Kenya Among Top Key Economic Hubs in Africa-EY

Kenya falls at the second position of key hub economies in Africa together with South Africa, Egypt, Morocco, and Nigeria.

These key economies, according to the financial services advisory firm EY’s latest ‘Africa Attractiveness’ report collectively attracted a total of 58 percent of the continent’s total Foreign Direct Investments (FDI) projects in 2016.

The report further noted that East Africa remains as the most buoyant of all regions across Africa, with the four key economies; Kenya, Ethiopia, Tanzania, and Uganda poised for growth of over 6 percent for the rest of this decade.

South Africa, on the other hand, a remains as the leading foreign direct investment (FDI) destination in Africa, with a 6.9 percent increase in FDI projects in 2016. Morocco regained its place as Africa’s second-largest FDI recipient with a 9.5 percent increase in projects while Egypt was third, attracting 19.7 percent more FDI projects than the previous year.

Despite poor performance in 2016 where FDIs dropped by 57.9 percent, Kenya managed to score highly in the long-term outlook on governance and human development (16 out of 20), economic diversification (10 out of 20), infrastructure and logistics (16 out of 20) and had an improved business environment rating that stood at 10 out of 20.

The continent-wide surge in capital investment was primarily driven by capital-intensive projects in two sectors, namely real estate, hospitality and construction, and transport and logistics. The continent’s share of global FDI capital flows increased from 9.4 percent in 2015 to 11.4 percent. This made Africa the second-fastest growing FDI destination by capital.

EY Africa CEO, Ajen Sita disclosed that the mixed picture in the continent is not surprising since Investors are likely to remain softer over the next few years due to Africa’s heightened geopolitical uncertainty and greater risk aversion.