVCA Chairman David Owino, the regional landscape is remains attractive for private equity and venture capital flow despite uncertainties in the global economy.
“There are a lot of amendments on businesses tax regime, regulations through the central bank that have been proposed. These things are actually creating noise in the environment. Remember private equity does not only do equity investment, we also do private debt. If regulations are passed in such a way that it limits international flows in form of debt into the country, it is not good for us,” said Oduor
In the wake of US tariffs which are being projected to stifle venture capital flow especially to the startup ecosystem, Owino says stable regulatory environment will sustain growth of local investment riding on available skilled youthful population.
“In fact for us who are local what we are pushing for money out there to come and catalyze these opportunities. We have money in pension funds, money managers are coming up and even Saccos then we will not have to rely on global flows. We will have our internal flows that would make sense.
Speaking during the EAVCA 9th Annual Private Capital Conference in Nairobi, National Treasury and Economic Planning Cabinet Secretary John Mbadi said the government has rolled out various incentives through the Nairobi International Finance Corporation (NIFC) to attract local and foreign investments and position Kenya as a regional financial hub.
These include a 15pc corporate tax rate for carbon exchange firms, a 5pc capital gains tax for firms investing at least Ksh 3 billion in Kenya, preferential tax rates for start-ups and regional headquarters, and exemption from withholding tax on dividends where companies reinvest at least Ksh 250 million.
“We are talking about how private investment can come in through capital mobilization to support private sector, other initiatives, including private investment through PPPs and also in supporting the private sector by injecting private capital and that would help in growing the economy. We have seen progress especially after we go NIFC working and Kenya leading in the region with depended financial sector in the region, said Mbadi.
According to an earlier report by the association, in the first half of this year, disclosed transaction values dropped by a massive 66pc in the first quarter of the year to $1.6 billion, from $4.7 billion in the previous quarter and below the $2.9 billion recorded in Q1 2024.
