Friday, July 30, 2021, marked a significant milestone for Nairobi's ambitions to become a financial hub, as the Nairobi International Financial Centre (NIFC) signed its first deals with British insurer Prudential Plc and business lobby group TheCityUK.
The NIFC, first mooted over a decade ago, is mandated to support the transformation of Nairobi into a financial hub. However, its rollout has taken time due to delays in setting up a board of directors to oversee its operations and publication of rules to operationalise the NIFC Act.
According to Oscar Njuguna, acting CEO of the NIFC, the centre will operate as a hybrid model, blending elements of a virtual special economic zone with a more integrated approach to regulation.
"We have described ours as a hybrid model, because we are not creating a carved-out separate jurisdiction. It is akin to a virtual special economic zone," Njuguna explained.
He noted that while the centre will offer incentives to attract investors, it will also ensure that there are no gaps in regulation, particularly in areas such as money laundering and tax evasion.
"There will be no gaps in regulation. We will ensure that some of the issues that people have raised about financial centres such as money laundering and evasion of taxes don’t happen here and that there are no gaps around issues of secrecy," Njuguna said.
The NIFC aims to differentiate itself from established financial centres in the region, such as Dubai and Qatar, by offering a unique opportunity for investors to tap into Kenya's growing economy and infrastructure needs.
"The differentiation is that people and investors will go to where there is an opportunity to invest and make a return from their investment. Kenya represents an opportunity because there is a huge gap in the region in terms of infrastructure and other sectors, with a lot of untapped opportunities," Njuguna said.
The centre has proposed a financial disputes court to deal with financial issues, and has also talked about prioritising private equity and venture capital to invest in areas such as public-private partnerships (PPPs) and infrastructure development.
"We have talked about prioritising private equity and venture capital, which will go into areas such as PPPs and benefit us by reducing government expenditure and crowding in private sector investors who will develop infrastructure and create jobs for Kenyans," Njuguna said.
