OUTLINE
  • Introduction
  • Evolution of FDI’s in Kenya
  • Challenges to FDI Inflows into Kenya
  • Kenya’s strategic response to FDI Inflow challenges
  • Kenya’s FDI policies: Openness OR Restrictions
  • Restrictions on FDI
  • Business Facilitation
  • Legal Regime
  • Kenya’s International posture
  • Institutional framework: FDI laws and regulations
  • Industrial policies impacting FDI
  • Corruption and security environment
          INTRODUCTION
  • FDI is investment in foreign assets undertaken by a 
    foreign national for purposes of production of goods 
    and services which are to be sold either domestically 
    or exported overseas (Investment Promotion Centre 
    Act, Cap 518).
  • FDIs are considered to be important in promoting 
    economic growth in developing countries by providing 
    domestic small and medium sized with linkages and 
    markets for the supply of goods and services.
  • Kenya’s record in attracting FDIs has been poor 
    despite having been the favoured destination in the 
    1960s, 70s and early 80s.
    EVOLUTION OF FDIs IN KENYA
  • Kenya has had along history with foreign firms. From 
   independence through the 1970s and part of the 
   1980s it was one of the most favoured destinations in 
   East Africa.
  • The then relatively high level of and good 
   infrastructure, market size, growth and openness to 
   FDI at a time when other countries had relatively 
   closed regimes.
  • Kenya had relative political stability and security.
    EVOLUTION OF FDIs IN KENYA cont’d
  • FDI started a low of around US $ 10 million a year in 
   early 1970s to peak at US$ 60 million in early 1980.
  • The economy deteriorated in the 1980s along with 
   corruption and bad governance.
  • Inconsistency in economic policies and structural 
   reform measures together with crumbling public 
   services and infrastructure ensured decades of low 
   levels of FDI inflows.
  • Kenya has not recovered from this situation to date.
  • FDI inflows in the period 1981-1999 averaged only US 
   $22 million per annum.
   EVOLUTION OF FDIs IN KENYA cont’d
  • The relative FDI levels in 1970s and1980s were never 
   high even by developing country standards.
  • FDI stocks were only 7.5 % of the GDP in 2003 
   compared to 15.3% for Africa and 31.5% for 
   developing countries (UNCTAD,2005).
  • Kenya’s regional supremacy in attracting FDI 
   disappeared as soon as Tanzania and Uganda started 
   reforming their economies and opening up to foreign 
   investors in the early 1990s.