Nairobi, 4th, July 2022. H. E. President Uhuru Kenyatta today launched the Nairobi International Financial Centre (NIFC), a flagship initiative under the economic pillar of Kenya’s Vision 2030. NIFC is designed to strengthen the country’s global competitiveness by making it easier and more attractive to invest and conduct financial services, transactions, and related activities. NIFC aims to raise over $2 billion (Ksh 236 trillion) targeted incremental cumulative investments by 2030.
With technical assistance from the UK in its formative years, NIFC’s goal is to develop a more predictable and efficient business environment that encourages both domestic and foreign investment that would contribute to sustainable economic growth. The centre will target global and regional businesses that provide large pools of capital, drive innovation and are committed to the highest standards of Environmental, Social and Governance (ESG) performance. This includes private equity and venture capital firms, asset managers, insurance companies and financial services companies with a focus on fintech and green finance.
Nairobi is East Africa’s leading financial hub, providing an efficient gateway for investors and businesses to access 54 African countries, 1.3 billion people, and a combined GDP of $3.4trillion (Ksh 4 quadrillion). As the third-largest economy in sub-Saharan Africa, Kenya is already a vibrant commercial hub, with major global companies choosing to locate their regional headquarters in Nairobi. The capital is also a major continental tech hub earning its well-deserved moniker as ‘Africa’s Silicon Savannah’. – Its tech ecosystem hosts many innovation hubs and hundreds of start-ups.
The Centre aims to create opportunities to mobilise domestic and international savings and investments. It also looks to deepen employment in the financial services sector and related sectors. NIFC will seek to attract local companies that fit the participation criteria and create an environment that encourages proactive collaboration between local and international players.
Speaking at the launch, President Uhuru Kenyatta said: “The Nairobi International Financial Centre can play a key role in creating the right environment for fintech to thrive; for innovation and new technologies like blockchain and artificial intelligence to be mainstreamed; and for investors to inject new capital into businesses in Kenya and across the region. We all share the same goals in the pursuit of economic prosperity, and I call on the business community, policymakers and regulators alike, to work closely together to support the growth of businesses that create value and improve lives.”
NIFC Board Chair Vincent Rague said “NIFC will prioritize three key themes which include fintech, green finance, and attracting large pools of capital and multinational company headquarters. The NIFC Authority has been in discussions with Singapore-based global carbon exchange, AirCarbon Exchange (ACX), which seeks to set up a carbon exchange in Kenya. ACX has today signed a collaboration agreement with the Nairobi Securities Exchange (NSE) and the NIFC Authority. This will support the growth of climate finance in Kenya by establishing a locally accessible marketplace for carbon offsets.”
Kevin B. Iwanaga, President & COO, ACX Middle East/Africa said, “We are honoured to be collaborating with the NIFC Authority and the Nairobi Securities Exchange to jointly develop Kenya’s first Carbon Exchange. The Carbon Exchange will be an important element in Kenya’s sustainable finance ecosystem and will be instrumental in channelling global capital flows into Kenya’s high-impact environmental projects such as Reforestation, Land Restoration and new technologies such as DACS and BECCS. We look forward to collaborating with the NIFCA and NSE in this important and timely endeavour.”
To support Kenya’s growing fintech industry, The NIFC is committed to supporting and strengthening the Fintech Ecosystem and to enable innovative firms to establish and scale-up. In collaboration with the CityUK, and stakeholders from both Kenya and the UK, NIFC, has developed a diagnostic report on Kenya’s fintech policy and regulatory environment, and on funding mechanisms. The centre has also developed tools that would be useful for fintechs looking to scale their operations. This is just the beginning of the transformative and strategic action the NIFC is set to bring about.
Jane Marriott OBE, British High Commissioner said: “The UK-Kenya partnership continues to go from strength to strength, and I am happy to have witnessed this today as we launch the Nairobi International Financial Centre, which signed a memorandum of understanding to deepen collaboration with the City UK when President Kenyatta visited the UK last year. We look forward to unlocking new opportunities for UK and Kenyan businesses by strengthening links between Nairobi and the City of London.
