The rate of foreign investment in developing countries from multinational companies based in developed countries has been on the rise over the years. This is done for the purpose of making a profit as well as helping the host country to develop economically. Foreign investment is an undertaking that is relatively risky because different countries have different economic principles and as well as various political and cultural environments. Investing in other countries, therefore, requires a deep understanding of the foreign county’s affairs because they are bound to affect the business. This report is an analysis that aims at establishing how Kenya, in Africa, is favorable for investment. The report evaluates Kenya’s demographics, governance, economic environment, and the aspects of competition, stability, and civil society among other crucial factors.
According to the World Bank, Kenya had a population of 49,699,842 people by the end of the year 2017. The population is projected to have increased to about 52 million people by the end of the year 2019. However, the official census done by the country in 2009 established that 38,610,097 people lived in the country then ( World Bank, 2018) . The country has is relatively sparsely populated with an average density of 205 people per square mile. Kenya’s largest city is Nairobi with 6.54 million people including suburbs. Other cities in the country are Mombasa (1.2 million people), Kisumu (0. 4 million), Nakuru (0.3 million). Kenya demographics present a diverse spectrum of ethnic groups and races. The country has 42 tribes with 67% Bantus and 30% Nilotes and the remaining 3% representing the Cushites, Europeans, Asians, and Indians. A closer look at the country’s demographics shows that she comprises of 17% Kikuyu, 14% Luhya, 10% Kamba, 13% Kalenjin, and 11% Luo as the top five tribes in terms of population ( World Bank, 2018) .
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Kenya is considered to be East Africa’s hub for communication, transportation, and financial services. Her major industries include fishing and forestry, agriculture, energy, industrial manufacturing, tourism, financial services, and minerals and mining. The country’s Gross Domestic Product per capita has steadily been increasing from 1960 ( World Bank, 2018) . From 1960 to 2017, the lowest GDP per capita was 481.38 and the highest was $1169.34 in 2017. This has been growing at an average rate of 5.91%. The country’s GDP annual growth as of 2017 was 4.9. However, Kenya’s GDP per capita stood at 2.3 in 2017 as compared to 3.2 in 2016 and 3.0 in 2015. According to the United Nations Development Program, Kenya has a Human Development Index of 0.590 and she is ranked 142 globally ( World Bank, 2018) .
According to the freedom house, Kenya is a partly free country with a rating of 4/7. In addition, political rights freedom and civil liberties have 4/7 freedom world scores ( Freedomhouse, 2018) . Her political rights and civil liberties are undermined by security forces brutality and pervasive corruption. Although the country’s media and civil society are vibrant, they remain vulnerable to restrictive laws and also intimidation. Also, political freedom is undermined with violence and intimidation to her electoral body which is, in most cases, faulted for being unable to conduct free and fair elections ( Freedomhouse, 2018) . According to the World Bank, Kenya is a developing country that is in the category of lower middle-income countries that have a GNI between $1006 and $3995 ( Knoema, 2019) .
Kenya is a liberal democracy. However, although her constitution provides for full democracy, freedom and liberty are mostly limited by those that hold power. The country has a multiparty system. There is no specific philosopher or thinker who influenced Kenya’s political system. However, the country has experienced several reforms from the one-party state from the late 1960s to 1992 where the then President Moi allowed multiparty democracy after yielding to international pressure. Since the country was under British rule up to independence, it assumed much of the colonialist’s constitution statutes until her new constitution in 2010 ( Ittmann et. al, 2010) . The president is the head of both the government and state. The country has a bicameral parliament is exclusively vested with legislative powers while the judiciary is an independent arm. She also has the Senate. However, although the judiciary is said to be independent, it is in most cases accused of being interfered with by the executive.
