Kenya reported a 68 percent increase in inward investment projects in 2017 thus making it East Africa’s leading economy.
This rebound was recorded despite political uncertainty in the second half of the year, following a prolonged election cycle according to the EY’s Attractiveness Report 2018.
British investors were particularly active, with 10 project commitments, followed by Dutch companies. The country’s fast-growing technology sector, nicknamed “Silicon Savannah,” continued to draw foreign investor interest.
TMT Foreign Direct Investment (FDI) projects in Kenya increased by 44 percent compared with 2016, largely because of a conducive environment, including a pool of well-resourced IT developers and a high smartphone penetration rate. In addition, the Kenyan government has been active in making the country a viable and competitive technology hub, formulating policies to drive this initiative.
According to the report, East Africa continued to register notable GDP growth in 2017, performing stronger than all other regions across the continent. For various reasons, other regions recorded slower growth, with some facing recession.
East Africa’s growth saw the region registering a notable 82 percent increase in the number of FDI projects compared with 2016. This evident rise is from a rather low base in 2016 when the region’s share of FDI projects fell sharply.
The FDI numbers in 2017 not only recovered from the prior year but also made the region Africa’s major FDI hub for the
Ethiopia was ranked as Africa’s second-fastest growing economy in 2017, and the fifth largest recipient of FDI projects, up by a striking 288 percent on the previous year.
Tanzania also posted a sharp rise in FDI projects, up by 59 percent from 2016. With nine projects, RHC attracted most of the capital, benefit from government investment in infrastructure, as well as private investment in the development of a regional hydrocarbons sector.
Major oil discoveries have also put Uganda on the investment map, with the country attracting 14 FDI projects in 2017, up from 9 in the previous year.