The United Nations has placed Nairobi as one of the top four major urban Foreign Direct Investment (FDI) destinations in Africa. This is together with Cairo, Lagos and Johannesburg.
“FDI hubs such as Johannesburg, Cairo, Lagos, and Nairobi are noteworthy players in global FDI markets (in terms of volume), with emergent FDI cities like Abidjan and Kigali also doing well (in terms of growth),” says the report.
The report notes that Africa has the second highest exponential growth of inward FDI among world regions and is clearly an emerging global FDI destination.
Central Africa lags behind the other regions in terms of FDI, although Kigali – situated in Eastern Africa, but bordering the central region – shows strong upward growth in attracting FDI.
This report singles out Western Europe as the largest investor in Africa, followed by Asia and then North America.
“Geographic proximity is an important locational preference for multinational firms in Africa, most likely because of cultural and language similarities, and because proximity lowers the transaction costs of foreign ventures,” says the report.
These African Cities are well suited to perform a quintessential role in the Continent’s evolving structural transformation since urban environments has proved to be a key facilitator of growth in critical economic sectors.
“As we know, Africa is urbanizing at an extraordinary rate – with tens of thousands moving to cities every day. Half of the continent is expected to be living in cities by 2030 bringing the familiar challenges – unplanned urbanization, informal settlements, poverty, inequality, unemployment humanitarian crises, conflict,” said UN-Habitat Deputy Executive Director Dr. Aisa Kirabo Kacyira, at the launch of this report.
As Nairobi and its environs accelerate its urban FDI momentum, fast growing local corporates are becoming an indispensable catalyst. Optiven Group’s CEO, Mr. George Wachiuri, who captains one of the leading real estate firms in the region knows it too well, that Africa’s economy needs both domestic investment as well as FDI in order to grow and diversify.
“We believe that substantial private capital injections into Africa will go a long way in closing Africa’s huge gap in physical infrastructure, improvement of the quality of the built environment, and help countries such as Kenya to achieve Vision 2030 much faster,” says Mr. Wachiuri, at the sidelines of a meeting with investors in Richmond, Virginia USA.
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