Kenya’s foreign direct investment (FDI) rose 27.53 percent in 2018 to hit a new high of Sh164.84 billion driven by increased flows into manufacturing, chemicals, hospitality, and oil and gas, World Investment 2019 report suggests.
The report by the United Nations Conference on Trade and Development (UNCTAD) indicates foreign investments last year were Sh13.69 billion more than 2017 whose inflows have been revised upwards to Sh129.26 billion from Sh68.13 billion.
“The country has been making strides to facilitate private enterprise and foreign investment, which are contributing to increasing FDI,” UNCTAD says in the report published late Wednesday.
“It improved its ‘Ease of Doing Business’ ranking and has also been marketing its export processing zones (EPZs) as attractive destinations for manufacturing-oriented foreign investment.”
American global hospitality brands such as Hilton, which opened a new outlet — Hilton Garden Inn — near Jomo Kenyatta International Airport (JKIA) and Radisson Hotel Group are some of the major foreign firms which have sunk millions of shillings in Kenya in recent years.
Others are Bangladesh Steel Re-Rolling Mills Ltd and UK’s Tullow Oil which is trucking oil from Turkana oil fields to Mombasa for planned exportation.
Nairobi accounted for 18.21 percent of the Sh908.97 billion injected into 11 eastern African economies, a slightly bigger share compared with 14.71 percent in 2017.
North-neighbouring Ethiopia continued to rule foreign flows in the region despite suffering a 17.6 percent slide in foreign investments, which are largely driven by Chinese and Turkish firms.
Addis Ababa attracted Sh335.57 billion ($3.31 billion) in FDI cash, more than double Nairobi’s value, despite the drop from Sh407.24 billion ($4.017 billion) in 2017.
“FDI to the country was diversified in terms of both sectors and countries of origin. Prospects remain positive due to economic liberalisation, investment facilitation measures and the presence of investment-ready Special Economic Zones,” UNCTAD says in the report.
FDIs in Ethiopia were concentrated in petroleum refining, mineral extraction, real estate, manufacturing and renewable energy, the report says.
Ethiopia’s attractiveness to foreigners was consolidated February this year when Korea’s Hyundai Motor Company opened a 10,000-vehicle-a year capacity assembly plant to serve East Africa.