Foreign investors in Kenya have raised concerns over high electricity costs, regulatory bottlenecks, tax administration, and corruption, describing them as the most pressing hurdles to doing business in the country.
- •The stock of foreign liabilities increased by 3.4% to KSh 2.34 trillion at the end of 2023, largely driven by an 8.5% rise in Foreign Direct Investment (FDI).
- •Europe remains the primary source of foreign liabilities, with the United Kingdom and the Netherlands being major contributors, while Africa has is the second-largest source, led by South Africa.
- •The findings are contained in the 2024 Foreign Investment Survey released by the Kenya National Bureau of Statistics (KNBS), the Central Bank of Kenya (CBK), and the Kenya Investment Authority (KenInvest).
The survey shows that 68% of foreign-owned enterprises are optimistic about Kenya’s business environment, with many citing the country’s skilled workforce, access to regional markets, and ongoing reforms as reasons for confidence.
According to the survey, in 2023, foreign investors reported a 3.3% rise in total employment to 224,704 workers, largely driven by local hires. Women now account for 39.1% of the workforce, up from 37.8% the previous year, signaling gradual progress in gender inclusion.
Looking ahead, nearly 40% of firms plan to reinvest and expand within three years, while a quarter intend to diversify into new areas. Manufacturing, ICT, and finance are expected to drive job creation as firms scale operations.
The finance and insurance sector attracted the largest share of FDI, followed by manufacturing and information and communication. Conversely, the stock of foreign assets held by Kenyan enterprises abroad also grew by 36.8% to KSh 834.2 billion, with the majority of these investments directed toward other African countries.
