Investing in Kenya’s People: Valuing the Benefits of the U.S.-Kenya Relationship Chapter 3 (Part 2 of 2)

Finding 10: American companies have contributed approximately USD 294.2 million annually in foreign direct investment (FDI), creating roughly 1,009 new local jobs each year since 2015 to grow the Kenyan economy.

Since 2010, 85 American companies have invested an estimated total of USD 2.93 billion in Kenya through greenfield investments and acquiring physical assets (as opposed to mergers and acquisitions or leasing of existing facilities). Foreign direct investment varies from year to year, but U.S.-based companies have generated about USD 294.2 million annually in investment capital and 1,009 new jobs per year on average from 2015 onwards to benefit the Kenyan economy (Financial Times, n.d.). The United States leads all countries in creating jobs that are occupied by Kenyans. Table 3 shows the top ten U.S.-based companies in terms of foreign direct investment dollars between 2010 and 2019.

Renewable energy, transportation and warehousing operations, and food and beverage industries attracted the largest volume of U.S. investment capital, for a total of USD 1.8 billion invested since 2010 (see Figure 10). Job creation is led by manufacturing operations in the food and beverage and transportation industries, followed by software and information technology services. With recurring investments from leading American tech companies, such as Oracle and Microsoft, and more recent investments from Amazon and Facebook, American companies are making investments in future technologies as well as more traditional manufacturing operations.

Finding 11: Visiting U.S. tourists generate an estimated USD 190.7 million in annual revenues for the Kenyan economy through tourism receipts and visa-related fees.

Between 2013-2017, 15.4 percent of Kenya’s total annual exports on average have been in the form of international tourism (WDI). U.S. tourists comprise about 10 percent of the 1.1 million tourists that visit Kenya from around the world every year, which translates into an annual U.S. contribution of roughly USD 190.7 million into the Kenyan economy (see Figure 11).

As the third largest tourism economy in sub-Saharan Africa, 9.3 percent of Kenya’s employment is in the tourism sector (World Travel and Tourism Council, 2019). Hotels, wildlife safaris, handicrafts, and other industries offer livelihood opportunities to Kenya’s low- and middle-income households to help secure a better future for their families.

Beyond direct expenditures in the Kenyan economy, U.S. tourists also account for visa and administrative revenues for the Kenyan government of roughly USD 5 million every year, through the levy of visa and administrative fees on American visitors.

Finding 12: Overseas Kenyans living and working in the United States sent home USD 517.6 million annually on average to their families and communities.

In Chapter 2, we discussed the volume of Kenyan students, scholars, and workers that reside in the United States, either temporarily or permanently. Many of these Kenyans living overseas continue to maintain strong ties to their families and communities back in Kenya, such as through sending remittances: a transfer of money usually by a foreign worker to an individual in their home country. These remittances are an important form of financial support to family members to weather shocks or supplement their earnings, but they can also provide capital to spur individual entrepreneurial activity or invest in Kenyan businesses or real estate.

The United States is the second largest source country for remittances back to Kenya. Kenyan individuals, families, and enterprises received an average of USD 517.6 million annually from senders in the United States between 2013 and 2017 (see Figure 12). These transfers from the United States to Kenya have risen steadily over the past decade, despite the fallout from the great recession of 2008. In recent years, the amount of yearly remittances received by Kenya has exceeded the total remittances received by all other Eastern African countries combined (KNOMAD, 2019).