Kenya has over time proved to be the preferred investment point in the East African region due to its strategic location and free market economy which places no significant restriction on the movement of foreign currency in and out of the market.
Kenya
KTK Advocates
Authors: Donald B. Kipkorir (Bio), Victoria M. Mbithi (Bio), Kennedy Abuga (Bio)
1. What attributes does Kenya have that makes it a unique investment destination?
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The market, says one local lawyer, continues to focus on individuals
rather than firms and on this basis the top five firms are barely
separable. Market star lawyers include Karim Anjarwalla of Anjarwalla
& Khanna, Oliver Fowler of Kaplan & Stratton, Richard Harney and
Philip Coulson of Coulson & Harney, Michael Kontos of Walker Kontos
and Paras Shah of Hamilton Harrison & Matthews....
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The market, says one local lawyer, continues to focus on individuals
rather than firms and on this basis the top five firms are barely
separable. Market star lawyers include Karim Anjarwalla of Anjarwalla
& Khanna, Oliver Fowler of Kaplan & Stratton, Richard Harney and
Philip Coulson of Coulson & Harney, Michael Kontos of Walker Kontos
and Paras Shah of Hamilton Harrison & Matthews.
"There is no concept of firm brand, people choose partners and in
Kenya you deal with individuals and not firms," says a lawyer. However,
in 2011/2012 almost all the firms grew in number and there are an
increasing amount of names emerging from the pool of junior partners and
senior associates and clients appreciate this. In terms of trends,
firms have also been increasing their capacity in-house as well as
extending their reach across the East African region, either through
networks such as Anjarwalla & Khanna's ALN (Africa Legal Network)
and the Bowman Gilfillan Africa Group, among others, of through other
formal or informal networks.
Lastly, recent rules have opened up the Kenyan legal sector. As one
lawyer explains, a rule change "snuck into a miscellaneous bill as an
amendment to the Advocates Act that means that lawyers who are qualified
for five years in a commonwealth country will be able to practice in
Kenya, and the Law Society is looking for other countries to
reciprocate". Given this however, there is no expectation that foreign
firms will establish in the country anytime in the near future, despite
their increased presence in the market.
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CONTEXT AND TRENDS
A mixed picture emerges from the Kenyan market and this is reflected to a certain extent in one partner's verdict on 2012. "The first half of 2012 was excellent, however there is a lot of apprehension in the country as we have elections approaching and the 2007 elections weren't good, there are security problems, and we have inflation and economic issues to tackle"....
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CONTEXT AND TRENDS
A mixed picture emerges from the Kenyan market and this is reflected to a certain extent in one partner's verdict on 2012. "The first half of 2012 was excellent, however there is a lot of apprehension in the country as we have elections approaching and the 2007 elections weren't good, there are security problems, and we have inflation and economic issues to tackle".
Firms note that there is an increase in interest from foreign investors in the country with "a lot coming into the market on the commercial side: UK companies, manufacturing, beauty products, and we are starting to see more private equity in fibre optics and medical space for example," says a lawyer. Another adds that there have been "more enquiries into the energy sector and people have been exploring possibilities in petroleum distribution and exploration and in power projects". "They are biting that cherry," adds the lawyer.
There has also been a marked presence of Chinese financing through the China Development Bank, as well as large corporate financings notably into the downstream oil sector.
Another interesting area has been the capital markets. Firms generally report a slow year for equities in 2011 but 2012 has seen what one partner calls a "rebirth". For instance, the market saw the largest rights issue ever when Kenya Airlines made its offering, although the national carrier missed its revenue target on the issue. "Since January 2012 we have seen a 40% growth of prices in the stock exchange and the trading volume is rising; banks and financial companies have been doing tremendously well in the last three years," explains a partner.
Other areas of activity have been real estate and construction, driven in part by a deficit of housing. Firms note that the bigger developers have been active, although high interests rates, in place to combat inflation, have made access to mortgages and credit difficult.
On the legislative side, the new Constitution of 2010 has engendered a series of legal developments. The Competition Act is now in place with a competition authority that has been getting the thumbs up from lawyers; new laws on money laundering and capital markets reforms are also being discusses, as well as developments relating to real estate investment trusts (REITS). The recent Land Law has also been one of the key talking points and should "lead to more transparency and efficiency," says a lawyer.
MAJOR LATERAL HIRES
Rubeena Dar
From: Daly & Figgis
To: Retirement
MAJOR LEGISLATION CHANGES
Advocates Act (amendments)
Effective 2012
Competition Act
Effective 2012
Land Act: Land Registry Act; Land Commission Act
Effective 2012
Real Estate Investment Trusts (REITS)
Legislation being drafted
RISING STARS
Coulson Harney
Angela Waki
Joyce Karanja
Kaplan & Stratton
Mahesh Acharya
Binti Shah
Daly & Figgis
Joseph Ngangira
Hamilton Harrison & Mathews (HHM)
Andrew Mugambi
Daniel Wanjau
Walker Kontos
Alexandra Kontos
Deepen Shah
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