Investment into Kenya more than double in the first 11 months of this year buoyed by a peaceful election in March, compared to five years ago when violence broke out across the east African nation causing massive business disruptions.
Kenya Investment Authority (KenInvest) said a total of 105 proposed projects with a capital investment value of $1.58 billion were registered between January and November, compared to 103 investment projects valued at $709 million last year.
This increase in investment is expected to lift government efforts to resolve unemployment. which stands at about 40 percent in the east Africa’s largest economy. Investment in the country has created over 65,000 jobs since 2008.
Data from KenInvest indicates sectors of the economy that benefited most include manufacturing, agriculture, tourism, energy, construction, ICT and mining, Standard Digital said.
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.
“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 KenInvest managing director Moses Ikiara.
Investment in the country has recovered from a 160 percent drop between 2011 and 2012 after lending rates came down in tandem with the central bank’s monetary easing policy that saw it cut its key interest rate by 950 basis points to 8.50 percent.
A runaway inflation and tumbling local currency in 2011 pushed the central bank to hike the rate to 18 percent with commercial banks raising lending rates to as high as 30 percent. lending rates have dropped to about 16 percent currently.
“The whole of the 2012 period, interest rates remained high at about 28 per cent,” Ikiara said.
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.
