Full in-tray for Lee Kinyanjui in crucial Trade docket
Former Nakuru governor Lee Kinyanjui has been nominated as Cabinet Secretary for Investment, Trade and Industry.
What you need to know:
- The ministry has faced challenges, particularly as multinational companies exit the Kenyan market, citing increased taxation and economic uncertainty
- Mr Kinyanjui has exuded confidence that he will tackle the challenges facing the ministry, enhance trade and facilitate industrial growth
Investment, Trade and Industry Cabinet Secretary Lee Kinyanjui has his work cut out after the National Assembly approved his nomination on Thursday.
Mr Kinyanjui and his two counterparts, Mutahi Kagwe (Agriculture) and William Kabogo (ICT) received the nod from Parliament on Thursday, setting the stage for their swearing-in.
The former Nakuru governor was nominated by President William Ruto on December 19, 2024, to the critical docket to replace Salim Mvurya who was re-assigned to the Ministry of Sports.
Current Tourism Cabinet Secretary Rebecca Miano also served in the docket that was first held by Moses Kuria, now serving as a senior advisor of the President.
Mr Kinyanjui will now be in charge of the ministry that is crucial for promoting and facilitating domestic and foreign investments, as well as pursuing President Ruto's flagship industrial development initiatives and providing an enabling business environment in the country.
The former governor has exuded confidence that he will tackle the challenges facing the ministry, enhance trade and facilitate industrial growth.
"I have worked as a Member of Parliament, governor and assistant minister and l am confident l will bring the desired change in the ministry,”said Mr Kinyanjui.
As Nakuru governor, Mr Kinyanjui is praised for spearheading the elevation of Nakuru municipality into a city.
He also initiated mega projects, including the construction of Level 4 hospitals across the county, upgrade of 73-year-old Afraha Stadium, rehabilitation of major roads through the Boresha Barabara Programme, among others.
The former Nakuru Governor hopes to apply the experience he has amassed while serving as governor, assistant minister and MP, to address challenges in the ministry.
The ministry has faced challenges, particularly as multinational companies have exited the Kenyan market, citing increased taxation and economic uncertainty.
Mr Kinyanjui will now face the daunting task of taming the exits of multinational companies from the country, as well as providing a conducive business environment.
Prominent companies such as GlaxoSmithKline, Game Stores, Betin, and Shoprite have ceased their operations in Kenya, citing a range of issues from regulatory challenges to high operational costs.
Also since the start of the year, 10 betting firms have exited the country.
They include; Betsafe which closed shop in May, citing heavy taxation that it said made operations in the industry difficult.
These departures have raised significant concerns about the country's economic stability, highlighting the urgent need for strategic action to make Kenya a more attractive destination for foreign investment and to prevent further exits.
Business environment
According to Mr Njuguna Kamau, from the East Africa Chamber of Commerce and Industry, one of the most critical steps Kenya must take to avoid such exits, is to enhance the ease of doing business.
"While Kenya has made some progress in this area, more can be done to simplify regulations, reduce bureaucratic hurdles, and improve government services. A more business-friendly environment would not only encourage existing multinationals to stay but also attract new ones,” said Mr Kamau.
"Countries like Rwanda have made consistent improvement in the World Bank’s Ease of Doing Business rankings, which is a testament to the positive impact that regulatory reforms can have on attracting and retaining foreign investments. By adopting similar reforms, Kenya can create a more conducive environment for business growth,” he added.
With his rich background, Mr Kinyanjui will also be expected to address tax and fiscal policies to create a more predictable and stable environment for businesses.
Multinationals have always expressed concerns over unpredictable tax regimes and the high cost of compliance.
Also top on the list, will be to revive the stalled construction of the 18 County Aggregation and Industrial Parks (CAIPS) across the country, which the government intends to leverage on, to spur the country's economic growth.
According to President William Ruto, in the long run, his administration aims to have an industrial park in every county, in line with the government's bottom-up economic transformation agenda.
The construction of CAIPS is expected to grow manufacturing and investments, through agro-industries and enhance productivity of the agriculture sector as well as create employment opportunities in the country.
Before he was axed from cabinet, former cabinet secretary Moses Kuria traversed various parts of the country, to launch the County Aggregation and Industrial Parks, heralding a new era of economic development and job creation.
However, the government's ambitious bid to establish the county aggregation industrial parks in the 18 counties, has been derailed by delayed disbursement of Sh 4.5billion, part of the funds set aside for their construction.
