Kenya remains an attractive investment destination for foreigners despite disruptions occasioned by the Covid-19, a new survey shows.
According to the Foreign Investment Survey 2020, 80 per cent of the respondents indicate that they would neither relocate nor close shop in the in the coming years.
The survey notes that the pandemic had adverse effects on the magnitude and composition of flows and stocks of foreign assets as world economies responded to the economic shocks associated with the virus.
According to a UN report, Kenya’s Foreign Direct Investment (FDI) inflows dropped to $381 million (Sh41.14 billion) in 2020, hurt by Covid-19 restrictions.
The United Nations Conference on Trade and Development (UNCTAD) estimates FDIs amounted to $717 million (Sh77.44 billion) in 2020, a 34.7 percent drop compared with a revised $1.1 billion (Sh118.58 billion) a year earlier.
In the survey done by CBK and the Kenya National Bureau of Statistics , 97 per cent of respondents indicated that the pandemic had impacted their businesses in several ways.
These include disruptions on access to markets (50.5 per cent), supply chain (48.8 per cent) and levels of employment (37.5 per cent).
In response to the effects of the pandemic , 90 per cent of respondents indicated that they would invest in digital technology to digitise their investments.
On the other hand, 84.2 per cent say they would diversify while 74.8 per cent indicated an intention to scale down investment in the next one year.
“Despite the challenges posed by the pandemic, majority of the respondents indicated they would not close down or relocate,” says the survey.
On ease of investing in the county, 36.7 per cent of respondents indicated that it takes long to get power connection in the country, 50.3 per cent said the cost of electricity had worsened.
Similarly, 21.8 per cent and 21.4 per cent of enterprises indicated that supply of water and other utilities, and the cost of credit had worsened.
Further, 36.5 per cent and 35.3 per cent of the respondents indicated that it takes long to acquire construction permit and work permits, respectively.
In contrast, 38.1 per cent and 37.7 per cent of the respondents indicated that it takes a short time to get a business licence and register with the tax authorities, respectively.
For the rest of the factors such as environment license, business credit etc, majority of respondents indicated moderate time in acquiring them.
The survey targeted a total of 708 enterprises.
In July, President Uhuru reiterated the findings of this survey saying Kenya remains one of the most attractive investment destinations in Africa.
Uhuru spoke in the United Kingdom where he invited investors to tap into emerging business opportunities in Kenya.
He showcased 10 investment opportunities worth over $5 billion that are immediately available in Kenya under the PPP framework, among them; Nairobi Smart Street Lights Project, Nairobi Bus Rapid Transport System, Intelligent Traffic Management System Project and Galana Kulalu Food Security Project.
The country is currently in plans to set up the Nairobi International Finance Centre that seeks to position the country as the first stopover for foreign investors targeting the rest of the continent.
The centre hopes to attract institutional investors who will offer a range of services in the financial market.
It aims to have raised over Sh200 billion in investments by 2030.