Capital Markets

Finance, insurance sector receives the lion’s share of FDI

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The sector received Sh33.25 billion worth of FDI in 2015. FILE PHOTO | NMG

The financial and insurance services sector was the largest recipient of foreign direct investment (FDI) inflows, according to the latest official survey.
The sector received Sh33.25 billion worth of FDI in 2015 compared to Sh31.04 billion in the previous year translating to a 7.1 per cent increase, data from the Kenya National Bureau of Statistics (KNBS) shows.

This is KNBS’ fourth official report since the first one was issued in 2010.

Due to the increased inflows, the stock of liabilities in the Kenyan financial and insurance sector rose by 10.5 per cent to Sh203.1 billion, averaging 34.4 per cent of the total stock of FDI liabilities during the year.

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The second highest proportion of the FDI stock was in manufacturing, accounting for 20.7 per cent in 2015 compared to 21 per cent in the previous year.

In terms of annual growth in net FDI inflows, the sector with the highest was construction at 60.4 per cent where Sh15.4 billion came in against Sh9.6 billion the previous year.

“The highest growth in the stock of FDI liabilities was recorded in the construction sector from Sh9.575 billion in 2014 to Sh15.444 billion in 2015,” said the survey.

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Other significant growths of FDI liabilities were recorded in education; electricity, gas, steam and air conditioning supply; and information and communication sectors at 30.2, 21.4 and 20.8 per cent, respectively. Europe remained the largest source of foreign investments.