More foreign investors to leave Kenya in 2024; POB report
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Parliamentary Budget Office (PBO) for 2024/2025 reveals that more foreign investors will continue to leave Kenya
Parliamentary Budget Office (PBO) for 2024/2025 reveals that more foreign investors will continue to leave Kenya.
According to the February report, Kenya might lose more investors as a result of the Nairobi Securities Exchange’s (NSE) declining profitability.
This comes after in 2023, the NSE experienced a decline of 27.5 percent, also over 6,000 foreign investors left the NSE in nine months.
“The erosion of investor confidence and reduced capital formation stemming from the struggling stock market collectively contribute to a challenging economic landscape for businesses across sectors,” read part of the report.
Some investors have moved to developed economies in search of higher profits, which has resulted in this fall.
In addition, rising interest rates in Kenya and other emerging nations are another factor contributing to the drop in international investment.
The Central Bank of Kenya raised interest rates from 7% to 12.5%, which will also have an impact on investor choices.
The examination of tax policies and a decrease in revenue collection are further factors. Investor confidence in the nation and consumer behavior are impacted by these policies.
Cumulatively, these factors influence the business environment which results in long-term economic stability and growth projections.
According to the report, another reason is Kenya’s debt and the surging borrowing costs which makes long-term bonds more expensive. This has discouraged foreign investors.
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“In the current global macroeconomic environment, the decline in international appetite for Kenyan government bonds is pronounced, with investors now demanding a premium to offset the perceived risks,” read part of the report.
In the report, Kenya was urged to adopt more measures to regain investor confidence which will subsequently boost the economic growth of the country.
Meanwhile, in another report, Quarterly Economic and Budgetary Review Report, from the National Treasury it was revealed that foreign investors were moving from Kenya to the US and other nations.
This decline was attributed to global monetary policy tightening forcing investors to look for other safer areas.
In 2023, the Henley Private Wealth Migration Report 2023, 100 millionaires were reported to have left the Kenyan market in 2022 due to increased taxation.
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