Brit­ish busi­nesspeople say the reg­u­lat­ory uncer­tainty and com­plex tax admin­is­tra­tion in the coun­try are a major set­back to invest­ing loc­ally

Brit­ish investors now say that cor­rup­tion is among the key struc­tural bar­ri­ers that have made it increas­ingly dif­fi­cult for them to do busi­ness in

Kenya.

They are also con­cerned about the coun­try’s high energy costs, which they stated under­mine com­pet­it­ive­ness, as well as fre­quent power out­ages that dis­rupt pro­duc­tion.

The Bri­tons added that the reg­u­lat­ory uncer­tainty and com­plex tax admin­is­tra­tion in Kenya are a major set­back to invest­ing loc­ally, which cre­ates risk where clar­ity is needed.

“Brit­ish com­pan­ies tell us that doing busi­ness in Kenya has become harder. Some investors have scaled back or exited, not for lack of oppor­tun­ity but because of struc­tural bar­ri­ers,” Brit­ish Deputy High Com­mis­sioner to Kenya Dr Ed Barnett says.

“Cor­rup­tion and Kenya’s grey list­ing by the Fin­an­cial Action Task Force raise com­pli­ance costs and reduce investor con­fid­ence. These chal­lenges affect busi­nesses, lim­it­ing gains in job cre­ation.”

These rev­el­a­tions come at a time when the coun­try hos­ted the inaug­ural UK-Kenya busi­ness forum this week, and as the trade between the two part­ners reached £2.1 bil­lion (Ksh350b).

However, high-level Kenyan gov­ern­ment offi­cials attend­ing the forum that was held on Thursday (Janu­ary 22, 2026) did not delve dir­ectly into invest­ment bot­tle­necks that their Brit­ish investors had raised.

When he took to the podium, Invest­ment Pro­mo­tion Prin­cipal Sec­ret­ary Has­san Abubakar defen­ded the heav­ily cri­ti­cised sale of pub­lic assets that has raised eye­brows among gov­ern­ment crit­ics.

The PS only reit­er­ated on the exist­ing cooper­a­tion between the two Kenya and Bri­tain which is the fourth coun­try with high for­eign dir­ect invest­ments in Kenya.

“We have already renewed our stra­tegic part­ner­ship with the UK for the next five years. Two, we have a bilat­eral invest­ment treaty with the UK to make sure our invest­ments are pro­tec­ted. Three, we have a double tax­a­tion agree­ment with the UK to make sure that your income is not double-taxed,” Abubakar said.

He added that Kenya has adjus­ted the part­ner­ship to factor­ing geo­pol­it­ical ten­sions, the sus­tain­ab­il­ity imper­at­ives, and the tech­no­lo­gical innov­a­tions.

“Our renewed stra­tegic part­ner­ship is anchored on the drivers of the future, which means the tech­no­logy and the digital trade, green growth and clean energy, infra­struc­ture and fin­an­cial ser­vices,” the PS stated,

Abubakar, who was long on mar­ket­ing the newly privat­ised Kenya Pipeline Com­pany, which was lis­ted on the Nairobi Stock Exchange this week after the gov­ern­ment put its 11.8 bil­lion shares on sale, told investors at the forum that the gov­ern­ment is mov­ing away from pub­lic to private invest­ments to raise money to fund gov­ern­ment projects.

“We, as gov­ern­ment, are selling 65 per cent of our jewel, almost 11.8 bil­lion shares at Ksh9 per share, and we’re selling it through the Stock Exchange. We have a bot­tom-up eco­nomic trans­form­a­tion agenda and for us to fund that agenda we need fin­ances and invest­ment,” Abubakar said.

The PS nar­rated how the gov­ern­ment had explored vari­ous options before resort­ing to the sale, but could not find any viable pick that could fund Pres­id­ent Wil­liam Ruto’s devel­op­ment blue­print.

“We have three options. One is to beg, and become a money-beg­ging des­tin­a­tion. We say no. The second one was to bor­row, to become a lend­ing des­tin­a­tion. We say no,” he said.

“The third way was to raise our own taxes to fund. The Genz said no. So, what were we to do? We have to shift to private invest­ment to fund this pro­gramme of action to achieve our object­ives.”

Abubakar added: “The pres­id­ent was very clear that the pro­ceeds of the privat­isa­tion will not be used for recur­rent pur­poses or for budget sup­port. But it will be used as seed cap­ital for a national infra­struc­ture fund that will com­mend our infra­struc­ture to turn to Singa­pore.”

Last year, Kiharu MP Ndindi Nyoro, who has become a fierce gov­ern­ment critic, espe­cially in the sale of pub­lic assets warned that the price of KPC shares would dip sig­ni­fic­antly after the ini­tial pub­lic offer and the gov­ern­ment could be at a loss.

“The cur­rent trend in NSE has been bear­ish this year, the com­pan­ies lis­ted are grossly under­val­ued. The sale of KPC will bring a lot of excite­ment. Kenyans will buy dur­ing the IPO, but after the announce­ment of the fin­an­cial invest­ment in Feb­ru­ary for the whole year, the share price will col­lapse,” Ndindi said on the floor of the House.

“The cur­rent investors in the NSE are not buy­ing assets; they are buy­ing rev­enue.”

Cur­rently, there are about 150 Brit­ish com­pan­ies oper­at­ing in the coun­try and employ­ing over 250,000 Kenyans.

Data from the Brit­ish Depart­ment of Busi­ness and Trade shows that the UK expor­ted to Kenya amoun­ted to £792 mil­lion (Ksh137b) in 2025, an 8 per cent increase, equi­val­ent to £59 mil­lion (Ksh10b) com­pared to 2024.

In the same year, Kenyan exports to the UK mar­ket hit £1.3 bil­lion (Ksh224b), a 14.4 per cent increase, equi­val­ent to £164 mil­lion (Ksh28.3b) com­pared to 2024.

Dur­ing the forum, Kenya and the UK entered three new part­ner­ships to boost skills, innov­a­tion, and clean growth that cul­min­ated in UK’S Scot­tish Col­lege, Forth Val­ley Col­lege and Kenya’s National Indus­trial Train­ing Author­ity (NITA) sign­ing an Memorundum of Under­stand­ing.

Cur­rently, Kenya is also bene­fit­ting from Man­u­fac­tur­ing Africa, a pro­gramme the Brit­ish Coun­cil says, de-risks man­u­fac­tur­ing invest­ments hav­ing sup­por­ted 21 deals to fin­an­cial close, rais­ing over Ksh103.5 bil­lion in For­eign Dir­ect Invest­ment, and cre­at­ing over 35,000 jobs.

Addi­tion­ally, the Coun­cil says the Sus­tain­able Urban Eco­nomic Devel­op­ment Pro­gramme (SUED) has inves­ted Ksh1.3 bil­lion in seed cap­ital to sup­port agribusi­nesses to invest in Kenyan towns, cre­at­ing over 14,000 jobs and attract­ing a fur­ther Ksh7.9 bil­lion (GBP 46 mil­lion) in private invest­ment. By Samuel Kariuki, People Daily