Discovering the best investments in Kenya can be a challenge without having a place to start. With this short but comprehensive post, you’ll be able to know why Kenya should be added to your investment portfolio for 2022, and the leading sectors in Kenya to invest in.
Table of Contents
- 10 Reasons to Invest in Kenya in 2022
- Best investments in Kenya in 2022 | Top 6 Sectors
- 3. Construction
Until the Covid-19 pandemic in 2020, Kenya was one of the fastest-growing economies in Africa having attained lower-middle-income status in 2014. Kenya has also successfully established a diverse and dynamic economy and serves as the point of entry to the larger, 300 million people East African market. The Kenyan economy is projected to grow by 5.4% in 2022. Below are reasons why Kenya should be on your investment radar in 2022.
10 Reasons to Invest in Kenya in 2022
1. Largest East African Economy
Kenya is the largest economy in East and Central Africa. It has shown resilience and strong growth with a rapidly growing urban middle class and increasing demand for high-value goods and services. According to data from KenInvest, the country is the dominant economy in the East Africa Community, contributing to more than 50% of the region’s GDP.
2. Large Market access
Kenya’s membership in regional economic blocs coupled with its strategic geographic position, it’s the gateway to the huge East African Community (EAC) market. This market serves over 135 million people and the Common Market for Eastern and Southern Africa (COMESA) market with over 450 million people. Additionally, Kenya is a beneficiary of several trade agreements. These include the African Growth and Opportunities Act (AGOA) which allows for quota-free and duty-free access to the USA market for over 6,000 items produced in Kenya and The new Africa Caribbean and Pacific-European Union (ACP-EU) Economic Partnership Agreement (EPA) which gives duty-free access to the EU among others.
Kenya has well-developed physical infrastructural facilities that are constantly being improved. It currently has four international airports, an extensive road and railway network, a modern deep seaport at Mombasa capable of handling bulk and other containerized cargo, an expanding, liberalized energy sector, and digital telecommunication networks. As a result, Kenya continues to develop as a financial, other services, and transport hub for the East and Central African region.
4. Kenya’s ranking in ease of doing business
According to the World Bank’s ease of doing business 2019 report, Kenya was at 56 out of 190 Economies.
5. Enabling Economic Policy Framework
The Kenyan Government has undertaken substantive economic liberalization and reforms measures to promote trade and investment. These include the abolition of price, interest rate and exchange controls, and the removal of some import licenses. The Government has also instituted measures to sustain macro-economic stability such as prudent fiscal and monetary policies, improvements in economic governance, and privatization of some public enterprises.
6. Supportive Legal Environment
The Kenyan Constitution protects private property and provides safeguards against expropriation of such property without compensation. Kenya is also a signatory to Multilateral Investment Guarantee Agency (MIGA), an agency of the World Bank, and a Member of the International Council of Settlement of Investment Disputes (ICSID). In case of Commercial disputes, Kenya has a Commercial Court under the Kenyan Judiciary.
7. Well established private sector and entrepreneurial tradition
Kenya pursues a mixed economy and her dynamic and diversified private sector comprises numerous small-scale local enterprises, medium-sized businesses, and multi-national companies. They provide an array of manufactured goods, business services, and agricultural products for local consumption and also for export. Investors will find raw materials, components, and specialized professional services of international standards readily available.
Best investments in Kenya in 2022 | Top 6 Sectors
With the reasons to invest in Kenya clearly outlined, here are the best investments in Kenya with a focus on the top 6 sectors.
One of the best investments in Kenya is the energy sector. One of the biggest undertakings in the energy sector is the 400MW Meru Wind project, which will be undertaken in three phases, provides opportunities for EPC contractors to design, supply, install, test, and commission Phase 1 of the project. The 140MW Olkaria 5 project that is being explored by Kenya Electricity Generating Company (KenGen) is endowed with geothermal energy for the provision of steam and power. Investors in the project are set to benefit from opportunities such as advisory services, consultancies, financing, and EPC contract among others.
Another viable project to invest in the energy sector is the 1.5MW Gitwiki Hydro Falls, in Meru County. A public-private partnership project, the payback period of the development is seven years. According to KenInvest, the annual projection period is US$657,000. Kandebene Wind Project in Tigania East is proposed to generate 50MW. According to KenInvest, the project has an annual revenue project of US$14.45million with an estimated payback period of seven years. These are only a few of the exciting investment opportunities in this sector.
Another Kenyan sector to invest in 2022 is transport. Kenya’s road to improving its infrastructure has seen more and more transport projects being started to meet Vision 2030.
Some of the best transport sector projects to invest in 2022 include:
The Lamu Port Southern Sudan Ethiopia Transport Corridor Project (LAPSSET). This is one of the most viable projects to invest in 2022. Investors of the project will use the build-operate-transfer investment method. Another project to consider investing in is the Nairobi Commuter Rail whose promoter is Kenya Railways Corporation. According to the manual by KenInvest, the project is seeking partners to run the commuter service of the rail and will include the provision of rolling stock. Learn more about them at kenyahouse2020.ke/invest-in-kenya/.
The third sector to invest in is construction. The construction industry in Kenya is driven primarily by two key infrastructure sectors: transportation and building/housing. According to Business Monitor International (BMI), construction in Kenya was expected to grow by 4.5% in 2021 and steadily increase in 2022.
Another of the best investments in Kenya is the manufacturing sector. The Kenya manufacturing sector has exciting projects like the Shimoni cement productions project. With a requirement of an estimated investment of US$249.428million, it will see the development of a cement production plant intended for domestic and export use. The sector also has other exciting projects to invest in. These include Flat Glass Production which is promoted by Coast Development Authority and Dongo Kundu Special Economic Zones which is being promoted by the Ministry of Industrialization and Enterprise Development.
Kenya ICT is also one of the best investments in Kenya for 2022. This year is expected to usher in an era of increased ICT economic-related activities in the country. This has been evident in the growth of e-business, mobile money transactions, and ICT startups in the previous years. Some of the opportunities for investment in ICT are:
- Film animation production
- Cyber security and anti-fraud systems
- Mobile and web business transactions
- Mobile and web applications
Another sector that is a good investment opportunity in Kenya is the health sector. One such project is Kenyatta National Hospital seeking to build a 300-bed hospital in its private wing. In a build-operate-transfer partnership, the investor will finance, construct, operate and maintain the envisaged seven-story building, a project that will need an estimated US$36million. Other projects in the sector include those promoted by the Ministry of health such as equipment lease and infrastructure improvement, an oxygen plant, and ICT services at Kenyatta National Hospital.
With this short yet comprehensive post on the best investments in Kenya, you are prepared to grow your investment portfolio by investing in East Africa’s powerhouse, Kenya in 2022.