Kenya: the country you can’t afford to ignore
Kenya could unlock $10bn to finance the SDGs. This is how.
Kenya is in the sweet spot now. It is still eligible for Official Development Assistance (ODA), as a lower middle income country. Yet it has been progressing fast towards the middle-income country status. It is vital that Kenya takes advantage of this to leverage more private sector investment.
The trendiest country for impact investors
One could say that Kenya is crowded with impact investors: it’s the first destination of impact investment flows in East Africa, and the second in Africa as a whole (after South Africa). More than 100 impact investors are operating in Kenya. Between 2005 and 2015, they invested more than USD 4bn in Kenya (the equivalent of roughly half of foreign direct investment (FDI) in the same period).
The momentum in Kenya is strong. FDI flows increased by 27% to USD 1.6 billion in Kenya (in a period when FDI fell by 13% globally). Investor preference towards impact also grew by 10% between 2016 and 2018. These are crucial signals at a time when more local and private capital are needed to help achieve the SDGs in the country. The stakes are high: 80% of the population is younger than 35 and 39% of the population lives in poverty.
Kenya is demonstrating leadership in social and environmental action. The country is well ahead in its energy transition towards renewables, with half of its electricity coming from geothermal sources and Africa’s largest wind farm. The access to electricity rate in Kenya jumped considerably from 19% in 2010 to 75% by 2018, as a result of public and private investors, both commercial and impact. They focused their efforts on the energy sector, and invested heavily in off-grid energy and last-mile distribution projects, such as Sanergy or Sunculture (2018 GSG Millennial Honour Awardee).