Kenya’s attraction as an investment destination suffered in the three months to March this year losing $67 million (Sh9.5 billion) in foreign direct investments into the country.

However, Kenya's decrease in foreign investments contrasts with the situation in other East African countries, where average FDI inflows increased by 35 percent in three years to reach a total of $8.2 billion.

Anti-government protest, a weak shilling and liquidity challenges of accessing the dollar saw the country record $660 million (Sh93.8 billion) in foreign capital injection.

This is a drop from the $727 billion (Sh103.3 billion) posted in a similar period in 2022.

The decline was characterised by persistent investor flights in the review period that also saw Nairobi Securities Exchange (NSE) lose Sh240 billion in paper wealth in the first three months of the year as the shilling slid against major international currencies.

 “Net capital account inflows were $110 million in the first quarter of 2023. Net financial account inflows were lower at $660 million in the first quarter of 2023, compared to net inflows of $727 million in the first quarter of 2022,"CBK said in its latest quarterly economic review.

This, the banking regulator said largely reflects a decrease in portfolio investment inflows.

Kenyas Foreign Direct Investment (FDI) have been on a downward trend since 2019 according to UNCTAD's Investment Report 2022.

In 2019, the country received $1.1 billion (Sh156 billion) in FDI, which dropped to $717 million (Sh102 billion) in 2020 and further decreased to $448 million (Sh63.7 billion) in 2021.

Despite a renewed push to spur Kenya’s FDIs the decline trend has been persistent with the number of greenfield investments in the country also recording a significant reduction of almost 60 percent over the same three-year period, going from 95 projects in 2019 to only 39 in 2022.

A green field investment is where a company establishes operations in a different country by making provisions for the independence of the subsidiary company through new facilities.

Last week's rating by Fitch that downgraded Kenya’s credit rating to negative on deteriorating macro-economic conditions, external-financing constraints, drop in gross international reserves and fast depreciating shilling has further worsened the situation.

However, the government through Kenya Development Corporation is targeting to reverse the trend and attract key investment partners to fast track lending to crucial economic sectors in a bid to spur growth and create more employment.

Speaking during a high-level meeting with local and international development partners, Investments, Trade and Industry CS Moses Kuria said Kenya Development Corporation needs to leverage its enterprise value as a development finance institution to attract Foreign Direct Investment (FDI).

“This will boost the government’s dedication to collaboration and synergy in pursuit of Kenya's development objectives,” Kuria said during the meeting in Mombasa.

The meeting brought together key stakeholders to explore opportunities for partnership in establishing credit lines that will facilitate onward lending to the manufacturing, agribusiness and health sectors.