Kenyan foreign direct investment outlook
Kenya’s foreign direct investment projects went down by 57.9 per cent in 2016.
Tue, 31 Oct 2017 14:32:48 GMT
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AI Generated Summary
- Political instability in Kenya and other African countries has posed challenges for attracting foreign direct investments.
- Global events like Brexit and the Trump administration impact FDI by highlighting the significance of stability in investment decisions.
- Tax incentives play a crucial role in attracting FDI, but must be carefully designed to promote competitiveness and economic growth.
Kenya's foreign direct investment projects experienced a significant decline of 57.9 percent in 2016, raising concerns about the country's economic stability. The International Monetary Fund has indicated that successful FDI attractors do not necessarily need to offer tax holidays or related incentives to draw investors. However, in light of the recent political volatility following the elections on August 8th and October 26th, there is a growing debate on whether incentivizing investments might be necessary to stimulate economic growth. Craig Kiggen, YPO Africa Regional Chair and Partner at Citadel Investments, shared insights on the impact of political instability on FDI during a recent interview on CNBC Africa. He emphasized the crucial role of stability in attracting investments, highlighting the challenges faced by investors in uncertain political climates. Kiggen also discussed the influence of global events such as Brexit and the Trump administration on FDI, underscoring the importance of political and economic stability for sustainable investment opportunities. The discussion delved into the complexities of tax incentives in attracting FDI, with Kiggen cautioning against protectionist policies that could hinder competitiveness and limit growth. Additionally, the correlation between FDI and World Bank Doing Business rankings was explored, shedding light on the factors that influence investment decisions. The interview provided valuable insights into the dynamics of FDI in the current market landscape, emphasizing the need for strategic measures to navigate political uncertainty and spur economic development.