The government bets that the Sh 25billion parks will help boost industrialization, spur economic growth, as well as create more job opportunities for Kenyans, in the devolved units.
Currently, the projects face uncertainty.
On Sunday, December 22, Mr Kuria, now serving as a senior advisor to the president, expressed hope that Mr Kinyanjui, would revitalize the ministry.
"After the efforts of Rebecca Miami and Salim Mvurya hope Lee Kinyanjui will make a difference in the Ministry of Investment, Trade and Industry, “stated Kuria.
"He has to revive the industrial parks which are dead. The Special Economic Zones are also dead. Manufacturing is down to about 6 percent of the GDP and foreign direct investments at their lowest in 20 years, “Kuria further stated.
Recently, it emerged that funds set aside to help kick start the construction of the parks, were yet to be disbursed by the Treasury, despite being approved by the National Assembly.
The revelations emerged when Treasury Director General in charge of Accounting Services Bernard Ndung'u appeared before the National Assembly Committee on Trade, Industry and Cooperatives chaired by Embakasi North lawmaker James Gakuya.
Mr Ndung'u was hard pressed to explain why the Sh 4.5billion was yet to be disbursed by Treasury for the projects.
The construction of the parks also faces delays due to disputes over parcels of land set aside for the projects in some counties like Nakuru.
In 2023, President Ruto's administration, through the Ministry of Investments, Trade and Industry and the Council of Governors (COG), kicked off the plans to establish the industrial parks in 18 counties, before the projects are rolled out in the 47 counties.
The beneficiary counties include: Busia, Embu, Garissa, Homa Bay, Kirinyaga, Meru, Mombasa, Murang'a, Nakuru, Nandi, Nyamira, Siaya, Uasin Gishu, Migori, Kiambu, Trans Nzoia, Machakos and Bungoma.
According to the Council of Governors chairperson Anne Waiguru, the national government is supposed to contribute Sh250 million, while the devolved units will match with the same amount, towards the construction of the industrial parks.
Already, some of the counties have set aside more than Sh100 million for the construction of the projects.
Governors were also required to provide a minimum of 100 acres of land for the establishment of the parks.
The establishment of the CAIPS will ensure aggregation of farm products and their direct sale to markets in and outside the country through a network of international logistics companies.
The Ministry of Investment, Trade and Industry will additionally set up agro-processing and value addition cottage industries in the counties that will spur local economic growth and make farming lucrative as a job creating mechanism.
According to governance expert David Ngugi, Mr Kinyanjui has his work cut out for him, in ensuring a good business environment, to give hope to local and international investors, who have been weighed down by the country's taxation regime.
"Kenya Kwanza administration promised investors and hustlers a conducive business operating environment. Mr Kinyanjui will now face the task of making things work on the next two years,” said Mr Ngugi.
"He is expected to implement business-friendly policies that transcend politics. He is also expected to provide leadership, which will guarantee acceleration in the manufacturing sector besides working hard to bring in new investors," added Mr Ngugi.
According to him, Mr Kinyanjui will have to address constraints which have contributed towards the country's decline in manufacturing over the last decade.
Mr Kinyanjui will be in charge of protecting Kenyan goods against dumping and subsidized imports and recommending countervailing measures.
Above all he will be expected to open new markets for local products abroad and at the same time facilitate the private sector to take advantage of the markets to increase exports.
Kenya's long term development Blue Print-the Vision 2030, aims to transform the country into an industrialized middle income State, offering a high quality of life to all citizens.
The Ministry of Investment, Trade and Industry, through the State Department for Industry targets to raise manufacturing contribution to the Gross Domestic Product (GDP) from current 7 percent to 15 percent by 2027 and to 20 percent by 2030.
Mr Kinyanjui, 50, acquired his first degree in literature from Kenyatta University, before he later pursued a master's degree in business administration at the University of Nairobi.
Between 2007 and 2012, Mr Kinyanjui served as Nakuru Town MP and as the Assistant Minister for the ministry of roads.
In 2013, he unsuccessfully vied for the Nakuru gubernatorial seat, losing to Kinuthia Mbugua.
Between 2013 and 2017, he served as the first chairperson of the National Transport and Safety Authority (NTSA).
In 2017, he vied for the Governor seat for the second time, trouncing first Governor Kinuthia Mbugua.
He was elected effectively becoming the second governor of Nakuru.
