According to the International Finance Corporation (IFC), developing countries including Kenya could expect a decline in foreign direct investments in the next two years. IFC estimates foreign direct investments to drop at least 40 percent in 2020 and 2021 from its 2019 baseline, a local media reported.
The decline in foreign direct investments in the country could lead to job losses as private firms are unable to cope with the serious effects of the Cover-19 pandemic. It appears that emerging markets have lost $100 billion on this front this year in light of the current circumstances.
Last year, Kenya introduced an investment policy to enhance foreign direct investment in the country. The policy comprises seven core principles that point to openness, transparency and investor centeredness among others. The government of Kenya was actively working on positioning the country as a favourable investment destination for international investors.
Peter Munya, Cabinet Secretary in the Ministry of Industry, Trade and Cooperatives, told the media that, “The ultimate objective is to position Kenya as a premier investment destination as well as a global leader in investment attraction and retention,”
In fact, Kenya Investment Authority observed that the new Kenya Investment Policy will provide a roadmap to enhance public and private investments in the country resulting in at least 32 percent GDP by 2030, media reports said.
Foreign direct investments play a significant role in Kenya’s economic development. Last December, the Kenya National Chamber of Commerce and Industry said that local businesses have attracted Sh300 billion in investments from foreign countries.