A total of $989 million in FDI entered Kenya in 2014. The country captured 8.5% of total Africa FDI inflows in 2014. Moreover, 57 FDI projects were registered in 2014 in the country. The auto industry, as well as the agriculture, logistics, infrastructure, and ICT sectors are the top areas for FDI in Kenya. The 10 countries with the highest investments in Kenya are the US, India, the UK, Mauritius, Israel, Japan, Netherlands, Belgium, China, and South Africa.

Source: UNCTAD

Kenya has been speeding up its economic reforms to boost the country’s business landscape, and to mitigate against risks that could dampen growth prospects. The country’s GDP growth rate stands at 5.3%, and its GDP rate at $60.9 billion in 2014. Kenya’s GDP per capita reached $1,358 in 2014. The World Bank predicts that Kenya’s economy will grow at 5.9% in 2016, and 6% in 2017. However, Kenya continues to face its own unique challenges. The country’s deteriorated fiscal situation is the primary reason why both Standard & Poor’s and Fitch Ratings downgraded the country’s outlook from stable to negative in 2015.

Source: UNCTAD

Kenya has become one of Africa’s hotbeds of innovation in recent years. The government has a five year strategic plan to transform the country into a high-tech hub in Africa. Nairobi is currently the most advanced city in Africa in terms of ICT use. According to a survey by the GSMA, entitled “The Mobile Economy in Sub-Saharan Africa 2015”, access to financial services more than doubled over seven years, reaching two-thirds of the population in 2013, helped by the presence of mobile financial services in Kenya. The survey also stated that Kenya is one of the biggest countries in Africa for app downloads, and it has the highest mobile penetration rate in East Africa, at 42%. The GSMA describes Kenya’s Nairobi as a Silicon Savannah, stating it has been the epicenter of the country’s innovation.

Source: World Bank

Renewables —

Ernst & Young ranks Kenya as one of the ‘rising stars’ in Africa in terms of its attractiveness for renewable energy investment. The government has invested $1.2bn to build solar power plants across the country. Kenya aims to generate half of its electricity through renewables by 2016. Kenya’s current installed generation capacity stands at 2,150 MW. It is predicted that the country possesses more than 7,000 MW of undeveloped geothermal energy resources in the Rift Valley area. The government plans to increase its generation capacity by 23,000 MW by 2030.

Google, one of the major investors in renewable energy, announced in 2015 that it would invest in a wind power project in Lake Turkana in Kenya. The project, which will be the world’s most efficient and the continent’s biggest wind farm, will hold 365 wind turbines. It is expected to generate close to 1,400 gigawatt-hours of power per year, accounting for close to 15% of Kenya’s total electricity consumption.

Kenya Top 10 Investors

US, India, UK, Mauritius, Israel, Japan, Netherlands, Belgium, China, South Africa

IIG Comment

Kenya is the leading growth and investment hotspot in Africa. It is expected that this economic growth will continue in the medium term. The government, which aims to transform Kenya into a middle-income country, is committed to improving the investment landscape. Tech innovations and renewables are the most promising sectors, having gained momentum in Kenya in recent years. Agriculture, real estate, tourism, and infrastructure projects are the leading areas for investment. Most forecasts show investor confidence in the country’s business climate to be strong. Despite the country’s ongoing security problems, Kenya offers huge investment opportunities for the global and regional players, and investors are likely to remain interested in the country.