Kenya is among the Common Market for Eastern and Southern Africa (COMESA) countries that recorded notable increase in Foreign Direct Investment in 2017.
The Comesa Investment Trend 2018 report released last week shows Kenya recorded $671.7 million (Sh67.1 billion) in FDI last year, up from $393.3 million (Sh39.3 billion) tin 2016, a 70.8 per cent growth.
Kenya’s growth was however outpaced by Swaziland’s 161.8 per cent and Zambia’s 77.9 per cent
Other countries in the bloc that recorded FDI inflow growths include Burundi at 49.7 per cent and Seychelles at 23.6 per cent.
Mauritius, Zimbabwe and Malawi recorded a significant decline in FDI inflows of 45.8, 22.2 and 14.9 per cent respectively. Others include Madagascar and Ethiopia at 13.7 and 10.1 per cent in that order.
Despite global and continental declines in FDI, the Comesa region posted an increase in inflows of 3.6 per cent, growing from $18.6 billion (Sh1.86 trillion) in 2016 to $19.3 billion (Sh1.93 trillion) last year.
This translated to almost half ( 46 per cent) of Africa’s FDI inflows in the year under review.
Egypt and Ethiopia received 65.2 per cent of total FDI inflows in the region, accounting for $12.1 billion (Sh1.2 trillion) of Sh1.93 trillion received by all 19 member states. The two countries received $8.5 billion (Sh854 billion) and Sh358 billion respectively.
Kenya is ranked sixth in the region in terms of FDI receivables behind Sudan and Uganda which received Sh106.3 billion and Sh69.9 billion respectively.
Real estate, construction and business activities accounted for most FDI inflows for Kenya, with Sh15.8 billion originating from South Africa, Sh2.26 billion from Comesa, Sh1.9 billion from the East Africa Community and Sh840 million from the rest of Africa.
The region recorded a 30 per cent decline in FDI outflows due to weak financial muscle and limited technological knowhow. This dropped from $1.3 billion (Sh130 billion) in 2016 to $787 million (Sh78.7 billion) in 2017.
The Democratic Republic of Congo accounted for 37.1 per cent of total Comesa outflows followed by Egypt and Libya at 25.3 and 14 per cent respectively.
Kenya had the fourth highest outflows in the region at $107.3 million (Sh10.7 billion) which was higher compared to the 2016 total of $65.8 million (Sh6.58 billion).
Financial sector, information technology and hospitality sectors accounted for most of firms originating from Kenya to other countries in the region.
Most countries in the bloc recorded an improvement in the 2019 Ease of Doing Business, with six of them appearing in top 100 globally.
Kenya improved from position 80 to 61, ranking third in COMESA after Mauritius and Rwanda which were ranked position 20 and 29 globally.