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Has Kenya’s foreign direct investment grown by 400 per cent?
“… In terms of investments we’ve increased our (foreign) investments, from the time that H.E. the President took office, 400 per cent. In 2015, our capital, Nairobi, edged Johannesburg out of being the most attractive investment destination city in the world.”
- Foreign Affairs CS, Amina Mohamed, at the Jubilee manifesto launch on June 26, 2017
Foreign direct investment (FDI) net inflows more than doubled (142 per cent) from Sh44.3 billion in 2013 to Sh107 billion in 2015, according to data from the Kenya National Bureau of Statistics (KNBS).
A review of FDI data by Nation Newsplex reveals that the figures on FDI inflows by the United Nations Conference on Trade and Development (UNCTAD) are slightly higher, but the pace of increase is the same as that of KNBS.
According to UNCTAD, FDI to Kenya almost tripled (179 per cent) from Sh53 billion in 2013 to Sh148 billion in 2015. For Ms Mohamed’s claim to be true, the inflows would have to reach Sh265 billion in 2016, an increase of 79 per cent over the previous year, which is lower than the increase in 2013/2014.
In 2015, Kenya recorded one of the biggest increases in FDI, with project numbers rising 49 per cent to 85, according to the Africa Investment Report by the Financial Times.
But the following year, according to the 2017 Ernst & Young attractiveness report, FDI projects and capital investment declined by more than 50 per cent, as FDI declined across the African continent, when it should have increased if FDI was to increase by 400 per cent from 2013.
The report states that in Africa, Kenya was the second most attractive destination for investment after Morocco and ahead of South Africa, which was placed third.
Despite the impressive growth in foreign investment in recent years, Kenya has not attracted significant foreign investment in production capacities, according to the World Bank.
FDI in high-productivity sectors stimulate productivity in the economy, as technologies and knowledge spill out to domestic firms.
While Kenya has indeed seen a huge jump in FDI, published sources of information do not indicate an increase by 400 per cent (five times).