Kenya posts fastest rise in FDI in Africa

A total of 84 projects from real estate, renewable and geothermal energy as well as roads and railways provide a huge chunk of new jobs.

Casual labourers working on a stretch of Standard Gauge Railway (SGR) in Mombasa on February 10, 2016. FILE PHOTO | NATION MEDIA GROUP 

In Summary

• Eighty four separate projects worth Sh102 billion provided a huge chunk of new jobs for Kenyans.
• Cabinet has sanctioned construction of a Sh20 billion modern port at Kisumu that will complement gains made by SGR.
• Kenya has also caught the eyes of financial-technologically driven companies following its successful mobile payment platform M-Pesa.

By JAMES KARIUKI
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Kenya recorded the fastest rise in foreign direct investments (FDI) in Africa and the Middle East, at 47 per cent, that saw 84 projects in diverse sectors initiated in 2015.

The FDI intelligence website revealed that a total of 84 separate projects from real estate, renewable and geothermal energy as well as roads and railways worth Sh102 billion provided a huge chunk of new jobs for Kenyans.

The Standard Gauge Railway (SGR) with its estimated 25,000 employees is the largest project ever undertaken in Kenya and is expected to be scaled up after its first phase of 472km Nairobi-Mombasa new railway is completed by June next year.

Already the Cabinet has sanctioned construction of a Sh20 billion modern port at Kisumu that will complement gains made by SGR.

The report dubbed FDI Into Middle East and Africa for the past year noted that Kenya was third in terms of numbers of projects initiated after the United Arab Emirates (UAE)  at 298 and South Africa at 118.

Kenya’s top investors are drawn from United States of America, India, United Kingdom, Mauritius, Israel, Japan, Netherlands, Belgium, China and South Africa.

Interestingly, it is Uganda’s joint investment venture in coal, oil and natural gas sector with a Russia-based investor worth Sh460 billion ($4.6billion) that registered the highest amount of FDI.

UAE retained its position as the top FDI destination by project numbers, accounting for 24 per cent of all projects while Bahrain recorded strong inward FDI growth during 2015, entering the top 10 by project numbers for the first time since 2012.

The report observes that Africa continued to attract more investors whereby it recorded 156 more FDI projects than the Middle East in 2015, a 98 per cent rise compared to 2014.

“Africa also continued to dominate job creation with 95,387 more jobs created than in the Middle East,” the report adds.

The economic reforms being spearheaded by the government are aimed at boosting the country’s business landscape and to mitigate against risks that could dampen growth prospects.

Apart from attracting FDIs to its doorstep, Kenya has also caught the eyes of financial-technologically driven companies following its successful mobile payment platform M-Pesa.

Most of the investment cash has gone into renewable energy exploitation that could see Kenya meet 50 per cent of its power needs from renewable sources.

Several geothermal plants are currently being developed at Silale I Baringo county, Menengai, Longonot and Ol Karia in Nakuru County which will see about 500MW added to the national grid next year.

Some 365 wind turbines are under construction in Lake Turkana region which is the biggest wind energy firm in Africa and the second biggest in the world  and is expected to power the soon to be established oil fields in Northern Kenya.

“Agriculture, real estate, tourism and infrastructure projects are leading areas for investment,” it adds.

Interestingly, private and public learning institutions as well as private companies have roped in foreign funds and contractors in implementing projects mainly in the real estate and commercial development sector.