Nairobi: Kenya is missing out on a potentially huge investment cash inflow from its nationals abroad who do not get information on opportunities in the country, a new government commissioned study has established. Preliminary results from a study by the International Organisation for Migration for the government found that about 60 per cent of Kenyans living in the UK do not get information on how they can invest their money locally.
This is despite the group having significant financial muscle, as evidenced by millions of dollars in remittances that the group sends to friends and relatives back home every month.
According to Andrew Toboso, the Director of Strategy at the Kenya Vision 2030 Delivery Secretariat, only about 15 per cent of the remittances is used in productive investments, while a 10th of the money goes to 'community development' projects.
'Despite a modest percentage of Kenyans in the diaspora belonging to business networks, the greater ratio of their remittances still goes to consumption or family use' said Mr Toboso.
The study found that 75 per cent of remittances are used to finance household consumption budgets. World Bank statistics show that about a million Kenyans who live abroad have sent back an estimated $3 billion (about Sh240 billion) in the past five years. More than half of the remittances ($1.6 billion or 4.9 per cent of GDP) were sent between 2008 and 2009.
Egged on by the statistics, government agencies are seeking to increase the proportion of remittances from Kenyans in the diaspora that go into gainful investment by holding diaspora investment expos in foreign countries to promote emerging business opportunities available in the country.
The Kenya Investment Authority (Ken Invest), Kenya Overseas Business Alliance (KOBA) and Kenya Vision 2030 Delivery Secretariat and the respective Kenya high commissions have organised two diaspora investment expos next month in UK and US.
According to Mr Geoffrey Kilonzo, the Country Representative KOBA, eight private companies including CFC Stanbic, Apex Africa Capital Limited, Thika Greens Limited and Kenya Power and Lightning Company, Cooperative Bank and National Housing Corporation will be attending the expos. Others are the Capital Markets Authority, Brand Kenya and ministries.
'The Diaspora conferences and expos to be held at the Cumberland Hotel, London and DCU Convention Centre, Boston are targeted at addressing this gap. The government agencies are teaming up with Kenyan private sector players to woo the Diaspora to invest more at home' he said.
The International Organisation for Migration (IOM) study also found that close to a third (32 per cent) of Kenyans migrating to the UK go to search for job opportunities. A quarter (26 per cent) travel to study, 17 per cent for family reunification and 12 per cent for work related reasons. Almost all (99 percent) of respondents expressed their desire to come back to upon retirement.
'The expos are designed to expose Kenyans in the diaspora to investment opportunities available in the country' said Ms Sheila Yieke, General Manager Legal and Co-operative Affairs, Kenya Investment Authority.