Kenya’s tech sector has emerged as the top destination for foreign direct investment (FDI), surpassing traditional sectors like banking, manufacturing, and retail. This shift underscores the rapid growth of the country’s digital economy.
According to the latest data from the Kenya National Bureau of Statistics (KNBS), foreign investment in the tech sector spiked by 71% to KES 64.7 billion ($500.9 million) in 2024. This surge has propelled the tech industry to account for more than a quarter of Kenya’s total FDI inflows, which amounted to KES 242.6 billion ($1.8 billion) last year, up from less than 10% in 2020.
In addition to official FDI figures, Kenyan startups raised an impressive $638 million (KES 82.3 billion) in 2024, representing over a third of Eastern Africa’s total VC funding of $1.9 billion. This combined influx of FDI and VC investments highlights a clear shift of foreign capital towards digital technologies.
The KNBS report highlighted that the Information and Communication sector attracted the largest FDI inflows, reaching KES 64.7 billion in 2024. This signals sustained investor interest in Kenya’s digital economy and innovation landscape.
While tech saw a significant boost, other industries saw more modest inflows. Banking and insurance received KES 45.3 billion ($350.7 million), manufacturing drew KES 32.5 billion ($251.6 million), and wholesale and retail recorded KES 48.3 billion ($373.9 million). However, the latter experienced a decline from the previous year when it was the leading FDI recipient.
Preliminary data for the first half of 2025 indicates that the tech sector has already attracted around KES 38 billion ($294.2 million) in investments, positioning it to maintain its leading position for a second consecutive year.
The surge in tech investments can be largely attributed to regulatory changes. In 2023, President William Ruto eliminated a long-standing rule mandating foreign tech companies to relinquish a 30% ownership stake to local partners. This move removed a barrier for multinational tech giants like Amazon Web Services (AWS), Microsoft, and Google, enabling them to expand their operations in Kenya.
While KNBS data tracks inflows into traditional sectors, a substantial portion of Kenya’s digital economy is driven by venture-backed startups. Companies such as M-KOPA, Workpay, BasiGo, and Shukhiba continue to attract significant funding, driving innovation and expanding access to digital services nationwide.
With increasing investment inflows, Kenya is solidifying its position as a regional tech investment hub, reshaping the flow of foreign capital in East Africa.
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