Kenya retains top spot as major investor in African markets

Kenya: Kenya has been ranked second in Africa as a source of investment an indication that the country’s economic clout is spreading beyond East Africa.

According to a report by the African Progress Panel, Kenya is part of emerging sources of development finance in the continent that indicate a shift from traditional sources of foreign direct investment.

“Another of the misperceptions surrounding Africa’s growth is that foreign investment is in the driving seat,” reads the report in part.

“Much of the investment – especially in banking and finance, telecommunications, retail and services – is driven by regional players.”

“South Africa is emerging as a key investor on the continent, followed by Kenya and Nigeria,” it said.

This implies that Kenyan firms are leading the pack of African companies financing new investments in their own countries and in their regions.

In the past decade, Kenyan companies have successfully made entry into neighbouring countries in the region as they seek to cut their reliance on the saturated and competitive domestic market.

Kenya which is east Africa’s biggest economy, is currently leading the region’s investment towards rebuilding war-torn Somalia with massive investments in education, infrastructure, energy and banking.

Bilateral trade

Data from the European Union on Somalia’s bilateral trade patterns indicates that Kenya is the third largest import partner for Somalia after Djibouti and India.

In 2011, Somalia imports from Kenya amounted for 81 million euros (Sh8.8 billion), surpassing imports from China, Egypt and the United Arab Emirates, UAE.    

Companies like Davis and Shirtliff, Athi River Mining, Bamburi Cement and Equity Bank are leading the onslaught of Kenyan firms commanding an early lead in Mogadishu, what was once the most dangerous country in the world.

The situation is the same in South Sudan where Kenyan businesses had a strong presence despite the recent up-flares of violence that have dampened investor confidence.

“In recent years, increasingly dynamic large African companies have emerged, many working in partnership with foreign investors – and often with a primary focus on regional and domestic markets,” states the Africa Progress Panel.

The Dangote Group, owned by Africa’s richest man Aliko Dangote has been singled out as African made conglomerates that are financing the new-age development agenda.

Ranked Africa’s largest business conglomerate, The Dangote Group has interests in cement and diverse areas of agriculture in several central and West African countries.

Last Month the Government revealed that it has issued an operating licence to Dangote Cement giving the cement maker the green light to launch a $400 million (Sh34.4 billion) offensive into the Kenyan lucrative cement industry.

The expected entry of Dangote Cement into the Kenyan market is going to stoke up competition.