Foreign Direct Investment Trends Of Kenya

In order to be able to understand Kenya’s contribution to the world’s market, it is first beneficial to know the relative location and actual location. The relative location of Kenya is within Africa, which is south of the European countries. Kenya is north of Ethiopia, to the right of Uganda, and borders the Indian ocean. Because of the closeness of these border countries, there is a sense of connectivity to these countries because they all speak the same base language, which is Swahili. The actual location of Kenya is 1 degree north and 38 degrees east. Kenya follows along the invisible equator

Global Foreign Direct Investment (FDI) fell by 18 per cent to $1.3 trillion in 2012. This decline was in sharp contrast to other key economic indicators like GDP and unemployment registered positive growth at the global level (United Nations, 2013). The economic fragility and policy uncertainty in a number of economies has caused a domino effect causing concern among investors. However, FDI flows to developing countries prove to be more resilient than flows to developed countries, recording their second

Kenya is also the preferred entry point for companies wishing to expand further in the region. Moreover, East Africa’s largest economy is one of the most innovative on the African continent, which bodes well for future economic development.

After opening of the trade barriers in 1991, the foreign investment inflows have increased enormously. Foreign capital, which actually plays an important role in increasing productivity of labor and accumulation of foreign reserve in developing countries to meet the current account deficit , is consist of foreign direct investment (FDI) and foreign portfolio investment(FPI). Both have worked as an instrument of global economic integration and stimulation. Apart of providing access to the foreign capital FDI also offers modern era technology, tools of creativity, desired skill sets and other complementary skills. In addition of producing additional economic activity and generating employment, foreign investment facilitates in flow of sophisticated technology.

Many countries that do have access to foreign direct investment are only given access in specific areas of business or of the country. Other countries, often those that needs it most, are overlooked by investors, missing out on this source of finance entirely. In Indonesia, eighty percent of foreign direct investment are confined to Java where the country’s capital is. Geographically focused approach of foreign direct investment prevents investors from capturing the full opportunity offered by developing countries. Resources need to be allocated to match the shifting distribution of each country’s growth. Understanding the priorities of central and local governments as well as determining how or where these align with business priorities is a tremendous challenge.

For a country to be involved in Foreign Direct Investment (FDI) means that their resources participate in another countries business. Both people and technology can have an involvement in being transferred between two countries for the process of FDI. This is established by an investor which can be anything from a government body, a company or even an individual. When looking deeper into FDI over recent years (from 1980 onwards) patterns begin to develop globally and the financial crises tend to have a huge impact on FDI inflows in both developed and developing economies.

In today’s world of investment, every country, every region, competes for foreign direct investment; however, they do so disproportionately - one thing is for sure: The more FDI, the better. FDI flows generally follow investor’s choices, interests, and perceptions. The need to earn more creates new opportunities for investors and nations alike. But

There is a long standing belief that foreign direct investment (FDI) inflows help the countries to have the opportunity to make further improvements on their economies. In recent decade, this belief strengthened by the fact that faster growing economies tend to attract more FDIs. Even if the direction of causality between FDI and growth is not absolute yet, positive impacts of FDI such as new technology, know-how or creating employment are enough attractive for policymakers. Consequently, investigating factors that pull FDI into country became a crucial topic in the literature.

There is a general consensus that federal direct investments are thought to bring a considerate amount of economic well-being for developing countries. It is intriguing to observe the true effects of Federal direct investments on developing countries. While FDI has become an outcome of a more globalized world, some countries do not see the same benefits of this phenomenon as other countries. One country that has seen a heavy influx of foreign direct investment is India. This paper briefly addresses both the positive effects of FDI on India and looks at the growth of GDP in India’s economy. It concludes that FDI has transformed India’s economy and will continue to transform it. From this research, it will give a deeper

The factors involved in process of economic growth of nations have transformed overtime, from savings to trade, foreign investment and human capital base of the country. With opening up of the economies and the formation of multiple agreements among the countries, trade and FDI have become the major medium of accord among the economies. There has been surge in FDI inflows ever since the countries adopted liberalisation policies across the globe. The countries have been looking for policies to attract more FDI by boosting investment climate in their countries, to finance their process of growth and development.

