Kenya’s foreign direct investment (FDI) inflows went against a regional recovery trend in 2021 after falling $269 million (Sh31.47 billion), a United Nations survey showed Thursday.
The UN Conference on Trade and Development’s (UNCTAD’s) World Investment Report 2022 estimates the FDIs amounted to $448 million (Sh52.42 billion using a conversion rate of Sh117 per dollar) from $717 million (Sh83.89 billion) in 2020.
The 37.52 percent dip in foreign investment deals went against a recovery witnessed in major countries in Eastern Africa where average FDIs jumped 35 percent to $8.2 billion (Sh959.4 billion).
UNCTAD says FDIs in Kenya were partly driven by project finance deals around “four bridge projects” aimed at bringing “connectivity with remote areas”.
The UN body has not disclosed the specific bridges, but the State has in recent years increased investment in the construction of bridges over waterways at the Coast through deals with foreign financiers.
These include the Mombasa Gate Bridge – which will connect Mombasa Island with the South Coast – whose work is expected to start this year at a total cost of about Sh85 billion, largely funded by the Japan International Cooperation Agency (JICA).
Others are the Sh2.3 billion Baricho Bridge in Kilifi which is nearing completion and the Sh1.9 billion Likoni Floating Bridge in Mombasa which was completed in 2020. Ethiopia continued to control FDIs in the region, accounting for 52.4 percent or $4.3 billion (Sh503.1 billion) of the inflows — a 78.87 percent jump over $2.38 billion the year before.
“Chinese investments tripled in 2021 (Ethiopia is a central hub for China’s Belt and Road Initiative),” UNCTAD wrote in the FDI report. “Four out of five international project finance announcements in the country were in renewables. For example, the Masdar solar project involves the construction of a 500 MW solar power plant for $135 million [Sh15.79 billion] with Abu Dhabi Future Energy as a sponsor.” Uganda, which is developing infrastructure for its crude oil resources, saw FDIs bump 31 per cent to an estimated $1.1 billion [Sh128.7 billion], according to UNCTAD.
FDI flows into Tanzania climbed 34.6 percent to an estimated $922 million [Sh107.87 billion] on the back of the development of a nickel project by UK-owned Kabanga Nickel for $318 million [Sh37.21 billion].