Kenya loses battle for FDIs to African peers
By John Otini, June 24, 2025Kenya is conspicuously absent from the list of top-performing African destinations for foreign direct investment (FDI) in 2024, even as inflows to the continent rose sharply.
According to the latest World Investment Report 2025 by the United Nations Conference on Trade and Development (UNCTAD), FDIs in Africa increased by 75 per cent, marking a record year for the continent.
However, Kenya did not feature among the top recipients, nor did it attract any major greenfield manufacturing projects despite a global uptick in that sector.
The UNCTAD report attributes Africa’s impressive performance to a few large-scale transactions, most notably a development megaproject in Egypt valued at 35 billion dollars.
Even after excluding this outlier, Africa still recorded a 12 per cent rise in inflows, signalling growing investor appetite for the region. In contrast, Kenya failed to attract headline-making deals or significant increases in investment volumes.
“FDI flows to developing countries were flat, despite sizeable increases in Africa and in South-East Asia,” the report notes, adding: “Ten recipients account for three quarters of developing-country inflows.” Egypt was the top gainer on the continent, moving from $10 billion in 2023 to 47 billion dollars in 2024. Other African countries, including Nigeria, Morocco, and South Africa, also showed significant improvements.
Kenya’s absence is even more striking when viewed against the backdrop of rising global interest in manufacturing. Greenfield project announcements in manufacturing sectors grew by 5 per cent in 2024, continuing a recovery trend that began in 2023.
These projects were concentrated in electronics, semiconductors, machinery, and automotive industries, often spurred by strategic industrial policies and supply chain rebalancing.
“The number of greenfield projects announced in industrial sectors increased by 3 per cent, although their value fell by 5 per cent,” the report states.
“The total value remained high, at $1.3 trillion, the second-highest level on record.”
Countries such as India, Vietnam, and Mexico were among the biggest beneficiaries of this manufacturing investment wave.
In Africa, Egypt and Morocco attracted semiconductor and automotive assembly projects, positioning themselves as hubs for future supply chain activity.
Kenya, despite its long-standing ambition to industrialise, did not appear in the list of destinations for large-scale manufacturing projects. The report does not cite any new major announcements targeting Kenyan manufacturing sectors, highlighting what appears to be stagnation in industrial FDI.
Greenfield projects
“Semiconductor-related projects grew further in 2024. The number of announcements remained stable, but with four of the top ten greenfield projects in the chips industry, aggregate values increased by 140 per cent to 120 billion dollars,” the report states. Kenya did not attract any semiconductor projects during this period.
The country’s digital economy has also failed to capitalise on global trends. While greenfield project values in digital industries more than doubled globally—from $37 billion in 2023 to $77 billion in 2024—Kenya did not make it into the list of preferred destinations.
The report emphasises that digital sectors such as internet platforms and data centres experienced strong growth, driven by demand for artificial intelligence applications and cloud computing infrastructure.
“Digital economy sectors remained among the most dynamic FDI segments in 2024. Project numbers in digital services, platforms and e-commerce rose by 17 per cent and aggregate values doubled,” UNCTAD notes.
In contrast, Kenya continues to face challenges in attracting this kind of capital-intensive investment, which has increasingly become a priority for multinationals seeking to diversify production and service delivery networks. Investors are focusing on regions with stable policy environments, robust digital infrastructure, and clear industrial incentives.
The gap is further illustrated in the breakdown of project types. Greenfield project announcements, considered a forward-looking indicator of investor sentiment, increased by 3 per cent globally in 2024 to reach more than 19,000 projects.
However, most of this growth was absorbed by countries that offer competitive logistics, skilled labour, and investor-friendly regulatory frameworks.
“The increase in project numbers was driven by investment in manufacturing industries, especially in strategic sectors such as semiconductors and electric vehicle components, often supported by industrial policies,” the report adds.
UNCTAD also highlights that many developing countries are still struggling to align their digital and industrial strategies with broader investment promotion frameworks.
“While many developing countries have adopted digital strategies, these often exist in silos – disconnected from broader industrial, sustainability and investment agendas,” the report says.
Kenya’s FDI performance in 2024 suggests that the country is being sidelined in key growth sectors, particularly manufacturing and digital infrastructure.
As other African economies benefit from supply chain shifts and targeted industrial investments, Kenya’s relatively muted profile in the report raises concerns about its ability to compete for global capital in the future.