Recent unrest in Kenya, triggered by protests and political instability, has prompted several global firms to reassess their investment plans in the country. Despite President Ruto’s announcement to withdraw the Finance Bill 2024, concerns persist among foreign investors regarding ongoing uncertainties.
The decision by some firms to delay further investments is influenced by various factors, including widespread protests on June 25, 2024, largely led by youth. These protests followed the controversial passage of the Finance Bill 2024 by the National Assembly. Reports of casualties among protesters and high-profile kidnappings have heightened international scrutiny and raised concerns about stability.
Declan Galvin, Managing Director of Nairobi-based Exigent Risk Advisory, emphasized the delicate balance investors face. “Kenya remains attractive due to its skilled youth workforce and robust digital infrastructure. However, recent events, particularly government responses, have increased perceptions of country risk,” Galvin noted.
Similarly, an executive from an American multinational in the tech industry, speaking anonymously, expressed caution. “Kenya is pivotal for our African operations, but current unrest necessitates a ‘Wait and See’ approach,” the executive stated.
International responses have also been notable, with US Secretary of State Antony Blinken acknowledging President Ruto’s efforts to de-escalate tensions. Meanwhile, the deployment of Kenya Defense Forces, authorized by parliament, has prompted legal challenges, highlighting the complex legal environment affecting domestic and foreign stakeholders.
The impact extends beyond investment decisions to the conference circuit, where major events like the Financial Inclusion Conference and Investor Exposition 2024 have been postponed. This delay not only disrupts business interactions but also diminishes Kenya’s profile as a regional business hub.
As global firms recalibrate their strategies amidst evolving developments, the future course of foreign investments in Kenya hinges on resolving current uncertainties. With stakeholders across sectors closely monitoring the situation, the coming days are critical for Kenya’s position in the global investment landscape.
Photo source: Google
By: Montel Kamau
Serrari Financial Analyst
28th June, 2024
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