Kenya
Sector
Agriculture & Agri-processing
Investors have the opportunity to invest in the production of gum arabic in Kenya through a public private partnership (PPP).
Investment Opportunity
The Acacia tree, the main raw material for producing gum arabic and gum resins, grows abundantly in Kenya's arid and semi-arid regions. Gum arabic is widely used as an emulsifier in foods, diet drinks, ink, textiles, paper, paint and pharmaceuticals.
Consumption of processed gum arabic is large. A survey has revealed that in Nairobi alone consumption is around 700 tonnes. The paint industry is the biggest consumer (560 tonnes), followed by the food industry (86 tonnes) and the ink industry (20 tonnes).
From available data, raw gum arabic exported from Kenya currently fetches about US$2.3 per kg which reflects gross earnings in excess of US$2.5 million. Given that collectors earned US$1.5 per kg of raw gum delivered, a large amount is also ploughed back into the northern pastoral economies.
Public Private Partnership
In pursuing PPP the government will undertake the following:
a) Liaise with all the relevant ministries to ensure an enabling business environment for the implementation of the project, e.g. acquisition of letter of land allotment/lease certificate;
b) Facilitate the suitable PPP arrangement such as Build, Operate and Transfer (BOT) and the extension of the terms of engagement of the investor when necessary;
c) Facilitate the acquisition of tax-exemption on all necessary goods and equipment as provided for under the laws of Kenya where applicable; and
d) Monitoring and evaluation of project implementation and management.
On the other hand investors will be expected to undertake the following:
a) Invest in the development of the project;
b) Undertake to facilitate the conducting of a feasibility study and EIA;
c) Facilitate the formation of
a legal entity to undertake the management of the project; and
d) Mobilise resources for the realisation of the project.
Contact Details Investors interested in this opportunity should contact the Kenya Investment Authority at info@investmentkenya.com
