Kenya’s net capital outflows surged nearly fourfold to KSh 217.6 billion in 2023, as money moved aggressively into offshore financial centers even as foreign inflows decreased by 28.8%.
- •Total outflows of foreign assets rose 42.8% to KSh 350.5 billion, led by the Isle of Man, which absorbed 22.8% of the year’s transfers, according to 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).
- •Hong Kong, Mauritius, the United Kingdom, South Africa, and Rwanda also saw sharp increases of KSh 33.0 billion, KSh 32 billion, KSh 25.9 billion, KSh 34.1 billion and KSh 10.0 billion respectively.
- •In contrast, inflows fell to KSh 132.9 billion, with steep declines from the United Arab Emirates and Mauritius outweighing gains from the United States, Isle of Man, and Tanzania.
The imbalance left Kenya with the largest net outflow on record, highlighting the country’s growing role as a capital exporter. The total stock of foreign assets climbed 36.8% to KSh 834.2 billion, with more than half held in regional neighbors Uganda, Ethiopia, Tanzania, the Democratic Republic of Congo, Mauritius, and South Africa.
Offshore holdings grew even faster, with Kenya’s assets in the Isle of Man jumping more than sevenfold to KSh 79.8 billion and those in Hong Kong rising to KSh 33.6 billion from less than KSh 500 million a year earlier.
The stock of FDI assets increased 13.3% to KSh 372.5 billion, three-quarters of it in Ethiopia, Uganda, Tanzania, and the DRC. Ethiopia rose 27.1% to KSh 101.7 billion, while Rwanda gained 51.3% to KSh 21.9 billion. Conversely, FDI outflows collapsed 67.7% to KSh 57.1 billion, reflecting reduced equity investment abroad, and inflows fell 84.4% to KSh 18.5 billion as funding from Angola, Senegal, and Australia shrank.
Net FDI outflows narrowed to KSh 38.6 billion from KSh 58.3 billion in 2022, largely due to reduced exposure to the DRC. The trend underscored how Kenya is channeling more money offshore while drawing less reciprocal investment, a shift that could weigh on domestic liquidity.
