Kenya Aims to Build Financial Center, Compete With South Africa

Kenya plans to build a financial center in the capital, Nairobi, to help create jobs and make it easier to raise funds for projects such as an oil pipeline from Southern Sudan, Finance Ministry officials said.

The proposed Nairobi International Financial Centre will become a regional “offshore” financial services hub, Alex Owino, a project manager at the ministry, told reporters today in the city. He didn’t give details on how Kenya planned to attract companies to the industry.

Kenya aims to gain a stronger presence in sub-Saharan Africa’s growing financial services market, at present dominated by Johannesburg, South Africa and Mauritius, Owino said. The finance industry accounts for 5.4 percent of Kenya’s gross domestic product, the fifth biggest contributor, and has the potential to expand to as much as 15 percent of GDP, Finance Minister Uhuru Kenyatta said at the same event today.

Investment groups, stock brokerages, pension funds, banks and insurance companies may set up offices at the proposed center on the promise of financial incentives and to get an entry point into the East African region, he said.

A steering committee formed to draft plans to establish a financial service law, modernize the legal system and ease restrictions on investments began meeting today, Kenyatta said. Its members include Kenyan Central Bank Governor Njuguna Ndung’u and the permanent secretary in the Planning Ministry, Edward Sambili.

The project will be modeled on the Qatar Financial Center and Ireland’s International Financial Services Center, Owino said.

Authorities in Juba, the capital of Southern Sudan, and Kenya have been in talks with Toyota East Africa to build an oil pipeline to Kenya’s Lamu port, north of Mombasa. In September, Kenya called for international bids for construction of the Lamu port as part of a plan to open up a transportation corridor that will also serve Ethiopia and Southern Sudan.

Kenya’s $30 billion economy is East Africa’s biggest.

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