Kenya Emerges as Top African Investment Destination in 2024 Deloitte Survey

Kenya has emerged as a premier investment destination in Africa, alongside South Africa, Nigeria, and Tunisia.

The 2024 Deloitte Africa Private Equity Confidence Survey (PECS) highlights Kenya's attractiveness, attributing it to recent policy reforms and regulatory adjustments. These changes have positioned Kenya as the most favoured location for investment in Africa over the coming year, with investors anticipating economic stabilization. The Kenyan government's initiative to privatize 26 public institutions is expected to foster a more dynamic, private sector-driven economy. However, Deloitte emphasizes that the success of these privatizations hinges on the government's ability to optimize the process. Recommendations include streamlining regulatory frameworks, simplifying transaction approvals, and enhancing public awareness to maximize investor inflow.

Deloitte underscores the crucial role of private equity in economic recovery, noting its resilience and aptitude for identifying opportunities. Kevin Kimotho, Deloitte East Africa's Private Equity Leader, observes that the favourable conditions across East Africa present opportunities for profitable exits and the potential to shape the region's economic future. The survey reveals a significant shift in investor sentiment, with 62% of respondents expressing optimism about Kenya's economic prospects for the coming year, a marked improvement from the previous year's cautious outlook. This positive assessment aligns with a recent Brand Africa survey, which ranked Kenya among the nations contributing to Africa's greatness and as the most admired country in East and Central Africa.

Further bolstering Kenya's investment appeal, the Rand Merchant Bank's "Where to Invest in Africa 2024" report ranks Kenya as the top investment destination in the East African Community (EAC) and eleventh in Africa. The report cites Kenya's robust fintech sector, including mobile payments and agritech, coupled with its stable economy, as key factors attracting investors. Kenya's economic significance is accentuated by its contribution of nearly half of the EAC's GDP. The Kenyan government has set an ambitious target to double Foreign Direct Investments (FDIs) in the medium term, aiming to increase from $800 million to at least $1.6 billion. While current foreign investments are considered modest relative to the country's economic size and development level, Kenya continues to attract investors from the United Kingdom, Mauritius, the United States, South Africa, and France.

The majority of FDI stock is concentrated in finance and insurance, followed by information and communication, wholesale and retail, and manufacturing sectors. Kenya has also distinguished itself as a regional leader in clean energy development, with over 90% of its on-grid electricity derived from renewable sources, primarily geothermal. The country's significant investments in solar and wind energy demonstrate its commitment to achieving Sustainable Development Goal 7 (Affordable and Clean Energy). Notably, geothermal energy accounts for almost half of Kenya's electricity generation, the highest proportion globally, with renewables constituting 79.7% of the country's total electricity production.

The 2024 Global Foreign Direct Investment (FDI) Opportunities report further reinforces Kenya's positive investment outlook, ranking it third globally among countries expected to maintain strong investment momentum into 2024. This impressive ranking places Kenya ahead of all European nations and solidifies its position as a leading investment destination in Africa.