Kenyan firms have invested at least Sh113.3 billion ($1.1 billion) in East African countries in the last four years, despite concerns that failure to enforce regional double tax treaty has raised the costs for firms.
The cash deployed by Kenyan companies spreading wings regionally was injected in 55 projects across the sectors, helping create some 3,100 jobs, states the report presented in Nairobi on Thursday.
The Ernst & Young (EY) Attractiveness Survey 2019, ranks Kenya seventh largest source of foreign direct investments (FDIs) into East Africa behind the US, China, UAE, India, the UK and South Africa.
Kenyan firms have invested at least Sh113.3 billion ($1.1 billion) in East African countries in the last four years, despite concerns that failure to enforce regional double tax treaty has raised the costs for firms.
The cash deployed by Kenyan companies spreading wings regionally was injected in 55 projects across the sectors, helping create some 3,100 jobs, states the report presented in Nairobi on Thursday.
The Ernst & Young (EY) Attractiveness Survey 2019, ranks Kenya seventh largest source of foreign direct investments (FDIs) into East Africa behind the US, China, UAE, India, the UK and South Africa.
The EY findings, however, focus only on private sector investments.
The report shows US firms beat China in investments into Kenya, Uganda, Rwanda and Tanzania and Ethiopia — with an outlay of Sh803.4 billion ($7.8 billion) between 2014 and 2018.
The cash invested by US companies was Sh113.3 billion, or 14.10 percent, more than $6.7 billion (Sh690.1 billion) by Chinese firms, according to the annual survey.
EY consultants, however, said the Chinese investments in the period could leapfrog US’s if inflows into public sector, largely bilateral loans, are included.
The US firms invested in 109 projects, yielding 11,400 jobs, while Chinese cash was sunk in 56 projects with resultant jobs estimated at 39,200 in the four-year period.
This is the first time that the EY has incorporated project numbers, jobs created, and investment in determining overall FDIs in private sector since it started conducting the surveys in 2011.
The bulk of the FDIs, about 71 percent, was pumped into the services sectors with extractives accounting for only 2.8 percent, while the remainder largely went into manufacturing, mainly in Kenya and Ethiopia.
“For Kenya, telecoms has always been one of key drivers of FDIs initially in deploying infrastructure for voice and later data. Then there’s financial services, which is now leaning more towards Fintechs (financial technology services), manufacturing and also agriculture,” EY partner for transaction advisory services Antony Muthusi said.
“Going forward, I see TMT (technology, media, and telecoms) continue playing a big role.” The report ranks UAE as the third largest investor with a capital investment of Sh370.8 billion, followed by India at Sh206 billion, the UK Sh154.5 billion, and South Africa Sh154.5 billion.
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