The inflows were mainly driven by increased flows into manufacturing, chemicals, hospitality, and oil and gas, according to the World Investment 2019 report which is compiled by the United Nations Conference on Trade and Development (UNCTAD).
“The country has been making strides to facilitate private enterprise and foreign investment, which are contributing to increasing FDI,” UNCTAD says in the report published late Wednesday.
“It improved its ‘Ease of Doing Business’ ranking and has also been marketing its export processing zones (EPZs) as attractive destinations for manufacturing-oriented foreign investment.”
The Ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operations stronger protections of property rights.
Last year, Kenya was ranked 61 among 190 economies in the ease of doing business by the World Bank annual ratings. The rank of Kenya improved to 61 in 2018 from 80 in 2017.
This improvement saw a number of multinational firms pitch their tent in Kenya as a result.
One such company is American global hospitality brand Hilton, which opened a new outlet — Hilton Garden Inn — near Jomo Kenyatta International Airport (JKIA).
Radisson Hotel Group are also some of the major foreign firms which have sunk millions of shillings in Kenya in recent years. Others are Bangladesh Steel Re-Rolling Mills Ltd and UK’s Tullow Oil which is trucking oil from Turkana oil fields to Mombasa for planned exportation.
In East Africa, Kenya’s capital Nairobi accounted for 18.21 percent of the Sh908.97 billion injected into 11 eastern African economies, a slightly bigger share compared with 14.71 percent in 2017.
Ethiopia’s Addis Ababa, however, remained the leader in foreign flows in the region despite suffering a 17.6 percent slide in foreign investments, which are largely driven by Chinese and Turkish firms.
Addis Ababa attracted Sh335.57 billion ($3.31 billion) in FDI cash, more than double Nairobi’s value, despite the drop from Sh407.24 billion ($4.017 billion) in 2017.
“FDI to the country was diversified in terms of both sectors and countries of origin. Prospects remain positive due to economic liberalisation, investment facilitation measures and the presence of investment-ready Special Economic Zones,” UNCTAD says in the report.
