First quarter FDI data signals slow annual inflows

Money Markets

Kenya Investment Authority chairperson Anne Kirima-Muchoki during a roundtable discussion on Kenya’s business and investment potential at the agency’s offices in Nairobi on Wednesday. Photo/Diana Ngila 

By GEOFFREY IRUNGU, girungu@ke.nationmedia.com

In Summary

• KenInvest aimed for Sh150 billion this year but logged Sh30 billion in first three months.

Foreign direct investments (FDI) proposals logged with the investment agency totalled Sh30 billion ($341 million) in quarter one of this year, marking a slow progress to the parastatal’s target of Sh150 billion investment this year.

 

Among the companies expected to invest in the country by next year, Kenya Investment Authority (KenInvest) said, is South African-based Imperial Health Services which is investing Sh1.8 billion.

Others are Business Connections, Radisson Blu, Park Inn of South Africa and Carrefour of France. However, KenInvest did not immediately make available data on the exact amount and dates of entry into the market.

The investment monitoring body said the higher projection of Sh150 billion for the year was based on the fact that performance for the remaining part of the year is expected to be better than the first months.

KenInvest said that the data it released was merely what they had collected and did not necessarily reflect the entire FDI as some firms used lawyers, advisory and audit companies to plan and register their investments.

“We only get data on the companies that register with us. There are firms that bring in FDI through audit or advisory firms, lawyers and others. This data does not reach us since it is not a requirement for them to register it,” said Moses Ikiara, KenInvest CEO.

Dr Ikiara said investors were targeting many sectors of the economy, noting that the current infrastructure development was one of the major attractions. Other attractions are adequate and skilled human capital.

READ: Kenya surges to second place in Africa FDI ranking

He was speaking during a briefing at the company’s offices in Nairobi. KenInvest chairman Ann Kirima-Muchoki said the World Bank’s six per cent economic growth projection this year was an incentive for those keen on investing in Kenya.

Mrs Kirima-Muchoki said Kenya would remain on the path to fast economic growth with the issuance of a successful sovereign bond in coming weeks to finance infrastructure and drive down interest rates.

World Bank senior economist Jane Kiringai said: “Kenya has Africa as a market and investors need not worry about where to sell their goods.”

According to Ernst & Young CEO Gitahi Gachahi, the country attracted higher investments in 2013 compared to 2012, and was projected to have even higher investments this year.

Early this month, Ernst & Young launched a report on FDI, which also indicated that Kenya was the largest investor in the east African region.

The financial advisory firm noted that regional hubs such as South Africa, Nigeria and Kenya, together with emerging high-growth economies such as Ghana, Mozambique, Zambia, Tanzania and Uganda, were at the forefront of rising FDI levels on the continent.