What you need to know:
- Funny thing, the government is not talking of how jobs will be created, how taxes will be managed, how tax incentives and breaks will be given.
- The tax issue has been completely been avoided by the relevant stake holders and now it’s like we have accepted and moved on.
The Kenyan government is seeking investors for a lot of proposed development plans.
Yesterday, the president launched the construction of the railway line from Mombasa to Malaba. In Machakos, Governor Mutua is building a new town from scratch amidst a lot of hurdles. All over the country, counties are looking for investment options to be able to create jobs and generate revenue.
Investments in the counties should be focusing right now on the elite few who are super-rich, or projects that will see a large number of local investors participate.
This will see a faster involvement in the economy by the large middle class who are suffering under debt and by large creating job opportunities for the many that are jobless. Some will disagree and say I am not seeing the bigger picture.
Large-scale projects like Konza City, or Machakos City, or the railway line will definitely have a serious impact on the economy, and firm up the key macro-economic fundamentals needed to ensure that our economy picks up to the projected 7 per cent plus growth per year.
Action must be taken to raise the purchasing power of Kenyans and help people stay in, or re-enter, the labour market. If a protracted period of stagnation in living standards is to be avoided for low and middle income earners, strategic investments in manufacturing are key.
Without urgent action, by 2020 these low to middle earners – a pivotal group of swing voters for all parties – will have seen their incomes reduce further as wages will have fallen in real terms, given that new technology and globalization has led to a hollowing out of middle income jobs.
Funny thing, the government is not talking of how jobs will be created, how taxes will be managed, how tax incentives and breaks will be given. It’s all hype about new projects that are more mirrored in utopia than reality.
The tax issue has been completely been avoided by the relevant stake holders and now it’s like we have accepted and moved on.
Before we look at the investment destinations for the holiday season, let’s recap some key issues we need to always remember before we part with that million shillings or whatever amount we have for investment. There are many guides out there, but these come from the US Securities and Exchange Commission.
Draw a personal financial roadmap.
Before you make any investing decision, sit down and take an honest look at your entire financial situation -- especially if you’ve never made a financial plan before. This helps you define a purpose for your money.
Money with a purpose is good servant. Money without a purpose is a bad master.
Evaluate your comfort zone in taking on risk.
All investments involve some degree of risk. If you intend to purchase securities - such as stocks, bonds, or mutual funds - it's important that you understand before you invest that you could lose some or all of your money.
A risk tolerance test prepares you for the turbulence that lies ahead.
Consider an appropriate mix of investments.
By including asset categories with investment returns that move up and down under different market conditions within a portfolio, an investor can help protect against significant losses. It’s always good to have your eggs in different baskets lest one of them breaks.
Create and maintain an emergency fund.
Most smart investors put enough money in a savings product to cover an emergency, like sudden unemployment. Some make sure they have up to six months of their income in savings so that they know it will absolutely be there for them when they need it.
But it’s also good to have an emergency fund that is geared towards investments that will enable you to take advantage of investment opportunities that come suddenly.
Avoid circumstances that can lead to fraud.
Scam artists read the headlines, too. Often, they’ll use a highly publicized news item to lure potential investors and make their “opportunity” sound more legitimate.
Now that we’ve got that out of the way, what are the top 9 investment destinations for the ordinary folk like you and I in Kenya?
Stocks (the equity market) we have a lot of discounted options that through marginal trading, one can make some good money.
The bond market (buying government debt at a fixed return, which is considered safer than most options)
Real Estate is seen as the most lucrative industry across Africa to invest in, given that demand outstrips supply by 100%, especially for the middle and lower class housing units.
Transportation. Since with the county governments being established, this has opened up the need for better transport solutions as more people travel more
Supplies and Procurement (Who will supply the new 47 county governments with whatever it is that they will need? Well, the answer is obvious; this is a gold mine waiting to be mined)
Agro-business. With the establishment of new centers of power in 47 regions, consumer behaviour is shifting and that has increased the need for more commodity trade across the country hence more suppliers, transporters and so on.
Electronic Imports. Since the need for the converter boxes due to digital migration has created a need for more than 15 million boxes, a demand that can’t be met easily. This is one reason the process keeps getting postponed. This is a huge opportunity as it cuts across the EA region.
County businesses in the areas of retail, services and hospitality. The county governments have created such a huge demand, that it will take 5 years minimum to just stabilize it, especially in areas far from key cities like Nairobi, Kisumu and Mombasa.
Digital engagement. this is the platform that has made traditional media run for its money. It’s the one area that is driving others. It’s a must investment area for any SME
These are the top 9 hot investment options in Kenya. The dynamics and fundamentals are diverse, but the returns, especially between this coming quarter and the third quarter of 2014 will be huge for those willing to surmount the risks involved.