An oil rig at the Ngamia 1 site in Turkana county. Most of Uganda and Tanzania FDIs have been going into their oil and gas sectors. FILE
What you need to know:
Kenya received Sh16 billion ($188 million) FDIs in the 12 months ending June, while data from the Uganda and Tanzania central banks shows the two attracted total FDIs of Sh155 billion ($1.8 billion) and Sh129 billion ($1.5 billion) respectively.
The World Bank recently warned that the fall in Doing Business rankings for Kenya was a factor in FDI inflows, noting that Rwanda had stronger indicators.
Kenya is now ranked 129, down from 72 in 2008, in the annual global Doing Business rankings.
Large investments going into the Uganda and Tanzania oil and gas sectors have seen foreign direct investments (FDIs) into the two neighbouring countries far exceed inflows into Kenya, new World Bank data shows.
Kenya received Sh16 billion ($188 million) FDIs in the 12 months ending June, while data from the Uganda and Tanzania central banks shows the two attracted total FDIs of Sh155 billion ($1.8 billion) and Sh129 billion ($1.5 billion) respectively.
The World Bank notes in the report that Kenya needs to improve the business environment to attract more foreign investments. Most of Uganda and Tanzania FDIs have been going into their oil and gas sectors.
“As investment — particularly foreign direct investment — is very mobile, countries need to create and maintain attractive business environments if they are to help local businesses expand and attract new players,” said the World Bank’s report released this month.
The bank warned that the fall in Doing Business rankings for Kenya was a factor in FDI inflows, noting that Rwanda had stronger indicators.
Kenya is now ranked 129, down from 72 in 2008, in the annual global Doing Business rankings.
Weaker rankings
Rwanda, on the other hand, is ranked 32 globally even though it does not export any hydrocarbons, up from 106 in 2008.
Tanzania and Uganda have even weaker Doing Business rankings of 145 and 132, respectively, but have been helped by commercial production of oil and gas. Uganda is currently receiving bids for tenders on construction of an oil refinery.
Though the World Bank report did not reveal the exact sectors in which the FDI went into, recent data from the Kenya National Bureau of Statistics shows Kenya has been importing a lot of machinery and equipment.
An oil rig, for example, costs about Sh2 billion. A report from the United Nations Conference on Trade and Development (UNCTAD) released in October noted that the countries have had to invest in education and training in order to attract FDI.
UNCTAD noted, for example, that in agriculture Kenya had set up the Horticulture Practical Training Centre in Thika as it seeks to attract more investors to what has become a highly lucrative niche.
UNCTAD said export processing zones also attract FDI, which have several incentives.
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Note: The results are not exact but very close to the actual.
