Kenya ranked as third most preferred investment destination in Africa

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Kenya's Capital, Nairobi.
Kenya's Capital, Nairobi. PHOTO/COURTESY: African Resort International

Kenya has been ranked as the third most preferred investment destination in Africa according to a new report by EY (Ernst & Young) dubbed Turning Tides, Africa Attractiveness October 2018 report.

According to the report, Foreign Direct Investments (FDI) project numbers in Africa increased by 6 percent in 2017 despite a recorded weak growth.

The report points out that East Africa continued to register notable GDP growth in 2017, performing stronger than all other regions across the continent.

“East Africa becomes the biggest regional attractor of FDI, with Kenya leading. East Africa’s growth saw the region registering a notable 82 per cent increase in the number of FDI projects compared with 2016,” the report reads in part.

Kenya is closely followed by Nigeria and Ethiopia at position four and five respectively with South Africa and Morocco taking positions one and two respectively.

The report points out that the US remains Africa’s largest investor with European countries following closely.

“US companies launched 130 projects in 2017, against 91 in 2016. Western Europe on the other hand initiated 17 percent more projects in 2017, after a drop in 2016 in terms of FDI,” the report says.

Despite Kenya leading the pack in the East African region, the EY report says Rwanda is by far, Africa’s most successful country in terms of attracting FDI.

This the report says is evidenced by the fact that Rwanda ranks as one of Africa’s most business-friendly destinations. It is also one of the continent’s most consistent rapid growth economies

“To build that analysis, FDI projects have been tracked against the size of the economy, and its score on the annual World Bank Ease of Doing Business ranking. Through this analysis, it appears that countries with strong growth rates and that adopt more business-friendly policies tend to perform better in attracting FDI,” the report reads.

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