The electoral system in Kenya is governed by her Independent Electoral Boundaries Commission (IEBC). Kenya holds elections every five years. According to the 2010 constitution, the elections are supposed to be held on the August of the electioneering year. In this election, the citizens elect the president, members of parliament, senators, governors, women representatives, and county government representatives ( Kratzsch, 2018) . An election in the country is done by secret ballot. The winning president should have the highest number of votes cast. This also applies to the other elective positions. The cabinet secretaries (ministers) are appointed by the president. The executive comprises of the president, the deputy president, and the cabinet secretaries. The ministers formulate and implement policies within their areas of jurisdiction according to the Kenyan Law ( Kratzsch, 2018) .
Kenya’s judiciary comprises of several courts tasked with different responsibilities. There are the subordinate courts such as the court-martial, kadhis courts, and magistrates’ courts. The superior courts include specialized courts for matters like environment, labor courts, high court, the court of appeal, and the Supreme Court. The country’s highest court is the Supreme Court ( Ittmann et. al, 2010) . The judiciary advocates for judicial review if an individual is not satisfied by a certain direction made by a government body. Moreover, despite her 2010 constitution which brought in devolution with 47 counties and the national government, Kenya is still considered to be a unitary state ( Ittmann et. al, 2010) . The national government administers its policies in areas that are not under the county governments. Some of the sectors that are not devolved include education, security, transport, and mining just to mention a few. The county governments are given the power to legislate within their county assemblies and come up with laws that address the people within their counties. There also exists town council governments that are tasked with managing towns but they are under the county governments.
Kenya has had two written constitutions from independence; one from independence in 1964 to 2010 and the current 2010 constitution ( Kratzsch, 2018) . The older constitution was however under several reviews during its usage. The current constitution is now 9 years old. The constitutional provisions aimed at some fundamental aspects like bridging the inequality gap by devolving the government and have a more inclusive form of governance. Although it has faced problems because it is still young, the constitution has made it possible to distribute resources more evenly with each year each county getting a share of hundreds of millions of dollars. Devolution has also enabled Kenya to get more financial support from other nations who support the counties. However, although the constitution was passed by the majority by 67% there are still pertinent issues that some groups feel that they should be addressed which linger about religion ( Ittmann et. al, 2010) . The county has a free economy whereby people are free to do business under the government’s regulations. The country owns a number of public companies such as electricity generating companies to help increase her revenue.
While Kenya has over 50 political parties, there are two major political parties. Jubilee is the party that is presently ruling while the Orange Democratic Movement (ODM) is the second largest party ( Sonnleitner, 2018) . However, sometimes the political fraternity witnesses political parties coalitions especially when approaching the electioneering time. In fact, the Jubilee party is a coalition came as a result of breaking other many parties so as to form a major party purposely for the 2017 elections. As a result, it became the strongest party which made it win the 2017 general elections with majority elected representatives in the national assembly. In recent years, Kenya has been experiencing political tensions during her general election ( Sonnleitner, 2018) .
The 2007 elections were marked with violence which saw many people killed and others internally displaced. The violence occurred mainly in Nakuru which is inhabited more by the Kikuyus and the Kalenjins. It is this violence that saw the incumbent president Uhuru Kenyatta and his deputy William Ruto summoned by the ICC as some of the masterminds ( Ittmann et. al, 2010) . They were however found to be innocent. The 2017 general election was also having political tensions. Violence was witnessed in a few areas and about 100 people were reportedly killed and several hundred injured. In this country, voting is not mandatory. The 2017 elections witnessed 79.51% voter turnout. In 2013 the turnout was 85.75% and 69.09% in 2007. Kenya’s next general elections will be held in 2022. The political temperatures are now low after the president started a “building bridges” initiative with the opposition chief Raila Odinga ( Ittmann et. al, 2010) .
The economic environment for foreign investments in Kenya has steadily been improving. The country has been witnessing an increase in the foreign direct investments both in inflows and outflows. Research shows that multinational companies in Kenya are treated almost the same as local industries. There is no discrimination to foreign industries. This fosters a healthy environment for investors who are seeking to establish a presence in the country. According to a UNCTAD report, Kenya’s FDI performance has been on an increasing trend reaching $133 million in 2010 ( UNCTAD, 2017) . In addition, the country is successfully diversifying her FDI with notable flows from China, Middle East, India, and South Africa. The country is also becoming an outward investor especially in the finance, tourism, retail, media, and manufacturing sectors. The government has put in place certain measure to improve on her FDI. These policies include the Investment Promotion Act of 2004. This Act comprises of the methods to encourage FDI through planning to attract more investors, addressing FDI challenges, and creating institutions that help in attracting FDI ( UNCTAD, 2017) .
