Kenya is greatly putting a huge bet on the growth of investments out of the discovery of oil and natural resources. Its is looking on making it big on improving infrastructure as well as increasing foreign investments inflows, which last year stood at $514 million, but were still trailing its regional peers Uganda and Tanzania.
Kenya’s foreign direct investment (FDI) as a proportion of gross domestic product (GDP) currently stands at below one percent. The manufacturing sector, one of the flagship sectors identified as key in driving the country to mid-level economic status by 2030, has additionally seen its share of FDI declining over time. This has seen Kenya’s current account deficit deteriorate to now 10 per cent of GDP.
However, a rising middle class, touted as among the fastest rising in Africa, and major infrastructural investments, especially of the the standard gauge railway and the Sh2trillion Lamu Port South Sudan Ethiopia Transport Corridor( LAPSET), are now creating an appetite among investors into the country. Kenya’s attractiveness to investors has grown by some 24 per cent a year between 2007 and 2014, according to the Ernst and Young Africa Attractiveness Survey.
The country, aware that achievement of the double-digit growth as envisioned in the national economic blueprint Vision 2030, cannot happen in isolation, has now set out to market itself as an investment hub, aiming to lift investment as a ratio to GDP to at least 32 percent.
Launching the inaugural Kenya International Investment Conference 2014, President Uhuru Kenyatta said: “With a skilled labour force, a strategic location as a gateway to the region, a large domestic market, and advanced infrastructure, Kenya offers a world of unlimited opportunities and I welcome investors across the world to take advantage of the businesses in the country.”
“The investment in infrastructure, and the commitment by Kenya to sign double taxation treaties making it favorable for businesses is a step in the right direction and we are glad that Kenya, more than its regional peers, has actively demonstrated its commitment to working with investors,” said Patrick Yohannes a delegate at the conference from Lightview Investment, a Turkish company with interests in energy, and textile industries.
Over the last seven years, Kenya has benefited from investments made by 14 companies considered to be the continent’s growth leaders, which collectively have made investments in over 200 FDI projects with a combined value of Sh1.8 trillion, creating 33,000 jobs, according to the Ernst and Young survey.