NAIROBI, March 27 (Xinhua) -- Kenya's investment environment will remain favorable in the coming months ahead of Aug. 8 elections, Nairobi-based investment firm Cytonn said Monday.
"We expect that the upcoming electioneering period will not have significant effect on Foreign Direct Investment (FDI) as foreign investors with a long-term view of the market continue driving FDI inflows," Cytonn said in its analysis report.
According to the firm, towards the end of 2007 when Kenya was going to elections, FDI inflows peaked at 450 million U.S. dollars as foreign investors did not shy away during the run-up to the polls.
"However, as a result of the post-election violence, FDIs drastically reduced to their lowest level in the last seven years, which also contributed to Kenya recording its slowest GDP growth of 0.2 percent," noted Cytonn.
Similarly, in the 2013 election period, the election had no noticeable impact on FDI flows, when there was a continued steady increase in inflows.
"This is an indication that investors do not entirely use the election as a basis to determine whether and when to invest, rather it is the political goodwill and commitment of the government to ensure there is political stability during and after the election period," noted the analysts.
Cytonn noted the government's increasing investment in security through measures such as CCTV installation, higher police recruitment and investment in equipment.
"We expect the general elections to have a neutral effect on FDI's as the government fulfils its commitment to a politically stable business environment during and after elections," concluded Cytonn.
Kenya has recorded declining numbers of terror attacks since 2013. A number of international brands including Volkswagen, Wrigley, Peugeot have announced planned entry into the Kenyan market this year.
