Dar tops in investor destination group

Bilateral trade between Kenya and Tanzania is set to increase following the operationalization of the One Stop Border Post at Taveta border post and the tarmacking of the Mwatate-Taveta road which ends in December. [Photo by Gideon Maundu/Standard]

Tanzania has beaten Uganda and the US to become the main destination of investment for enterprises and investors in Kenya.

Recent figures on Kenya’s investment stock across the world indicate a gradual shift in investor preferences, with Tanzania and South Africa now emerging as key investment destinations.

According to data from the Kenya National Bureau of Statistics, the total stock of Kenya’s foreign assets held across the world went up 29 per cent, from Sh148 billion in 2014 to Sh182 billion as at 2015.

The East African Community remains the largest investment destination for Kenya, with the stock of Kenya’s foreign assets held across the region going up from Sh47 billion in 2014 to Sh51 billion in 2015. “Tanzania remained the single leading destination of Kenya’s investment, accounting for 12.5 per cent of the total stock of external assets in 2015,” explains the statics office.

The findings come at a time when trade relations between the two countries have been strained for the better part of the past year.

In November, Tanzanian authorities set fire to 6,400 hybrid day-old-chicks from Kenya, just a few days after auctioning more than 1,300 head of cattle belonging to Kenyan herders.

In July, Tanzania issued a temporary ban on the importation of Kenyan-made milk, margarine, and tiles, setting off a diplomatic tiff between the two EAC neighbours.

The recent foreign direct investment numbers, however, point to a re-alignment of portfolios among Kenyan investors, with investment value to traditional sources dwindling.  

Half of assets

In 2013, Uganda and the US accounted for Sh68 billion and Sh52 billion of Kenya’s FDI respectively, taking up more than half of assets held by Kenyan enterprises and investors in foreign countries.

In 2015, the stock of foreign assets to Uganda and US shrank down to Sh20 billion and Sh9.8 billion respectively.

Kenyan investors also upped their investments in the UK, with the stock of assets held in the country rising from Sh8.5 billion in 2014 to Sh22.4 billion in 2015.