United States Tops In Foreign Direct Investments In Kenya

• Kenya attracted 63 projects and an influx of $2 billion in FDI capital, creating 7,819 jobs across various sectors
• The U.S. was the leading investor, with 14 projects amounting to US$748 million in capital investment
• Trade between the U.S. and Kenya has been solidified through the U.S-Kenya Strategic Trade and Investment Partnership (STIP), launched in July 2022

Elijah Ntongai, a journalist at TUKO.co.ke, leverages more than three years of expertise in financial, business, and technology research, providing insights into both Kenyan and global economic trends.

In 2023, Kenya became an increasingly attractive destination for global investors, attracting 63 projects and an influx of $2 billion in capital, thereby creating 7,819 jobs across various sectors.

The majority of the FDI flows into Kenya were directed towards the business services, technology transportation, and warehousing sectors.

U.S. investments in Kenya

According to a recent report by Ernst & Young (EY), the U.S. was the leading investor, with 14 projects amounting to $748 million in capital investment and generating 3,764 jobs.

Notably, a significant portion of this investment came from a single pharmaceutical project as the U.S. company Moderna will set up its first manufacturing facility in Africa to produce mRNA vaccines, including COVID-19 shots.

The collaboration between the U.S. and Kenya has been further solidified through the U.S-Kenya Strategic Trade and Investment Partnership (STIP), launched in July 2022.

Investments in green energy

Investors are increasingly drawn to Kenya’s renewable energy sector, with a particular focus on CleanTech projects.

The lifting of a near-18-month suspension on licensing for new independent power producers (IPPs) has provided additional stimulus to the sector.

Consequently, the German government is set to contribute €112 million to support Kenya’s pursuit of a 100% renewable energy goal and the production of hydrogen.

Additionally, U.K. Prime Minister Rishi Sunak and Kenyan President William Ruto agreed to expedite six green energy projects in Kenya, amounting to KSh 500 billion (approx. US$4.1 billion) at the COP27 climate summit.

Among these projects is the Menengai Geothermal Project, a collaboration between the Geothermal Development Company (GDC) and Globeleq, featuring a planned 35MW capacity.

Furthermore, discussions have been revived between the Indian Oil Corporation and ONGC Videsh Ltd to acquire a stake in Tullow Oil’s Lokichar oil field, valued at over US$2 billion.

Investments from other African countries

Kenya witnessed a substantial inflow of FDI from other African nations, including Nigeria, Mauritius, and South Africa, and a keen interest from Egypt in Kenya’s manufacturing sector.

Uganda beats Kenya in FDI

Earlier, TUKO.co.ke reported that Kenya and Tanzania raked in $2 billion (KSh 313 billion) and $1.3 billion (KSh 203.4 billion), respectively, while Uganda got the largest share with $10.2 billion in FDI.

Although Uganda received the highest amount of FDI, Kenya remained the most attractive destination for investors when measured by the quantity of investments.

“Kenya is by far the largest destination in the region when measured by number of projects, while Uganda received the most capital via investment from France in the oil and gas sector,” read the report by Ernst & Young (EY).