Ahead of the 2023 Africa Singapore Business Forum, Kenya-Singapore recently signed a Bilateral Investment Treaty (BIT) testament to the two nations’ commitment to promoting Asia – Africa trade and investment. The BIT aims to promote greater investment flows between Singapore and Kenya by protecting the interests of investors from both countries. It also gives greater confidence to investors to take up investment opportunities in either country by establishing a legally-binding agreement on how both countries should treat investments.
“The entry into force of the Kenya-Singapore Bilateral Investment Treaty is an important milestone that will further boost trade and investment flows between our countries. It will offer greater protection for Singapore investors venturing into the Kenyan market, and vice versa, safeguarding investments and boosting investors’ confidence.” Gan Kim Yong, Minister for Trade and Industry, Singapore.
With this treaty, businesses operating in both countries will enjoy protection on their investments, on top of that already accorded under Kenya’s domestic laws.
The BIT will also grant investors from both countries the following advantages
- Fair and equitable treatment and full protection and security based on customary international law;
- Non-discriminatory treatment compared to other foreign investments (Most Favoured Nation treatment);
- Protection from illegal expropriation;
- Non-discriminatory compensation for losses arising from war, armed conflict, and civil strife;
- Freedom to transfer capital and returns in and out of country; and
- Access to international arbitration for investment disputes.
“South Asia, made up of 10 countries and with a population of approximately 670 million, offers Kenya a “unique and massive” market to sell its goods…This will check the low trade volumes and scale up our investments, thereby reducing the current trade deficit with Singapore,” said President William Ruto.
The BIT will also be key in easing business between the two countries as it seeks to avoid double taxation on imported goods, allocate taxing rights and exchange of information on how to expand and grow their markets. In 2022, Kenya was Singapore’s 9th largest trading partner in Sub-Saharan Africa with total bilateral trade in goods amounting to USD 212.2 million. Singapore’s total trade with SSA continues to grow annually with a 25% increase recorded over the last last 5 years.
With a burgeoning consumer market and the African Continental Free Trade Agreement (AfCFTA) shaping the landscape, the African market offers compelling potential for businesses. Asian countries such as Singapore will continue to play a key role as a strategic economic partner for Kenya and the African continent.
The 2023 ASBF aims to foster a closer working relationship between Asia – Africa by uniting prominent business leaders and government officials from Africa and Asia, forging discussions on trade and investment prospects within Africa. The forum acknowledges the global competition for Africa and the increasing influence of its private sector. It also provides a fertile ground for networking amongst African and Asian enterprises.
Read the full press release on the Bilateral Investment Treaty here