Nairobi is one of the four cities the United Nations has identified among top four African markets that attract highest foreign capital inflows, crucial to creating wealth.
The UN-Habitat, in a report, says East Africa, led by Kenya’s capital, is set to record a sustained growth in foreign direct investment (FDI) in coming years.
“The four major FDI centres in Africa are identified as Cairo, Lagos, Johannesburg and Nairobi and the report suggests both West and East Africa are likely to experience sustained investment growth, primarily in manufacturing,” the UN says in its State of African Cities 2018 report.
If guided well, the study suggests, the flow of foreign capital could cut the high levels of urban poverty and unemployment.
Foreign investments also hold the key to graduating the country from agriculture-based, primary economy to one led by manufacturing and knowledge-based industries, the UN says.
The global agency championed development of infrastructure, including air, land and sea links, as a way of improving accessibility, urban mobility and opening up local markets.
“A skilled workforce is becoming more important than low wages, and good governance and regional integration are also key elements,” it reads.
Kenya’s FDI rose 71 per cent to Sh67 billion ($672 million) last year, according to UN Conference on Trade and Development (Unctad).
Kenya’s rise inflow of foreign investors’ cash contrasted starkly with a 22 per cent drop in FDI in Africa as a whole and a 23 per cent fall-off globally. In addition to capital inflows, foreign investments result in technology transfers and skills exchange among the local population.
Several multinationals last year pumped in new capital into expanding their operations in Kenya, including South Africa's Naspers, MTN and Intact Software.
UK’s alcohol brewer Diageo further boosted FDI in Kenya’s consumer sector. Others were Boeing, Microsoft, Oracle, and Johnson & Johnson.