NIFC has also signed an MoU with the Kenya Association of Manufacturers (KAM), to help increase financing and investment in the manufacturing sector in Kenya. The partnership is a testament to businesses that the NIFC is focused on attracting more private capital to support the local financing needs and those in the region.
The NIFC general regulations have been enacted and the initial set of tax incentive proposals have been passed. Companies operating a carbon market exchange or emission trading system under the NIFC will benefit from 15% corporate tax for the first 10 years of operation. Investor companies certified by the NIFC Authority and have invested a minimum of Ksh 5 billion will benefit from the certainty that the Capital Gains Tax applicable at the time they make their investments will remain unchanged during the lifetime of the investments.
The NIFC Authority is working closely with various government ministries and agencies to ensure efficient and timely service delivery is part of the Authority’s doing-business facilitation services. For instance, the team is working closely with the Department of Immigration Services (DIS) and the Kenya Revenue Authority to ensure the Centre’s needs are well catered as is expected in any globally competitive financial centre.
The Authority is in discussions with additional participants seeking to join the Centre and these will be announced in due course. Firms considering conducting business through the NIFC must apply for certification from the NIFC Authority. The NIFC Authority will provide a checklist of the required documentation and upon receipt will review and process all applications. Certification is open to both domestic and international firms as long as they meet the requirements.
About the Nairobi International Financial Center (NIFC)
NIFC is a flagship project under the Economic pillar of Kenya’s Vision 2030. The NIFC Act was passed in 2017, enabling the formation of the NIFC Authority. Detailed technical and legal work on the terms and conditions of the NIFC has been completed and its general regulations enacted.
The NIFC offers a progressive legal and regulatory framework, competitive financial and economic incentives, and a vibrant financial ecosystem – developed in collaboration with key stakeholders in the public and private spheres.
The NIFC Act, 2017 stipulates that NIFC firms are at a minimum entitled to:
The Centre aims to create opportunities to mobilise domestic and international savings and investments. It also looks to deepen employment in the financial services sector and related sectors. NIFC will seek to attract local companies that fit the participation criteria and create an environment that encourages proactive collaboration between local and international players.
In 2021, Prudential, an Asia and Africa-focused life insurer, submitted its letter of intent to join the center. In the same year, the company relocated its Africa headquarters from London to Nairobi to be closer to customers, partners, and distributors on the continent. The NIFC also signed a memorandum of understanding with TheCityUK, a body representing UK-based financial and related professional services.
Kenya is ranked 56th in the World Bank’s Ease of Doing Business 2020 index, which measures countries’ business activity regulations. Its score of 73.3 is significantly higher than the regional average of 51.61 and the establishment of the NIFC should see the country’s enhanced competitiveness reflected in future rankings.
Development of this financial centre has taken a lot of collaboration and support from both local and the United Kingdom through both financial and technical support. These include the National Treasury, Nairobi Securities Exchange, FSD Africa, FSD Kenya, City UK among others.
About AirCarbon Exchange (ACX)
AirCarbon Exchange (“ACX”) is a global exchange revolutionizing the voluntary carbon market. The Exchange’s client base comprises corporate entities, financial traders, carbon project developers and other industry stakeholders. ACX provides its clients with an efficient and transparent trading platform which is easy to use, frictionless and with the lowest commission fees available on the market. Its underlying technology will allow the carbon market to scale efficiently to meet the global ambitions of Net-Zero. ACX was recognized as the Best Carbon Exchange globally in Environmental Finance’s prestigious Voluntary Carbon Market Rankings 2021 – the largest and most closely watched survey of the world’s Voluntary Carbon Market. ACX was also named as the ‘Best Solution in Energy Trading’ by Wired UK and Publicis Sapient at their Global EnergyTech Awards, which spotlighted the companies that are ‘Winning the Race to Reinvent Energy’. For more information or to trade carbon, please reach out to info@aircarbon.co or visit www.aircarbon.co.
