The system of exchange control in Kenya

Abstract

The paper tries to give an analysis of the quantitative exchange control system, which Kenya took over from the Colonial Administration at independence. After presenting the legal framework of exchange control, the paper discusses the provisions applied to the various international transactions covered by exchange control. From this presentation it becomes apparent, that the exchange control administration played in the past a minor role in the formulation of policies for imports which in 1971 accounted for 77% of all transactions in the current account. The bulk of the exchange provisions center on invisible payments, which are normally granted upon documentary proof or within specified limits. For the most important item in this section, International Investment Income, the role of the exchange control administration is reduced to policing the very liberal provisions granted to investors under the foreign Investment Protection Act. The paper closes with a discussion on how the present quantitative system of exchange control could be improved.