UN Agency Report: Kenya Foreign Direct Investment net flows drop by Sh31bn

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The latest figures for Kenyan’s foreign direct investment net flow show a drop of $294 million(Sh31.3 billion). This is according to the annual estimates from the international agency, the United Nations Conference on Trade and Development(UNCTAD).

In the report on Tuesday, the UN body puts the FDI estimates at $1.33 billion worth of inflows for the year 2019. The figures represent a significant drop of 18.08 percent from the previous year, $1.63 billion(Sh173.15 billion).

From the data, a general decline is expected to be as much as 40 percent of FDI into Africa countries. “As of April 2020, the number of cross-border M&As targeting Africa had declined 72 percent from the monthly average of 2019”, wrote UNCTAD researchers.

Ethiopia continued to dominate with Addis Ababa attracting $2.51 billion(Sh267.93) in FDI Cash amidst the liberalization of critical sectors.

Uganda and Tanzania also made impressive gains with both emerging with increases of 20 percent and 5.3 percent, respectively.

As a means to curb Kenya’s drop, Treasury Secretary Ukur Yatani dropped investment deduction for hotels and manufacturing plants. Building any of these will now see investors enjoy a 50 percent deduction or a maximum of 150 percent in the first year of use.

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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