Report Shows Sharp Decline in Chinese Investment in Kenya, India Now Leads Foreign Investments

A recent report by Kenya’s National Bureau of Statistics reveals a significant decline in direct investment from China. According to the report, Beijing’s investments in Kenya have dropped by more than a third over the past three years. Analysts attribute this shift to China’s growing focus on exporting products rather than investing abroad.

Jimmy Yimming, a Chinese manufacturer specializing in human hair products, is among those exploring opportunities in Kenya. Yimming, who recently showcased his wigs at a Nairobi mall, expressed optimism about the Kenyan market. “I think the Kenyan market is very good,” he said. “I’m looking forward to staying here for a long time in the future, and I hope I can have a chance of that.”

China has been a major investor in Kenya and other African nations, largely through its Belt and Road Initiative. As a result, Beijing has become Kenya’s top source of imports, a position it continues to hold.

However, Kenyan data indicate that between 2020 and 2022, Chinese investments in Kenya’s construction sector—a key area of Chinese foreign investment—declined by over 34%. In contrast, U.S. investments in Kenya increased slightly during the same period, rising from 7.1% to 7.4%.

Research analyst Churchill Ogutu notes that the U.S. is focusing on Kenya’s critical sectors, including health, ICT (information and communications technology), and pharmaceuticals. “Broadly, we are looking at a number of sectors that are usually the beneficiaries,” Ogutu said. “Health, ICT, and pharmaceuticals are the main beneficiaries of foreign direct investments into Kenya, and this is where America stands out.”

A State Department report from last year highlighted Kenya’s favorable business climate, which has made it attractive to international firms seeking regional or pan-African operations. American companies continue to demonstrate strong interest in expanding their presence in the country.

The National Bureau of Statistics report also shows a shift in the leading sources of foreign investment in Kenya, with India now surpassing China, followed by Japan.