- CBK projects a record $4.6 billion foreign investment inflow for Kenya.
- Recent international borrowings bolster Kenya's foreign investment prospects.
- Interest rate reductions in developed economies enhance Kenya's appeal to foreign investors.
Kenya projects its highest foreign investment income in 3 years
The Central Bank of Kenya (CBK) anticipates a larger figure from foreign investments than the country has recorded in the past 3 years. The bank deduced that around Sh733.9 billion ($4.6 billion) would be realized from foreign inflows. This projection is based on positive trends in the Kenyan economy.
Kenya's central bank
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According to the Kenyan business news publication, BusinessDaily, Kenya plans to collect over $4.6 billion in income from foreign investments, the highest amount since 2021.
The CBK noted that in 2023, its financial account closed at Sh558.4 billion ($3.5 billion) comprising Sh72.9 billion ($457 million) in foreign direct investment.
The bank's projection is based on the resumption of foreign investment flows into the economy and increased disbursements from Kenya's multilateral lenders and development partners.
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“We expect a total of $3.5 billion in 2023 and $4.6 billion in 2024. This would include portfolio inflows, foreign direct investments as well as disbursements from our development partners, multilateral institutions, and regional partners,” Kamau Thugge, the bank’s governor said.
In the two months of the new year, the East African country has benefited greatly from borrowings from abroad, notably Sh109.6 billion ($684.7 million) from the International Monetary Fund (IMF) in January.
The Trade and Development Bank also authorized a loan of Sh61.6 billion ($385 million) to the Exchequer last month.
Approximately Sh15.1 billion (€88 million) is expected from the African Development Bank and Sh240.2 billion ($1.5 billion) from the World Bank.
Interest rate reductions in developed economies, which are perceived as cushioning new inflows into advanced and frontier economies, are predicted to provide Kenya greater appeal as a location for international investment.
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Additionally, Kenya’s new currency gains are another reason why foreign investors could be interested in pouring money into the Kenyan economy.
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