Unlocking Wealth Investment Options In Kenya: Discover The Investment Haven of Kenya

By Steve Biko Wafula / Published February 7, 2024 | 12:02 pm

KEY POINTS

At only 5%, Kenya's withholding tax on dividends is substantially lower than what is seen with most fixed-income investments. When coupled with the fact that dividend yields are currently on par with fixed-income yields, this represents a double advantage for equity investors.

Kenya is rapidly positioning itself as a premier investment destination, and here’s why investors should take notice:

Here is why;

Tax-Advantaged Capital Gains: In Kenya, capital gains from share trading are tax-exempt. Investors can fully enjoy the fruits of their investment strategies without the burden of taxes on their capital gains, whether from long-term holdings or short-term speculative trades. This policy is particularly attractive for those looking to maximize returns on equity investments.

Low Dividend Withholding Tax: At only 5%, Kenya’s withholding tax on dividends is substantially lower than what is seen with most fixed-income investments. When coupled with the fact that dividend yields are currently on par with fixed-income yields, this represents a double advantage for equity investors.

Luscious Tax-Free Infrastructure Bonds: Comparable to the finest Wagyu steak in its appeal, the idea of an 18% tax-free return from infrastructure bonds is incredibly enticing. These government-issued bonds offer a high yield without the tax bite, making them a juicy option for income-seeking investors.

Flexible Bond Market: Investors in Kenyan government bonds are not locked in until maturity; they can sell these bonds in the secondary market. In a climate where interest rates have peaked, such flexibility can lead to profitable opportunities as bond prices adjust.

Collateral Opportunities from Long-Term Bonds: Long-term bonds in Kenya aren’t just a stable investment; they can also serve as collateral for loans. This feature can amplify returns when used wisely for profitable ventures. It’s essential to remember, though, that long-term bonds can fluctuate in price, and leveraging them does carry risk.

The blue line represents the infrastructure bond coupon rates over time. It shows a rising trend, indicating increasing returns for bond investors.

The green bars represent the percentage of local institutional ownership in the top listed companies. This suggests a strong local investment presence, reflecting confidence in the Kenyan market.

The graph combines information from different sources to give a visual representation of the investment climate in Kenya. It highlights the growth in government bond interest rates and the strong local institutional ownership of major companies.

The Kenyan government is pushing pro-investment policies, ensuring that the country remains an attractive destination for capital. With comprehensive financial education, such as the upcoming online masterclass by Abojani in February, investors are well-equipped to make informed decisions and capitalize on the nation’s robust investment climate.

Kenya’s commitment to financial literacy and investor-friendly policies makes it a beacon for investment in Africa, promising sustainable growth and lucrative returns for those ready to engage with the market. Welcome to the land of opportunity – Welcome to Kenya, the +254.

About Steve Biko Wafula

Steve Biko is the CEO OF Soko Directory and the founder of Hidalgo Group of Companies. Steve is currently developing his career in law, finance, entrepreneurship and digital consultancy; and has been implementing consultancy assignments for client organizations comprising of trainings besides capacity building in entrepreneurial matters.He can be reached on: +254 20 510 1124 or Email: info@sokodirectory.com

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