Foreign Direct Investment (FDI) is a major or key element in international economic integration. Foreign Direct Investment creates a stable, direct and long lasting connections between economies. It therefore encourages the transfer of technology know how between countries and allow the host country to promote its products more widely in international markets. It is also and additional source of funding for investments and it can also be an important form of development. Foreign Direct Investment is an investment in a business firm by an investor from another country in which the foreign investor has control or a significant degree of influence over the company or firm. The Organization of Economic Cooperation and Cooperation

After long consideration from our management team, we have decided to introduce a contingent set of initiatives corresponding to “Foreign Direct Investment” in Ethiopia. There has been a considerable rise of FDI opportunities recently within Ethiopia. The following document will discuss; cultural, political, as well as economic trends and patterns that influenced our outlook on FDI into Ethiopia. Moreover, this memo will analyze the potential risks and or barriers to entry, foreign firms could encounter when attempting FDI to Ethiopia. Lastly, our team will aim to outline a proposed plan relating to FDI in Ethiopia for our organizational business partners. There were many sources of information which influenced our “Foreign Direct Investment” conclusion for Ethiopia such as; research on cultural, political, and economic factors ongoing currently in Ethiopia. Additionally, our group is a combination of “Foreign Direct Investment” specialists including two Ethiopian counterparts residing within Ethiopia. Hence, a part of our investment plan includes first-hand direct insider Ethiopian research, conducted from Ethiopia. Accordingly, the strategies developed, by our management team, for FDI in Ethiopia have been formulated using high business acumen and business analytics pertaining to present Ethiopian economic conditions. Seemingly, one will see from these proposed FDI initiatives that Ethiopia is one of the most stable countries for

The inflow of Foreign Direct Investment to Indonesia is very dynamic featured with upward and downward trend interchangeably. Since 1981 FDI ratio to Indonesian GDP is relatively low range from 0 – 3% of Indonesian GDP. But the number of FDI could be regarded as the signal of Indonesian economic recovery and investor confidence of the country. Historically, Indonesian FDI rose significantly in second phase of Soeharto era from 1981 to 1996 but then drastically down as the effect of Asia Financial Crisis and internal political instability in 1996 to 2000. Indonesia’s start to regain investor confidence after the successful democratization process in 2000 and peaked the performance in 2014 at the presidency of Yudhoyono. But in

More than twothird of FDI is between TNC’s. Total revenues for the Global 500 TNCs in 2006 add up to $18.9 trillion, a third of the world 's GDP. 70,000 TNCs and their 6, 90, 000 foreign affiliates, contributing $19 trillion in sales, a third of world GDP, create major component of this FDI stock and worldwide FDI flows. GE (US), Vodafone (UK), and Ford (US) are the top three non-financial TNCs worldwide contributing maximum FDI flows. The global FDI in 2005 increased to $730 billion registering a growth of 18% over $648 billion of 2004. Of the total FDI flows, the developed world contributed $637 billion, out of which half is from only three countries-US, UK, and Luxemburg. In 2005 the net outflows from the developed world exceeded the inflows by $260 billion. For the US, the largest economy in the world with $ 12.5 trillion GDP, FDI outflow increased by 90% to $ 229 billion in 2005. The developing world FDI grew by 40% to $ 233 billion in 2004 mainly due to M&A activity and also due to green field FDI rising consecutively for the third year. Studies suggest that FDI flows by TNC’s have transformed international trade in the last two decades and created new giants and a new world order (Blonigen, 2005). For 2006-07, global FDI flows are expected to rise further if economic growth is consolidated and becomes widespread, corporate restructuring takes hold, profit growth persists and the pursuit of new markets continues (UNCTAD,

FDI stock of developing countries increased from $2349348 in 2004 by 17.3 percent in 2005, which constitutes 27.0 percent of gross domestic product (GDP) of these countries. Among the developing economies, China is the forerunner with a share of 21.6 percent of total FDI inflow to developing countries in 2005, which is 14.3 percent of GDP. An underdeveloped county like Bangladesh has also realized the importance of FDI, where stock of FDI inflow increased by 13.2 percent in 2005 from $ 3098 million in 2004, which was 5.7 percent of their GDP.