A total of $1.4 billion in FDI entered Kenya in 2015 according to the data released by UNCTAD. The number of FDI projects rose by 47% in 2015, reaching 84 in Kenya, according to FDI Intelligence.
Kenya FDI Inflows (2009-15)
The country has become the third leading FDI destination in East Africa after Ethiopia and Tanzania in 2015.
Top FDI hotspots in East Africa (2015)
The IT & Telecom, as well as the renewables, banking, real estate, consumer goods manufacturing, infrastructure, agriculture, and tourism sectors are the top areas for FDI in Kenya.
The countries with the highest investments in Kenya are Belgium, China, India, Israel, Japan, Mauritius, Netherlands, South Africa, the United Kingdom, and the United States.
Kenya FDI Inflows (% of GDP)
The Kenyan government introduced new rules aimed at making it easier for foreign companies to invest in special economic zones in the second half of 2016. However, restrictions on foreign ownership still exist in telecom, power, insurance and media sectors, as well as the stock exchange.
Kenya FDI Inward Stocks
ICT and renewables are the most promising sectors, having gained momentum in Kenya in recent years.
The Kenyan 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 country is also one of the biggest markets in Africa for app downloads, and it has the highest mobile penetration rate in East Africa, at 42%.
Kenya is also one of the ‘rising stars’ in Africa in terms of its attractiveness for renewable energy investment. The government has invested $1.2bn in building solar power plants across the country. Kenya aims to generate half of its electricity through renewables.
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.
Despite the country’s ongoing security problems, Kenya offers various investment opportunities for the global and regional players. The IMF forecasts that Kenya’s GDP will grow by an average of 5.9% in 2017-21. It is predicted that FDI inflows into Kenya will continue to be driven by the country’s medium-term growth prospects. Most forecasts show investors are likely to remain interested in the country.