Figure of the week: New US investments in Kenya
By Victoria Elikana
This week, Kenyan President Uhuru Kenyatta witnessed the signing of two investment deals between the Overseas Private Investment Corporation (OPIC)—the U.S. agency in charge of development finance—and two companies in Kenya, amounting to a total of nearly $238 million in financing for Kenya.
The first deal, signed between the OPIC and the Kipeto Wind Energy Company in support of the U.S.’s Power Africa Initiative, unlocked $232 million in financing for a 100-megawatt wind power plant south of Nairobi. The second agreement was signed between OPIC and Twiga Foods and covered $5 million in financing to expand Twiga Foods’ distribution network. President Kenyatta applauded the commitment by Twiga Foods in Kenya’s agricultural sector, highlighting the need to improve food security and increase agricultural wages in Kenya.
As seen in Figure 1, the U.S. has been a longstanding partner with Kenya in terms of foreign direct investment, increasing its FDI stock in the country from $73 million in 2002 to $259 million in 2012 (and reaching almost $400 million 2011), according to United Nations Conference on Trade and Development (UNCTAD) data.
Food security is one of four key pillars that fall under the government’s “Big Four” economic agenda, alongside job creation in the manufacturing sector, affordable housing, and universal access to health care. President Kenyatta further emphasized his administration’s objective to improve the conditions for doing business to enable private-sector development. Kenya has made considerable progress in improving the country’s business environment, as indicated by the jump from 136th to 80th place in the World Bank’s Ease of Doing Business rankings between 2014 and 2018. Notably, Kenya’s economy has maintained high growth averaging 5.5 percent over the past five years, despite the political uncertainty surrounding the past year’s elections, as well as drought conditions that affected productivity in agriculture among other sectors.