South Africa is Kenya’s second largest foreign investor after overtaking Uncle Sam (US).
In 2017, South Africa overtook the United States to become Kenya’s second-largest foreign investor after a number of South African firms inked a raft of multibillion-shilling deals targeting Nairobi.
The value of investments owned by South African firms in Kenya increased by 60 percent or Sh64.34 billion during the review year to nearly Sh171.65 billion, data from Kenya National Bureau of Statistics (KNBS) shows.
“Finance and insurance, manufacturing, information and communication; and transportation and storage industries were the main beneficiaries of investment,” the KNBS said in Foreign Investment Survey 2018.
South Africa consequently accounted for 12.4 percent of foreign investment in Kenya behind UK’s 15.8 percent.
The United Kingdom remained Nairobi’s largest source of foreign investment with a Sh217.84 billion portfolio despite registering a Sh3.44 billion drop from 2016’s value, the statistics show.
US firms in Kenya accounted for 11.6 percent of foreign investment and subsequently took the third spot with a Sh159.92 billion portfolio.
France and Mauritius represented 5.8 percent and 4.9 percent of foreign investment to Kenya respectively. Overall, the stock of investment portfolio by non-residents rose 4.9 percent to hit Sh1.38 trillion in 2017 compared to a year earlier.
An economic crisis in South Africa in 2017, which saw its domestic credit rating downgraded to junk — a non-investment grade territory, prompted firms in the country regarded to look elsewhere for opportunities and spread out the risks.
In April 2017, Distell Group took control of Kenya Wine Agencies Limited after buying additional 26.43 percent stake from Centum Investments PLC, increasing its shareholding in the winemaker and marketer to 52.43 per cent.
The deal was preceded by Johannesburg Stock Exchange-listed financial services group, Sanlam, which in March 2017 acquired a majority stake in PineBridge Investments East Africa, Kenya’s largest fund manager by market share.
The icing on the cake was, however, the mega-deal by UK giant Vodafone which in May 2017 agreed to transfer its 35 percent stake in Safaricom to South Africa’s Vodacom.
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