Kenya has been listed as one of the countries that has been attracting more foreign investors in the last few months despite the push and pull stemming from the Finance Bill, 2024.
On Tuesday, June 11, the Financial Times listed Kenya among the countries which have made a turnaround recently which the British publication attributed to higher interest rates and a stabilising economy.
According to the publication, the above factors have prompted more foreign investors to consider investing in local currency bonds such as those issued by the Central Bank of Kenya (CBK).
The bonds are gaining popularity due to Kenya's move to liberalise currency markets and increase interest rates. This action is aimed at improving Kenya's economy.
The two factors have made Kenya more attractive with some investors earning more by choosing different investment avenues in the country.
According to some of the investors who spoke to the publication, choosing Kenya and other frontier markets has become a more appealing proposition for investors and has been earning them healthy returns compared to other countries such as the US.
"A mixture of currency devaluations, interest rate rises, policy reforms and bailout loans help reassure investors," another investor who spoke to the Financial Times remarked.
Besides Kenya, other countries that have recorded positive growth and are attracting more investors include Nigeria, Egypt and Pakistan.
Recently CBK through Governor Kamau Thugge announced that the the bench lending rate would be retained at 13 per cent.
Thugge further revealed that the set rate was to help steady the inflation rates and stabilise the Kenyan Shilling. The rate was increased from February's 12.50 per cent.
The government has also explored raising billions through Treasury bonds. In May, CBK announced that it was seeking to raise Ksh15 billion from investors.
This was after a low turnout at the bond auction where the government only got Ksh14 billion in offers from investors compared to the Ksh25 billion target. Out of the amount offered, CBK only accepted Ksh10 billion leaving the Ksh15 deficit.
Notably, this change in investors' interest comes at a time when several foreign investors in the country were complaining of high taxation.
