Egyptian pyramids. Photo/courtesy.
In the last few years Egypt has attracted a lion share of Foreign Direct Investments (FDI), putting the North African nation as Africa first destination for direct investment according to UN Trade and Investments (UNCTAD).
In 2023 alone, Egypt attracted 9.8 billion US dollar in FDI which is equivalent to 18 per cent of the total FDI channeled to the continent.
However, the success of Egypt didn’t come without tangible work by government. According to UN report, the second largest economy in Africa installed policies that pulled FDI to the Saharan nation.
Streamlined approval system
Single Approval System for investment projects is one of the policies put in place. This policy ensured that foreign investors can easily invest without having to endure bottlenecks thus reducing the time taken to ink deals. This meant investors can acquire licence and permits to launch ventures with ease.
Another landmark policy is the installment of investment promotion council lead by President Abdel Fattah El-Sisi. This council, known as Egyptian General Authority for Investment and Free Zones (GAFI) is tasked to develop investment promotion services and creation of favourable business environment. It plays a crucial role in convincing investors to land in Egypt.
Introduction of investment tax credit and other fiscal incentives on promotion of green hydrogen is another policy acting as a magnet to investors. Additionally, Egypt has had a stable political environment which enhances investor’s confidence.
Compared to Egypt, ease of doing business in Kenya remains low even for start-ups in the country. Having to visit several state agencies to acquire permits and licence which is often time consuming is a recipe for low FDI in Kenya.
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Political instability and rampant corruption is also to blame for Kenya’s failure to attract substantial foreign investment. With the ongoing Gen Z protests which has resulted in destruction of businesses and disruptions, investors are likely to shy away from channeling money to Kenya.
However, all is not lost, Kenya is facing a policy problem, therefore the government through the Ministry of Investment and Trade must benchmark countries like Egypt and install policies that favors foreign investments.
It’s imperative to point out that Kenya has vibrant economy with huge potential if it’s furnished with good policies and government stepping up the fight against corruption as a matter of urgency, failure to which investors will find Kenya unsuitable investment destination.
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