NAIROBI, May 22 (Xinhua) — Kenya’s improving infrastructure and a huge pool of young, skilled workers are attracting multinationals to invest in the East African nation.
At least 10 multinationals have entered Kenya in the last few months as the country solidifies its position as a regional commercial hub.
Volvo, Johnson and Johnson, Boeing, Peugeot, DOB Equity and Tianlong are some of the firms that have announced entrance into Kenya, by either setting up regional offices or started manufacturing plants.
Volvo Group is the latest entrant, announcing last week that it would invest 24 million U.S. dollars in an assembly plant in Mombasa in quarter one of 2018.
The plant shall be their third in Africa and 16th worldwide, with the others in Africa being in South Africa and Morocco.
In starting the plant, Volvo follows in the footsteps of Volkswagen, the German carmaker and Peugeot, the French car manufacturer, which opened plants in Kenya.
On the other hand, Tianlong, a Chinese gas cylinder manufacturer last week received the nod from Kenya Bureau of Standards to locally manufacture canisters for the East and West African market. The firm acquired land on the outskirts of Nairobi, with the office expected to be their African Hub.
In March, Johnson and Johnson, a public health goods maker, set up a regional office in Nairobi as it changed strategy from working with distributors. The Kenyan office is the third in Africa after one in Ghana and another in South Africa.
The setting up of the offices is a big boost to Kenyans as the organisations are creating job opportunities and raising the country’s profile as an investment hub as government strives to improve ease of doing business.
The Volvo plant, for instance, is expected to create approximately 300 direct jobs in addition to their opened recently Volvo Trucks regional office in Nairobi as the company expands footprint in the East African region market
Similarly, the Tianlong plant shall offer direct employment to 200 skilled locals in the next year, according to the firm.
Cytonn, a Nairobi-based investment firm cites improving infrastructure, especially the construction of the gauge railway, rising number of skilled workers and a young population as the biggest attractions.
“We expect to witness more multinationals having a presence in Nairobi as it continues to solidify its position as not just a regional but also a continental hub. This will in the long run boost economic development,” said Cytonn Monday.
Henry Wandera, an economics lecturer in Nairobi, noted that besides the improving infrastructure, growing incomes among citizens are also luring multinationals to the country.
“Companies setting up shop in Kenya see it as a gateway to East Africa but before their products reach other countries, they know they have a good market in Kenya. Vehicles like Volvo if manufactured in Kenya will easily find market in the country,” he said.
Kenya is currently in the process of setting up a one-stop shop for investment promotion to boost foreign direct investment from the current less than 2 percent to 10 percent of the gross domestic product.
In 2015, Kenya posted the fastest growth in foreign direct investment in Africa and the Middle East by receiving about 1.5 billion dollars.
Treasury Cabinet Secretary in his budget in March announced a number of tax incentives to attract foreign investment.