Published On: Wed, Nov 21st, 2012

Foreign investors slash jobs in Kenya by more than 60pc

Rioters engage police in running battles along Juja road on November 19, 2012. PHOTO / JENNIFER MUIRURI (Business Daily)

The number of jobs created by foreign companies dropped 60.4 per cent in the nine months to September on reduced foreign direct investments in the country.

Data from the Kenya Investment Authority (KenInvest) show that jobs created by foreign direct investments (FDI) stood at 3,957 employees in the review period compared to 10,017 the year before.

This came as the value of FDI fell to Sh51.2 billion from Sh102.7 last year in what has been linked to a weak global economy and heightened political risks in Kenya ahead of the March 2013 General Elections.

The major slowdown in new jobs growth is a blow to the labour market, which last year saw the private sector slow down hiring to preserve cash and boost profits on uncertain economic outlook and a higher political risk profile.

New private sector jobs stood at 47,000 last year compared to 56,000 in 2010, mainly driven by a sharp decline in the agricultural sector that accounts for the bulk of economic activity.

“Kenya still remains a strong investment destination and FDI is likely to rebound after the elections,” said Mr Sammy Onyango, the chief executive of Deloitte East Africa.

FDI in the manufacturing sector dropped to Sh6 billion in the period to September from Sh18.4 billion in similar period last year, creating 2,456 new jobs compared to 2,907 jobs.

Foreign investments targeted at the construction sector dropped from Sh50 billion to Sh1.1 billion, a drop that saw new jobs in the sector shrink to 58 from 1,386.

A surge in global commodity prices, investor appetite for new frontier markets and oil finds in Kenya have increased investor’s appetite in Kenya’s natural resources and this interest is set to shape future FDI flows.

A recent report by the United Nations Conference on Trade and Development (UNCTAD) says FDI has slowed down on a global level, attributing the trend to cash-preservation strategies by multinationals in the wake of uncertainties in the world economy.

The trade organisation says global FDI stood at $1.5 trillion last year and expects it to grow marginally to $1.6 trillion this year — 23 per cent lower than the pre-crisis FDI levels.

“Despite record cash holdings, transnational corporations have yet to convert available cash into new and sustained FDI, and are unlikely to do so while instability remains in international financial markets,” UNCTAD said.

Kenya’s rising risk profile has also been worsened by increased terror attacks. Rating agencies used by Lloyds of London have raised Kenya’s risk rating to 4.5, just 0.5 points shy of the maximum rating of five, giving the country a high political risk perception similar to that accorded to war-torn nations like Somalia.

By Victor Juma

vjuma@ke.nationmedia.com

- Business Daily

  • Irir Samaale

    Why are people surprised about what happened in Eastleigh it was literally a time bomb waiting to explode
    between the Bantus and the Somalis and i don't mean the terrorist attack.

    The Bantus are a bunch of lazy human beings you go to any continent on this planet and you will realize that i'm telling the truth and not just being racist. These Kenyans don't know how to do business so just like in South-Africa seeing a Somali whether they be indigenous or refugees do the opposite makes them sick to their stomach. Their GDP by the way is only $33.62 billion and their per Capita is only 2/3rd bigger than Somalia a country where there were no government for the last 20 years.

    I say to all my Somalis reading this in Kenya first of all what you have seen in these few last days is nothing compared to whats about to happen in the coming elections so make sure you're prepared or be in serious grave danger.

    Or say enough's enough its time for us to pack up our bags and sell Eastleigh and relocate to if you don't want it to be Somalia (which i kind of understand Somalia being in this circumstance) the North East Province of Kenya where at least you'll be the majority instead of being in the middle of your majority enemy.

    Last but not least do i have to remind people that when it comes to small enterprises (the beating heart of every other country's economy) the Horners particularly the Somalis have over taken the Asians even to an extant of some of them having to leave the country. The Kenyans greatest weapon against the Somalis in return is knowing they will never altogether leave the country because of NFD so see it not as an grave danger to abuse them.

    • jaarso

      how can you claim bantus are animalis when you are a moory@n half bantu

      • Irir Samaale

        Mr dyslexic i suggest you read again

  • Buuxiye

    I see Hotel RWANDA on the Horizon for Isli, Garisa, Madeera, Nairobi …
    http://en.wikipedia.org/wiki/Wagalla_massacre

    Wagalla massacre will be like a stroll in the park…

    With Kenyan troops in Jubba the Somalis are sandwiched between Jubba and those from NFD.

  • Somali King

    The Kenyans (the Hutus and Tutsi) are mindless raccoons who rampage no matter what!

    Their state because of multi ethnicity is vulnerable. The army and their civilians are not different from each other: rampage is the name of the game. Look what the army did in Gaarisa (the Somali town). They will never be forgiven for their crime against the Somali-Kenyans.

    As soon as Mogadishu settles down and Hargeisa gains independence, Nairobi would be a ghost town.

    Just like few years ago, when the Hutus and Tustsi of Kenya were slaughtering each other, it took the whole world to calm down. In the upcoming election they will be left with their own devices.

  • walahu

    Kenyas can never stomach kebab! Thats just the way it is. KDF rocks with shock and ewe,Kismayoo anno 2012 is a living truth testimony. If Kenya was to repatriate all somali fugees, a human catastrophy of biblical proportion will occur in this backwater state.

    • cimraan

      I would love for kenya to do that. plse do it. You think that is a bad thing. Then, you're not thinking straight. I for one will love for my people to be back home and leave that hell hole behind them. And if you think they might die of hunger then think again. I'm sure you will find that camp one day empty and be surprised. Another thing I would like to repatriate all the investment Somalis have in Kenya back to Somalia. Just don't come after it seeking employment.

  • cimraan

    I got only few things to say to our neighbors the Kenyans. Somalis might be venerable today and might easily overpowered, killed and abused. It might seem that you can capture their land easily and without much resistance. Please remember this, you are fighting with a small percentage of Somalis with the help of all other Somalis. So, don't think Somalia is a cake wake for you. Don't think that you can loot, kill, destroy and takeover our land be it in Kenya or in proper Somalia. That will be a mistake. What happened in Garcia is an acceptable and pain full to any Somali. I have no animosity for my Kenyan neighbors but what is happening today is not acceptable. A large number of Somalis are citizens of Kenya and as such have rights that should be accorded to them just like any other citizens.
    Please remember that just what happened in Somalia might happen in Kenya and where you might seek help you may ask? No one has guarantees in this life. So, let us remember the good thoughts about Kenya who bore the most when it comes to Somali troubles. Don't squander the good will we have for that country which we regard as second country. The horn need peace not demolition derby.

  • jaarso

    what is happening in kenya is to blame for those half -bantu somalis who want to blow up people and for those people not to react

  • Waddaniyad

    Waddaniyad,

    I believe these FUFU's should have been left to the mercy of the Asians, Somalis should not have felt sorry for them, and treated them like humans.

    It is unbelievable, what they did in Gaarisa, I say pull the carpet from under their feets, and turn Nairobi into a Gost Town. Then the Asians and their racist abuse, will come back. No more kind gesters from Somalis! Somalis should move to Gaarisa, Wajer and rebuild their NEP, and fight to keep it, and leave the Washaysis to the Asians..

  • Irir Samaale

    This is were your needed not the Jubba you OG refugee cowards no wonder your the Kurds of Africa because when things gets tough you run.

    It is said that one of the main reason Somaligalbeed being in Ethiopia's hands today is again because of of the OG when Mohammed Abdullah Hassan (the Mad Mullahs) family sided with the Habashis

More in Business (65 of 272 articles)
Horn Petroleum Corporation HRN