An American Company Investing in Kenya Essay

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Why might an American company want to invest in "your country"?

The African country in consideration is Kenya. Kenya is the biggest economy in East Africa and is ranked as the sixth biggest one in the African Sub Sahara. It is a comparatively big nation with just about 45 million individuals. Its capital city, Nairobi, is one of the most advanced cities in Africa and is home to some of the global businesses and establishments such as the United Nations. One of the key reasons for investing in this nation takes into account its strategic geographic position as a hub for East Africa with a port encompassed by deep waters, and macroeconomic stability. In addition, Kenya has superior skilled labor in relation to its neighboring nations and the boats of being the most developed banking sector in the expanse. Kenya is a suitable area for foreign direct investment owing to the fact that in the past number of years, the growth rate of the nation has been steady at approximately 5- 6 percent (Foreign and Commonwealth Office, 2017). Moreover, Kenya has a workforce that is massive and educated. This implies that aside from investment, it is possible to obtain a labor force that is well versed with technology and what is required to advance a business Another reason for investing in Kenya aside from its geopolitical position, educated workforce and growth potential is the advancement in technology.

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Statistics indicate that the prevailing internet penetration of Kenya stands at 54.8 percent of the general population. This is significantly better than the international average rate of 40 percent. Most of all, Kenya is one of the nations embracing and progressing technology with 10 percent of all mobile money transactions across the globe taking place there (Foreign and Commonwealth Office, 2017).

What are the main risks an American company would face if they chose 'your country' for a foreign direct investment?

There are key risks that an American company would face in selecting Kenya for a FDI. One of the risks is political risk. This is associated to the risk that an independent host government will unpredictably alter the rules under which businesses function and operate. Kenya has previously experienced a great deal of violence and instability owing to political divides. Another concern is the prevailing ethnic divisions within the country that continue to be an instigator of violence in times of elections, which can spark violence in the country. An additional risk for investing risk in Kenya takes into account the criminal undertaking within the nation. This is important because the aspect of crime can substantially increase the costs of conducting business in Kenya.….....

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"An American Company Investing In Kenya" (2017, August 20) Retrieved June 6, 2026, from
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"An American Company Investing In Kenya" 20 August 2017. Web.6 June. 2026. <
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"An American Company Investing In Kenya", 20 August 2017, Accessed.6 June. 2026,
https://www.aceyourpaper.com/essays/american-company-investing-kenya-2165868
   

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