The Central Bank of Kenya (CBK) anticipates a surge in foreign inflows into the Kenyan economy in 2024, marking a significant turnaround since the end of 2016. If projections hold, it would signify the first increase in foreign inflows and the highest amount received since 2021, ending a challenging period marked by investor divestment.
CBK Governor revealed expectations of a USD 1.1 billion influx, primarily driven by Foreign Direct Investment (FDI) and disbursements from lenders such as a EUR 88 million loan from the African Development Bank.
The prospect of Kenya becoming a more attractive destination for foreign investors may prompt interest rate reductions. Additionally, the recent strengthening of the Kenyan Shilling, evidenced by its gains against the dollar over the past two consecutive weeks, contrasts with its downward trajectory in recent years, enhancing Kenya’s appeal to foreign investors grappling with foreign exchange losses.
The anticipated increase in inflows is poised to stabilize the local exchange rate and bolster the country’s hard currency reserves, mitigating volatility.
