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Kenya defies insecurity jitters to attract Sh136b investments

FINANCIAL STANDARD
By By NICHOLAS WAITATHU | December 24th 2013

By NICHOLAS WAITATHU

KENYA: Kenya’s local and foreign investment inflows increased by more than 124 per cent in the 11 months to November. 

This is despite fears lenders would hold back their capital as a result of uncertainty over the March elections and insecurity fears.

Kenya Investment Authority (KenInvest), the agency charged with investment promotion, said a total of 105 proposed projects with a capital investment value of Sh136.121 billion were registered and facilitated between January and end of November.

This is compared to 103 investment projects valued at Sh60.745 billion last year.

The beneficiaries

A rise in investments is expected to help the Government sort out the unemployment headache.

Including the 2013 inflows, the total value of investments in the country since 2008 has reached more than Sh706 billion and created more than 65,000 jobs.

Data from KenInvest indicates sectors of the economy that benefited most include manufacturing, agriculture, tourism, energy, construction, ICT and mining.

Investors contributed 30 per cent of the total investment in the manufacturing sector, 27 per cent in agriculture and 25 per cent in energy. Construction received 8 per cent of the inflows, with tourism getting 2 per cent and the mining sector 1 per cent.  

KenInvest Managing Director Moses Ikiara said foreign contributions hit Sh93.7 billion, with local investors placing investments worth Sh41.4 billion.

“Recorded investment inflows for 2013 include only those that the authority registered and facilitated. It is not mandatory for investors to register with us, though this is something we hope to change by amending legislation. This would enhance the comprehensiveness of data capture,” said Dr Ikiara. 

The increase in investments is attributed to growing confidence in the Kenyan economy as the Government focuses on infrastructure development and pro-market policies.

The devolution of projects to the counties has also enhanced their value.

Last year, local and international investment inflows dropped by 160 per cent to stand at Sh60 billion, against Sh156 billion in 2011.

“The whole of the 2012 period, interest rates remained high at about 28 per cent,” noted Ikiara.

Top investors

The top 10 countries that invested heavily in Kenya between January and November are Greece, Tanzania, India, China, Egypt, Canada, Eritrea, France, USA and Germany.

Traditional investors Japan, United Kingdom and Israel followed in positions 11, 12 and 13, respectively.  Greek firms placed investments worth Sh12 billion, which Ikiara said followed a successful investor forum organised in the country sometime this year.

Tanzanian investors extended their wealth in the country to Sh6 billion, with India bringing in Sh4 billion.

China, which has led in investment in recent years, brought in Sh2 billion.

USA, UK, Japan, Germany and France brought in investment worth less than Sh1 billion each.

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