Writing assignment #3

Kenya is Politically Stable

The success of any Multinational Corporation is highly anchored on the political stability of the countries of operation. For any country to be politically stable, it must have a solid establishment of friendly laws, low insecurity threats and few chances of erupting into civil disputes (BBC News, 2016). With this in mind, Kenya has endured more than four years of peace since 2007 when the country experienced post-election violence (BBC News, 2016). Besides, as you all know, the country is now under less threat after crushing the notorious Al-Shabaab militia in their base of operation, Kismayu. Therefore, given the low rates of civil violence, terrorist attacks and a strong political regiment, Kenya is the best fit for investment in the oil and gas industry.

Kenya’s economy is the best for oil and gas exploration

Kenya gained by its solid notoriety to summon the consideration of financial specialists quick to investigate for first oil. The nation has been considered as the most encouraging investigation play in East Africa. Kenya's tax code sets a precarious 37.5% corporate salary rate on foreign organizations (The World Bank, 2016). However, it offers diminished rates of 20% for up to five years for new organizations recorded in Kenya. The motivation has functioned admirably to court worldwide organizations to join in the nation. Moreover, the country’s Gross Domestic Product (GDP) has averaged 5% for more than 14 years (The CIA World Factbook, 2016).

Kenya is endowed with rich mineral deposits

Furthermore, Kenya is endowed with large oil deposits in various areas. These oil and gas deposits have for long remained unexplored. For instance, the country recently discovered rich oil and gas reserves in Turkana running for more than 3,275 meters (Lillian, 2016). These oil and gas deposits have been confirmed scattered in different regions, with potential investors eyeing taking a slice of such resources. The country also bears the least barriers of entry to foreign countries seeking to invest in oil and gas industry. The latter bases on the fact that Tullow Oil Plc is the only company drilling and exploring oil in the country (Lillian, 2016). A move to shift the competition there before other competitors settle on these rich oil and gas deposits would turn out profitable.

Low Inflation rates and stable oil prices

Kenyan’s inflation rates have remained low in the last two decades. Ranking as the second most developed country after South Africa, Kenya’s currencies rarely losses value. Currently, the country has an inflation rate of 6.4% (The World Bank, 2016). This rate is doubly lower when compared to other investment options such as Namibia, Mozambique, Ghana and Senegal, Morocco and South Sudan. Furthermore, despite the fact that the country experienced an oil and gas crisis in 2006 due to artificial shortages, the country’s oil prices have remained stable overtime (Lillian, 2016). Prices hardly fluctuate by 12%, which is an indication of high market potential and profitability. Therefore, I believe that Kenya is the next destination for enlarging the reach of M&M in the global Oil and Gas industries.

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