The institutions tasked with improving on FDI are the ministry of finance, Export Processing Zones Authority, and the Kenya Investment Authority (KenInvest). The KenInvest provides information to investors and has become the best tool to attract foreign investors ( UNCTAD, 2017) . The government also passed a law on public-private partnerships so as to encourage foreign investment. In the mining sector, the country’s mining law has limited foreign access to minerals, oil, and gas ( Sonnleitner, 2018) . In addition, the government has laid down a policy that reduces the time required to register a company in the national government and also in the county governments. The benefits of FDI are evident. Foreign investors have contributed to the country’s economic growth. It has led to more jobs creation. Other benefits are higher tax revenue, transfer of technology, regional markets access and greater competitiveness ( Kratzsch, 2018) . However, various challenges remain obstacles to foreign direct investment in this country. These obstacles include; increased corruption, high levels of unemployment, a slow judicial system, poverty, costly skilled labor, and ethnic tensions. In addition, recently Kenya has witnessed terrorist attacks. Again, the uncertainty of foreign companies constitution and difficulties in getting work permits poses a challenge to FDI growth ( Idea International, 2018) . Moreover, foreigners are allowed to lease land for utmost 99 years but not to buy.
Kenya, being a country within the equator has one of the stable climates although she has arid and semi-arid areas. The country has fewer carbon emissions hence provides a less polluted environment. Politically, the country is currently stable. However, there have been many cases of human rights abuses. The country’s security personnel are in most cases associated with human rights abuses involving the use of brutal force. Also, reportedly, people disappear while in the hands of the police ( Heilbrunn, 2016) . This signifies extrajudicial killings. Kenya is not is any conflict with her neighbors. Her only main challenge from her neighbors is the unstable Somalia government which hosts the Islamic extremism group; Alshabab. The country is in good diplomatic relations with her neighbors, Tanzania, South Sudan, Ethiopia, and Uganda. Moreover, there exist good relations between the country and major global powers such as the USA, China, Europe, Japan, et cetera. In 2017, the US achieved an FDI of $ 405 million into Kenya ( UNCTAD, 2017) . This was lower compared to the previous year’ FDI. China is the major foreign investor into Kenya in the infrastructural sector with the building of the standard gauge railway. In addition, China is the country’s largest lender by more than 50% on Kenya’s debt ( Zhang, 2019) . The country’s diplomatic relations can be seen to good by the bilateral trade visits of the government leaders such as when the Kenyan president visited President Trump in 2018. England’s Teresa May also visited Kenya the same year before Uhuru Kenyatta Visited the Chinese President ( Sonnleitner, 2018) .
In conclusion, Kenya is a country that is worth investing in despite her challenges. As a developing country, Kenya has signed investment treaties with other countries such as Rwanda, United Kingdom, Libya, Netherlands, German, France, China, Italy, Switzerland, and Finland among others ( UNCTAD, 2017) . The US is the largest import market for Kenya while the United Kingdom in the largest export market. Such bilateral associations are an indication of the country’s potential to grow in the near future. The country also hosts a good number of international companies from diverse countries. Notably, she has tried to control the challenges facing her as a developing country. For instance, in 2011, the country started a mission to secure her borders especially due to the problem of the Alshabab ( Heilbrunn, 2016) . Since then, there have been significant changes in her state of security. Therefore, she is a country that is worth investing in.
References
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Ittmann, K., Cordell, D. D., & Maddox, G. H. (2010). The Demographics of Empire: The Colonial Order and the Creation of Knowledge . Athens, OH: Ohio University Press.
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