At the end of July 2021, Kenya’s capital city, Nairobi, witnessed the launch of the Nairobi International Financial Centre (NIFC). The city has already earned a reputation as a regional hub for technology, innovation, commerce and trade. Now, it also enjoys the status of being a financial hub. The NIFC is a clear demonstration of the openness of the Kenyan economy and that Kenya is now ready to compete on the world stage in terms of international trade and finance.
The Nairobi International Financial Centre is based upon the same principles as other international financial centres such as the Doha International Financial Centre. The NIFC has carved a place for Kenya amongst the handful of African countries that are home to such IFCs including Mauritius, Morocco, Rwanda and South Africa
Why it is Important
Kenya is already an economic powerhouse in Africa and a major player in international trade. Nairobi has also earned itself a name as a tech hub, which means that there is plenty of interest for investment in the city. Thus, the new NIFC will help to create a funnel for investment, while also connecting Nairobi with the rest of the global financial system.
It will also provide plenty of opportunities for international financial services providers, including trade finance providers, to operate in Kenya. This in turn will create an atmosphere that is highly conducive to international trade, not just in terms of merchandise but also in terms of services, backed by the country’s robust IT/BPM sector
IP Opportunity
Nairobi is already rated quite high in terms of its intellectual property laws and regimes. The opening of the NIFC will provide significant tax efficiencies and, thus, may result in many companies choosing Nairobi as their preferred destination for conducting international business related to intellectual property. Whether it is a start-up, a large tech company, big pharma or other industry, intellectual property commercialization is a major area of business, which could soon see Nairobi emerge as a hub for intellectual property exports
An Opportunity for Increased Access to Trade Finance
At Euro Exim Bank, we are keen and excited by the developments in Nairobi. Through the NIFC, Kenyans, and potentially others in Africa, will gain wider access to global markets. As an international bank that specializes in trade finance products and services, including letters of credit, bank guarantees and blockchain driven international trade settlements, we see the possibility of many new opportunities and relationships through the NIFC in the future. As a bank with a focus on SMEs in emerging markets, particularly Africa, we look forward to developing new connections and helping more participants succeed in the world of international trade.
