Foreign direct investment (FDI) into Kenya has more than doubled in the past three years, cementing the country's position as one of Africa's most attractive destinations for international capital despite a challenging global investment environment.
The latest report by the United Nations Conference on Trade and Development (UNCTAD) shows FDI inflows into Kenya climbed to $3.2 billion (about Sh413 billion) in 2025, up from $2.3 billion (about Sh297 billion) in 2024 and $1.5 billion (about Sh194 billion) in 2022.
The sharp rise comes as global FDI remained subdued amid geopolitical tensions, elevated borrowing costs and slowing economic growth in many regions, underscoring Kenya's growing appeal to international investors.
According to the report, the total stock of foreign investment in Kenya has now surpassed $12 billion (about Sh1.55 trillion), reflecting sustained capital accumulation across key sectors of the economy.
President William Ruto has described the latest figures as a strong endorsement of the country's economic direction, saying investors are responding positively to ongoing reforms aimed at making Kenya more competitive.
"This positive economic outlook is anchored by a stable shilling, a rallying stock market and bold reforms, including our privatisation agenda, that is opening new doors for private capital," the President said.
The recovery of the Kenyan shilling has emerged as one of the strongest confidence boosters for foreign investors.
After experiencing significant volatility in 2023, the currency has remained
relatively stable against major international currencies, reducing exchange
rate risks that often discourage long-term foreign investments.
Currency stability has also helped tame imported inflation and improve the predictability of investment returns, making Kenya increasingly attractive for multinational companies planning long-term projects.
The impressive performance of the
Nairobi Securities Exchange has further reinforced investor confidence.
The bourse has been among the best-performing frontier markets this year, with record highs in market capitalisation and several equity indices reflecting renewed optimism over corporate earnings and Kenya's broader economic prospects.
A stronger capital market provides foreign investors with deeper financing options and clearer exit opportunities through public listings, mergers and acquisitions.
The government's privatisation drive has also become a major attraction for international investors.
Plans to dispose of stakes in selected State-owned enterprises are expected to unlock new investment opportunities while improving efficiency and reducing pressure on public finances.
Combined with regulatory reforms aimed at improving the ease of doing business, digitising government services and enhancing public-private partnerships, the initiatives have strengthened Kenya's competitiveness in attracting global capital.
The UN body says much of the new
investment is flowing into sectors aligned with Kenya's long-term economic
transformation agenda.
Clean energy continues to dominate investor interest, with Kenya's abundant geothermal resources positioning the country as Africa's leading producer of geothermal electricity.
Continued investment in renewable energy projects is supporting the country's transition to green growth while meeting rising electricity demand from industries and households.
Digital infrastructure has also
attracted substantial foreign capital as investors expand fibre-optic networks,
data centres, cloud computing facilities and digital connectivity
infrastructure to serve Kenya's rapidly growing technology ecosystem.
Financial services remain another major destination for international investment.
Kenya's sophisticated banking sector, thriving mobile money ecosystem and expanding fintech industry continue to attract global financial institutions seeking exposure to one of Africa's most innovative financial markets.
Manufacturing is also drawing increased foreign investment as companies establish regional production hubs targeting both the domestic market and exports under regional trade agreements such as the African Continental Free Trade Area.
The growing investor appetite
reinforces Kenya's role as a regional gateway for multinational companies
serving East and Central Africa.
However, economists note that sustaining the momentum will depend on maintaining macroeconomic stability, ensuring policy consistency, lowering the cost of doing business and accelerating infrastructure development.
Kenya appears well-positioned to attract even larger capital inflows as global investors increasingly seek resilient markets offering strong growth prospects and political stability.
