Investment Policy Review - Kenya

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Kenya was a magnet for foreign direct investment in East Africa in the 1960s and 1970s. The Review highlights, however, that the country has underperformed significantly in terms of FDI attraction in the past couple of decades. The reasons include poor or inconsistent economic policies, deteriorating infrastructure and poor growth performance. Rising corruption and insecurity also discouraged FDI throughout the 1980s and 1990s. The Review warns the government on the possible drawbacks of the recently adopted Investment Promotion Act, which introduces minimum capital requirements for FDI entry. Subsequently, the Government has proposed amendments to Parliament to lift these requirements.




Kenya has had a long history of economic leadership in East Africa as one of its largest and most advanced economies. However, inconsistent efforts at structural reforms and poor policies over the past couple of decades, have generated a prolonged period of decline in development indicators and significantly eroded the leadership position at a time when other countries in the region have made significant strides. While Kenya was a prime choice for foreign investors seeking to establish a presence in Eastern and Southern Africa in the 1960s and 1970s, poor economic policies and inconsistent efforts at structural reforms, growing problems of corruption and governance, and the deterioration of public services have discouraged FDI since the 1980s.


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