Kenya had the biggest increase worldwide in FDI during 2008, according to greenfield data from fDi Intelligence.
From 2003 to 2007, crossborder investment tracking service fDi Markets only recorded two international investment projects in Kenya. That figure rose to 25 in 2008, representing a 1150% increase, the highest of any country monitored in 2008.
By sector, fDi Intelligence recorded the highest number of projects in the communications sector, with financial services second, and software and IT, tying with beverages for third place.
Communications firms investing in Kenya include Finland’s Nokia, which launched a regional research centre in Nairobi, announced last October. The company said that the centre will enable it to gain a better understanding of the needs of African consumers. Nokia Research Africa will work with universities and non-government organisations to develop prototypes of devices suitable for the African market, with an eye on offering benefits in healthcare and education. Nokia researchers will also use the centre as a base to study the telecommunication services sector on the continent.
In line with the growth of the mobile communications business in Africa, the communications sector in Kenya brought in $82.8m-worth of investment, representing a huge jump from the previous year’s figure of $10.9m. In the five years that fDi Intelligence has been tracking greenfield investment in Kenya, 66% of the total was recorded in 2008.
However, in terms of capital investment, fDi Intelligence figures show that financial services represented by far the largest investment in 2008 at $155m, up from $51.7m in 2007. Companies investing in the sector include Dubai Bank, which plans to open four branches to strengthen Islamic banking in Kenya. South Africa’s Standard Bank Group has moved its global government and international organisations office to Nairobi, and Bank of India has opened two branches in the country.
The automotive sector was the third largest sector for investment after communications and financial services. India’s Tata Group is building a bus manufacturing plant in Kenya to serve the eastern and central Africa markets, including Burundi, Ethiopia, Kenya, Malawi, Rwanda, Sudan, Tanzania, Uganda and Zambia. The company already assembles its light commercial vehicles and pick-ups in Mombasa in collaboration with Marshall East Africa at Associated Vehicle Assemblers.