Treasury to pick city agency board
The Treasury is seeking to recruit board members for Nairobi International Financial Centre Authority, the agency mandated to support the transformation of Nairobi into a financial hub. Kenya kicked off efforts to transform Nairobi into a financial centre like Dubai or Mauritius over a decade ago. The agency is expected to help attract large foreign financial firms and boost capital flows by putting in place laws and favourable conditions for the financial services industry.“To entrench Kenya’s position as a regional financial hub, the Government will fast- track the operationalisation of Nairobi International Financial Centre (NIFC),” Treasury secretary Henry Rotich says in the 2019/2020 Budget Policy Statement (BPS).“Towards this end, the Government is in the process of forming a Board of Directors that will oversee the operations of the NIFC Authority.”Mr Rotich said the Treasury will also establish rules to guide the formation of financial hub to operationise the NIFC Act.It is expected that by becoming a hub, Nairobi will increase employment in financial services by attracting international capital issuers and investors to the country.However, experts say Kenya must distinguish itself with an area of expertise if the efforts are to succeed.“Given the level of already-established international competition (and one might say, the proximity of other, already-established centres), it is difficult to see where Kenya’s specific competitive strengths might lie,” Razia Khan, chief economist Africa at Standard Chartered Bank said in an earlier interview.
Ms Khan said while the plans are ambitious, implementation is going to be important.“How does Kenya succeed in this project given the already-established competition, and the fact that global regulation is moving in a direction where the traditional strength of international financial centres are increasingly questioned?” she posed.Analysts however say Nairobi has already established itself as a sophisticated forex market and this could mark its competitive advantage. But they agree the legal framework is critical for the business.“Whichever model is adopted, the realisation of the NIFC objectives will depend, to an extent, on the creation of sound legal systems, sophisticated infrastructure, favourable tax rates and liberal regulation.”The NIFC Act says a person who intends to operate as an NIFC firm shall apply to the NIFC Authority, in the prescribed form so as to be considered.Successful global financial centres include Kuwait Financial Centre and Qatar Financial Centre.