Kenya’s Ministry of finance is gearing up to establish plausible laws once and for all. In an effort to gain the interest of foreign investors — who otherwise look to Mauritius to solidify large bonds and investments — the East African gateway country is looking to become a financial hub for the entire continent, Independent Online reported.
Expediting and creating arbitrary panels for financial disputes is one way Kenya plans to place their economy on the right track.
“We are going to work with the City of London to ensure that we address any gaps that we have in our legal system to bring it in line with international best practice,” Ministry of Finance economic secretary Geoffrey Mwau said in the report.
Commercial investors and traders who have a dispute in Mauritius have the luxury of appealing to Britain’s Privy council, according to Independent Online.
“Why would you go to Mauritius when you are a Kenyan company to list a debt security? You do it because they are efficient and we are not,” Kaplan and Stratton law firm partner Oliver Fowler said.
Though Kenya would like to become a leader of the international market, experts are not sure the country is strong enough to make the transition.
“To pitch itself against the international competition at the outset may be difficult,” Razia Khan, Standard Chartered head of research for Africa said in the report, which noted that Kenya and Nigeria are tied in 139th place on Transparency International’s 2012 corruption perception index. Mauritius sits at number 43, which almost 100 spots ahead of Kenya is an ideal ranking.
Nonetheless major international banks have begun to open offices in Nairobi. In addition, the Nairobi Securities Exchange is up and running, though reforms to make the local listing process easier have not been enacted.
Independent Online also noted that Kenya has yet to implement double taxation avoidance agreements that have been signed by Uganda and Tanzania.