Kenya has seen a substantial increase in foreign direct investments (FDIs) from Dubai, with the total reaching $253 million (Sh38.3 billion) in the five-year period leading up to June 2023. This surge in investment highlights a growing interest in various sectors such as food processing, financial services, IT, and software. Mohammad Ali Rashed Lootah, president and CEO of Dubai Chambers, foresees further growth in FDIs from Dubai as more companies from the Gulf nation seek opportunities in Kenya.
Key Points:
- Projected Growth in FDI:
- Mohammad Ali Rashed Lootah expressed confidence in the positive impact of trade and investment, emphasizing that an increasing number of Dubai-based companies are targeting investments in Kenya. He noted that discussions with Ken Trade and various business groups in Kenya have identified promising investment opportunities. As evidence of this interest, 19 companies from Dubai recently engaged in business matching meetings in Kenya, indicating a strong inclination towards investments in the Kenyan market.
- Expansion of Non-Oil Bilateral Trade:
- The value of non-oil bilateral trade between Kenya and Dubai experienced a notable seven percent growth, reaching $2.1 billion (Sh318.28 billion) in the preceding year compared to the previous year. This uptick underlines the strengthening economic ties between the two nations.
- Diverse Investment Sectors:
- Dubai-based firms have made significant investments in various key sectors of the Kenyan economy, including financial services, telecommunications, food and beverages, industrial equipment, transportation and storage, as well as software and IT services. Notable examples include the Infrastructure Corporation of Africa LLC’s acquisition of a 60 percent stake in Telkom Kenya and the bid by Pioneer General Insurance to purchase Sidian Bank shares.
- Upcoming Ventures in Dairy and Construction:
- Recently, two Dubai-based companies announced their plans to enter Kenya’s dairy and construction sectors. Build Station aims to establish its presence in Kenya as the hub for its operations in East Africa, while Nutridor, a food and beverage company, is investing $15 million (Sh2.25 billion) in a dairy processing plant targeting the Kenyan and Tanzanian markets.
- Broader Regional Impact:
- Nutridor, with customers in over 15 countries and a presence in six oil-producing Gulf Corporation Council nations, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, demonstrates the potential for these investments to have a broader regional impact.
Conclusion: The surge in foreign direct investments from Dubai into Kenya underscores the growing economic partnership between the two nations. The diversity of sectors receiving investments, from financial services to food processing, highlights the broadening scope of economic collaboration. As these investments continue to flow, Kenya stands to benefit from enhanced economic activity and expertise exchange, ultimately contributing to the nation’s economic growth and development.
