President Mwai Kibaki of Kenya has opened a three-day international investors' conference in Nairobi with a pledge to fight corruption and adopt reforms needed to attract foreign investors.
Kenya is not among the top 10 most attractive destinations for foreign investment in Africa. Foreigners invested less than $50 million in Kenya's economy last year, and before then, the annual figure is mostly in single digits.
President Kibaki says he wants to change that. He told a gathering of more than 300 Kenyan and foreign investors his government will do all it can to attract and keep their business.
He promised to set up what he called a legal framework with simplified procedures to streamline regulations on privatization, procurement, and financial management.
He told his audience a new investment bill will be debated when parliament opens next week.
President Kibaki says the anti-corruption legislation Kenya has already adopted is producing results.
"These legal reforms are deliberate and systematic actions to stem corruption, which has, in the past, been cited as the single biggest obstacle to the flow of new investment into this country," said Mr. Kibaki.
He said his next step will include beefing up security, reforming the public service and improving road, rail, and telecommunications infrastructure.
Observers say Kenya is not perceived as a an attractive place to invest in. They say Kenya has yet to overcome its reputation as a corrupt and inefficient country.
The chairman of the U.K.-based advisory body Africa Matters Limited, Lynda Chalker, outlined some of the steps the Nairobi government must take to make Kenya more competitive.
"Investors are watching carefully how Kenya fights and deters corruption, how an effective multi-sectoral response to the HIV and AIDS epidemic is delivered," said Ms. Chalker. "Both these issues are essential for the Kenyan government, along with your energetic poverty reduction program, to improve the opportunities for Kenyans to succeed in what is a very rough, tough competitive world."
Ms. Chalker said one advantage for Kenya and other African economies is that returns on foreign direct investment are higher than elsewhere.
A lawyer with the Tanzanian law firm Mkono and Company Advocates, Steven De Backer, says Kenya may be ahead of its neighbors, but has its weaknesses.
"Bureaucracy and corruption: these are the two main concerns," said Mr. De Backer. "The new government is willing to take up these challenges. I think they are really willing to do, but I am not quite sure they really know how to do these things."
He urged the Kenyan government to streamline the country's administrative procedures to make it easier for investors to operate.