According to United Nations trade development arm Unctad, FDI (foreign direct investment) inflow into Kenya increased to $672 million, up 71 per cent, due to buoyant domestic demand and inflows into ICT industries. Investment opportunities expanded despite the political uncertainties last year.
The improved performance was attributed by the South African ICT investors Naspers, MTN and Intact Software who continued to expand into Kenya. United States companies were also prominent tech-oriented investors, with Boeing, Microsoft and Oracle all investing in the country. Significant consumer-facing investments by Diageo (United Kingdom) in beer and Johnson and Johnson (United States) in pharmaceuticals also bolstered FDI into the country.
Unctad argues that Infrastructure projects like the standard gauge railway that will eventually connect several East African countries will increasingly boost economic growth thus generating FDI inflows. The report points out that Kenyan Government provided additional tax incentives to foreign investors.
The report also delves into new investment restrictions or regulations mainly reflect concerns about national security and foreign ownership of land and natural resources where Kenya reinforced the local procurement requirements for existing mineral rights holders last year.
Ethiopia remains an attractive nation for foreign investment in East Africa despite a 10 per cent decline last year. The absorbed nearly half the $7.6 billion invested in East Africa in 2017, making Ethiopia the second-biggest recipient of FDI in Africa after Egypt. The $3.6 billion in foreign investment that poured into Ethiopia last year far surpassed the $672 million attracted by Kenya.