Investing in African countries is something commonly attributed to only aid organisations or investors from other countries outside the continent.
Investors from African countries do however invest in other countries on the continent and data has come back to show how, currently, Kenya has overtaken SA in that regard.
A new study carried out by financial consulting firm Ernst & Young shows how Kenya has overtaken SA with regard to the number of projects undertaken in other African countries in 2015.
The data showed that Kenya invested in 36 projects last year in other African countries, a figure higher than South Africa’s 33 projects.
In terms of global ranking as a source of foreign direct investment (FDI) to the African continent, Kenya also shot up a couple of spots and now occupies the seventh position for activities in 2015. That is a six place rise from 2014 when it was in 13th position.
The report released Monday said;
“Activity was largely concentrated in services, with financial and business services together accounting for nearly 78 per cent of FDI projects originating from Kenya”
“Many Kenyan companies are playing the role initially adopted by South Africa’s corporate sector, who were the first to venture outside their home markets”
Although Kenya overtook SA in number of projects undertaken, South Africa, however, beat Kenya in terms of the worth of the projects as it had Sh200 billion compared with Kenya’s Sh100 billion.
The report also noted that most of Kenya’s intra-Africa investments went into countries within the East African Community (EAC). According to them; “East Africa is the primary destination for Kenyan investors, in line with overall sub-regional integration plans”.
In the past decade, Kenyan banks and retail businesses, for example, have ventured into the region, including in the volatile South Sudan and Somalia.
The report also goes beyond the fact of how Kenya overtook SA to show that Africa attracted foreign direct investment from a diverse and growing group of investors.
In 2015, the US retained its position as the largest investor on the continent, despite a four per cent fall in FDI projects. Meanwhile, former investors who had fallen back like; the UK, France, the UAE and India, expressed renewed interest in Africa.
Italy and Luxembourg joined the ranks of largest 15 investors in 2015. Overall, intra-African FDI projects rose 2.8 per cent in 2015, with capital investment up 6.2 per cent.