Kenya Vision 2030 had set a target of expanding the manufacturing sector to increase its contribution to Gross Domestic Product (GDP), through additional investments, from 9.2 percent in 2017 to 15 percent in 2022 and increasing agro-processing to at least 50 percent of total agricultural production. This was not achieved as the contribution of the manufacturing sector to GDP continued to decline to 8.7 percent in 2018 to 7.2 percent in 2021 and agro-processing reduced to 27 percent of the total agricultural production during the same period.
The Executive Order No. 1 of 2020, established Department of Business Reforms and Transformation (DBRT) under the State Department for East African Community (EAC) in the Ministry of East African Community & Regional Development to facilitate and enhance the Ease of Doing Business in Kenya (EDBK) programme. This was previously undertaken under the State Department for Industrialization in June 2018. Kenya performed well under the World Bank’s Annual Doing Business Reports improving by 80 places from position 136 (2014) to position 56 (2019). However, despite the good performance of the Ease of Doing Business programme, investments stood at 20.3 percent of GDP below the target of 25 percent of GDP.
In order to enhance both domestic direct investments and foreign direct investments so as to improve the business and investment environment, as prioritized in the Bottom-Up Economic Transformation Agenda (BETA) 2022-2027, the government established the State Department for Investments Promotion through Executive Order No. 1 of 2023.
Functions of the State Department include:
- Development and Implementation of Investment policy and strategy;
- Promote, both locally and internationally, the opportunities for investment in Kenya;
- Promotion and Oversight of the Development of Special Economic Zones, Export Processing Zones and Industrial Parks;
- Coordinating the transformation of the ecosystem supporting private sector development;
- Development of a business reform agenda across the entirety of Government;
- Championing automation and re-engineering Government business and services processes;
- Driving legislative and regulatory reform on the ease of doing business and business transformation;
- Coordination of engagements with the private sector/business community in respect to business climate and business transformation;
- Monitoring the implementation of business climate reforms as recommended by key international partners, notably:
- The World Bank;
- The World Economic Forum;
- The Global Investment Forum; and
- The international bodies and indices and,
- Creating public awareness of reforms in the business climate and ease of doing business.