Formation (GFCF) Tanzania 640 953 1813 1229 1706 FDI as % 15.3 - 24.6 15.6 17 Tanzania’s of GFCF Source: UNCTAD (2013). Table : FDI stock in Kenya and Tanzania (selected years, in US$ million) Item 1995 2009 2010 2011 2012 Kenya 732 2104 2282 2617 2876 FDI stock as % of 6.3 - 7.1 7.7 7.0 Kenya’s GDP Tanzania 620 8066 8762 9278 10984 FDI stock as % of 10.2 - 37.1 38.1 38.2 Tanzania’s GDP Source: UNCTAD (2013). UNCTAD (2005) had argued that The UNCTAD (2011) figures show that Kenya’s inability to attract FDI is a result of Uganda and Tanzania have overtaken corruption, poor governance, Kenya in terms of growth rates due to their inconsistencies in economic policies and rising FDI inflows , but Kenya is still the structural reforms, deteriorating public regional business leader ,is it that FDI is a service and poor infrastructure all of which key factor in driving economic growth or are being addressed. Despite massive are other factors equally important ?. efforts by the government to implement Some of these shortcomings have been reforms such as trade reforms, the country recognized by the government and it has continues to loose its competitiveness for sought to amend the Investment Promotion FDI to Uganda and Tanzania. However, Act by making investment certificates Sims (2013) indicates that inflows of FDI optional for all investors .The special to Kenya could match those of Tanzania incentives remain conditional upon and Uganda beginning 2014 aided by holding a certificate, though the minimum opportunities created by the discovery of capital requirement to qualify for one oil deposits in Turkana. The FDI inflows would be lowered to US$ 100,000 for are projected to average US $ 1.3 billion foreign investors and US $ 13,000 for annually for the period 2013-2018 , national investors. placing it at par with Tanzania and Uganda From the year 2000, the Kenya who had over the years attracted more government has implemented a number of investors due to their vast natural initiatives to improve both economic resources such as gas , oil and other performance and stimulate foreign direct minerals. investments. The government joined the Free Trade Area of the Common Market
Formation (GFCF) Tanzania 640 953 1813 1229 1706 Tanzania’s FDI as % of GFCF 15.3 - 24.6 15.6 17 Source: UNCTAD (2013). Table : FDI stock in Kenya and Tanzania (selected years, in US$ million) Item 1995 2009 2010 2011 2012 Kenya 732 2104 2282 2617 2876 Kenya’s FDI stock as % of GDP 6.3 - 7.1 7.7 7.0 Tanzania 620 8066 8762 9278 10984 Tanzania’s FDI stock as % of GDP 10.2 - 37.1 38.1 38.2 Source: UNCTAD (2013). UNCTAD (2005) had argued that Kenya’s inability to attract FDI is a result of corruption, poor governance, inconsistencies in economic policies and structural reforms, deteriorating public service and poor infrastructure all of which are being addressed. Despite massive efforts by the government to implement reforms such as trade reforms, the country continues to loose its competitiveness for FDI to Uganda and Tanzania. However, Sims (2013) indicates that inflows of FDI to Kenya could match those of Tanzania and Uganda beginning 2014 aided by opportunities created by the discovery of oil deposits in Turkana. The FDI inflows are projected to average US $ 1.3 billion annually for the period 2013-2018 , placing it at par with Tanzania and Uganda who had over the years attracted more investors due to their vast natural resources such as gas , oil and other minerals. The UNCTAD (2011) figures show that Uganda and Tanzania have overtaken Kenya in terms of growth rates due to their rising FDI inflows , but Kenya is still the regional business leader ,is it that FDI is a key factor in driving economic growth or are other factors equally important ?. Some of these shortcomings have been recognized by the government and it has sought to amend the Investment Promotion Act by making investment certificates optional for all investors .The special incentives remain conditional upon holding a certificate, though the minimum capital requirement to qualify for one would be lowered to US$ 100,000 for foreign investors and US $ 13,000 for national investors. From the year 2000, the Kenya government has implemented a number of initiatives to improve both economic performance and stimulate foreign direct investments. The government joined the Free Trade Area of the Common Market
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