The government though the Ministry of Industry, Trade and Cooperatives organized the Kenya Trade Week in July - a three-day event that brought together industry stakeholders to forge a path for the country's trade affairs. The event themed: Transforming Kenya into a Competitive Export-Led and Efficient Economy saw the launch of a comprehensive national trade policy to guide the country in its quest to become Africaâ€™s leading business hub. The past policies needed a review to bring them in line with the new dispensation of the Constitution and the changing trade patterns in the world. This came at a time Kenya is faced with a huge balance of trade deficit and the emerging threat of protectionism. Also, worth noting is the fact that Kenyans are buying more foreign goods and services than they are selling Kenyan goods to the several consumers who live outside of its borders.
So, what implications does the new National Trade Policy have on the real estate sector?
Policy Targeting Domestic Wholesale and Distribution Trade
The policy recognizes the pivotal role of distribution and wholesale including retail sub sector in the economy of Kenya. The sub-sector currently accounts for 15.7 percent of GDP and 10 percent of formal employment. While there are quite a number of categories, those that directly impact the real estate sector building material and supplies; forest products; apparels; machinery and equipment. The government intends to provide an enabling legal and regulatory environment to support the growth and development of the distribution and wholesale sub-sector. To this end, it anticipated that players in the real estate sector will have a wide variety of quality products being sold at competitive prices. However, to promote local manufacturers, it's expected that there will be a significant cut back on the imports of building material and supplies as the country adopts Buy Kenya, Build Kenya Strategy. The foreign building materials have been a major selling point for most property developers who are simply responding to Kenyans love for foreign made products rather their own.
Policy Targeting Retail Markets and Business Premises
The main policy objective is to promote, through collaboration with County government, investments in retail markets and business premises. In order to grow the retail markets and develop better business premises, the following policy measures will be pursued:
Promote proper county physical planning standards of retail business zones, backed by the economic feasibility of businesses, in all neighbourhoods in urban centers and along transport corridors, complete with supportive infrastructure, services and amenities; promote investments in business parks; and support provision of business incubation infrastructure with time limits to the traders among others. The result of these measures will see increased investment opportunities for developers operating in the commercial real estate segment. This will be facilitated by the government's law on public-private partnership that would see collaboration between commercial real estate developers and the various county governments in putting up retail markets and business premises across the country.
Policy Targeting Trade Infrastructure
To facilitate trade, the government in collaboration with the private sector will work to ensure the improvement and development of infrastructure. This will include expansion of transport and communication infrastructure to facilitate regional and international interconnectivity: establish a regional infrastructure development fund in collaboration with other partner states; expansion and modernisation of all ports of entry and exit; and, expand and maintain roads and railway networks. The government has embarked on a number of infrastructural programs including roads, energy, rail transport and Nairobi Metropolitan development programs among others. These infrastructure projects will spur development of new urban centers attracting more people which result to demand in housing. Therefore, infrastructure, in essence, is an enabler of real estate development.
Policy Targeting Trade Services
The government is also looking to promote the expansion of trade in services targeting the regional and global market through measures that ensure Kenya remains competitive in the trade in services arena in the global market. The services in real estate include: Architecture, Engineering, Quantity Survey, Land Survey, and Interior Design just but to mention a few. With this policy, it is anticipated that Kenyaâ€™s real estate service professionals will be able to export their services abroad.
The above are some of the policy intervention areas within the broader national trade policy that will directly impact the real estate sector. However, from a holistic view, the National Trade Policy will go a long way in boosting the business environment in the country.
The views expressed here are of the author and does not necessarily represent position of Sultan Palace Development Ltd and as such does not warranty any particulars. Click here to read our Terms & Conditions.