Tuesday November 27 2012

Kenya, South Africa and Morocco and Kenya top Africa's investment list

By Agencies

Kenya has been ranked among the top destinations for foreign direct investments in Middle East and Africa, thanks to the on-going investments in infrastructure.

The latest study by FDI Intelligence, a research arm of the London based Financial Times newspaper, ranks Kenya sixth in the Middle East and Africa, and third in Africa after South Africa and Morocco.

The report released last week shows that Kenya attracted 55 projects last year compared with South Africa’s 154 and Morocco’s 70.

The number of projects coming to Kenya rose 77 per cent from 2010, pushing it ahead of Nigeria, and Egypt.

However, the other East African countries did not feature in the ranking.

“Growth in the number of projects coming to Kenya was the highest compared with Nigeria’s 29 per cent and South Africa’s 57 per cent. Egypt suffered a 29 per cent drop in new projects due to the Arab Spring, even as Morocco registered a 40 per cent surge in new projects,” said the report.

Inflows into the country were boosted by increased fundraising by oil and mineral prospecting companies seeking a share of Kenya’s rising mineral resource profile. Other projects involved infrastructure, real estate, manufacturing and tourism.

Legal fraternity

The Financial Times ranked Kenya 10th in infrastructure systems and position eight in human resource capacity, attributes which are vital in attracting foreign direct investments.

“This attests to the ongoing institutional reforms in the country, development in infrastructure projects and the human resource capacity in the country,” said Esther Koimett, the Investment Secretary at the ministry of Finance.

Ms Koimett said Kenya has some of the best human capital, especially in the legal fraternity, which is instrumental in in guiding new investors through regulatory requirements.

The highest number of projects were coal, natural gas, and oil, real estate, hotels and tourism, software, IT services and communications.

The International Monetary Fund estimates that Kenya received up to $5 billion (Ksh425 billion) in FDI last year for both new and existing projects.

 The country was not part of the top 10 that are most friendly to business nor those with good quality of life.

Friendliness to business was measured by indicators such as the number of days it takes to set up a business, the cost of hiring and firing among others where Kenya was not among the top ten give the bureaucracies in getting a license.