Kenya saw its Foreign Direct Investments reduce to the lowest level in years, attributed mainly to global economic uncertainity.
According to a report by United Nations Conference on Trade and Development, the country saw its FDI inflows reduce to an estimated $0.3 billion in 2018 from $0.7 billion it had registered in 2017, a 57.1 per cent drop.
In the UNCTAD’s Global Investment Trends Monitor, FDI inflows in Eastern African nations reached an estimated $6.8 billion, which is a 14 per cent reduction from the $7.9 billion in 2017 – mirroring the global FDI situation.
“East Africa’s lackluster performance in attracting FDI in 2018 can be attributed mainly to the broader global economic uncertainty,” says Astrit Sulstarova, UNCTAD’s Chief, Investment Trends and Data Section.
Ethiopia continued to be the largest recipient of FDI in the region despite a 24 per cent slowdown in inflows. It posted an estimated $3.1 billion from $4 billion in 2017.
Uganda and the United Republic of Tanzania witnessed increases of nearly 20 per cent in FDI inflows in 2018 compared to the previous year. In Uganda, it posted an estimated $0.9 billion compared to $0.7 billion inflows reported in 2017, while in Tanzania this resulted in FDI inflows growing to $1.1 billion from from $0.9 billion.
Going forward, FDI flows to the region are expected to increase. Announced greenfield projects for 2018 – an indicator of future FDI trends – rose by 54 per cent to $11.5 billion compared to $7.5 billion in 2017.
“The materialisation of these announcements will in most likelihood see enhanced FDI inflows in the region in 2019 and beyond,” added Mr Sulstarova.
Globally, FDI fell by nearly a fifth in 2018 to an estimated $1.2 trillion from $1.47 trillion in 2017.
The drop, the third in as many years, brings FDI flows back to the low point reached after the global financial crisis, with the decline concentrated in developed countries where inflows fell by as much as 40% to an estimated $451 billion.