Kenya overtakes SA as biggest investor in African countries
Kenya invested in 36 projects last year in other parts of the continent against South Africa’s 33.
Kenya
overtook South Africa to become the biggest investor in other African
countries in terms of the number of projects in 2015.
Kenya
invested in 36 projects last year in other parts of the continent
against South Africa’s 33, a new study by financial consulting firm
Ernst & Young shows.
It noted that most of Kenya’s intra-Africa investments went into countries within the East African Community (EAC).
The
study said Kenya’s global ranking as a source of foreign direct
investment (FDI) to the African continent also improved strongly to
seventh position in 2015 from 13th in 2014.
“Activity
was largely concentrated in services, with financial and business
services together accounting for nearly 78 per cent of FDI projects
originating from Kenya,” said the report released Monday.
“Many
Kenyan companies are playing the role initially adopted by South
Africa’s corporate sector, who were the first to venture outside their
home markets,” it adds.
PROJECTS' NET WORTH
South
Africa, however, beat Kenya in terms of the worth of the projects as it
had Sh200 billion compared with Kenya’s Sh100 billion.
In
the past decade, Kenyan banks and retail businesses, for example, have
ventured into the region, including in the volatile South Sudan and
Somalia.
“East
Africa is the primary destination for Kenyan investors, in line with
overall sub-regional integration plans,” said the study.
It further shows that Africa attracted FDI from a diverse and growing group of investors.
In 2015, the US retained its position as the largest investor on the continent, despite a four per cent fall in FDI projects.
Historical investors, including the UK, France, the UAE and India, expressed renewed interest in Africa.
Other notable investors in Africa were Italy and Luxembourg, which became among the largest 15 investors in 2015.
Overall, intra-African FDI projects rose 2.8 per cent in 2015, with capital investment up 6.2 per cent.
MORE PROJECTS
In
terms of inward FDI in 2015, the study shows that Kenya, touted as East
Africa’s anchor economy, posted a resurgence, with projects standing at
95 compared with 62 the previous year, an increase of 53.2 per cent.
At
the same time, South Africa had more inward FDI projects, numbering 130
in 2015 compared with 120 projects in 2014, an 8.3 per cent increase.
“Kenya
and East Africa is shining bright and even brighter in the comparison
with its peers. Kenya is very much the leader in this region and because
of a good component of diversification is maintaining a strong rate of
GDP expansion,” Rich Management CEO Aly Khan Satchu said of the report’s
findings.
However, the report warned that potential investors are wary of downside risks to growth forecasts.
“For
example, in Kenya’s case, a large current account deficit and growing
debt levels provide the government with less flexibility to fund
longer-term growth,” it said.
Across
the whole continent, on the other hand, inward FDI project numbers
increased by seven per cent year on year, from 722 projects in 2014 to
771 projects in 2015.
But
the capital value of those projects was down year on year to $71.3
billion in 2015 from $88.5 billion in 2014. Even after falling, the 2015
figure was still higher than the average of $68 billion between 2010 to
2014.
BOFYA PICHA HAPA CHINI UONE PICHA ZA UCHI BONGO HASA USWAZI
Chapisha Maoni