Why are investors trooping in but there are no jobs?

Monday November 11 2019

Last Friday, the Business Daily had a unique advertisement on the back page. It was an-eighth-of-a-page ad by a person with 25 years of multinational experience, seeking a job as a director of finance or administration. It appeared again in the Friday edition of the Daily Nation, this time with the poster open to the additional position of general manager.

This is one more confusing signal about the state of the economy. All around you have signs of things being dire for the country. Economist David Ndii, in a TV interview last month, said that the country was in free fall till the next election, unable to change political course.

In October, we had two positive reports from global banks. The 2019 Absa Africa Financial Markets Index report, ranked Kenya as the third-most investor-friendly country in Africa. And Kenya was number 53 in the World Bank “Doing Business” report, an improvement from 63.


The American Chamber of Commerce just celebrated the arrival of five multinationals to Kenya - Cigna, and Abbot Laboratories who are both in health services, and Corteva an agricultural seed company. There was also the American Tower Corporation and Emerging Capital Partners who bought a majority stake in Artcaffe that has expanded rapidly across Nairobi this year.

And recently at a private briefing, a top manager at Kenya Airways spoke of being on a recent KQ flight to Amsterdam. As was his habit, he joined the crew in saying a greeting and farewell to the passengers as they disembarked at Schiphol. He was shocked that the full flight did not have a single black Kenyan passenger on board.


The foreigner’s optimism combined with the local pessimism and lack of appreciation of things local is perplexing. So what do foreign investors see, that locals don’t? Is it that things are so bad in other frontier and emerging markets that Kenya, with all the problems local business owners face every day, is a viable place to invest their millions? The highway from JKIA to top hotels, at night or when there’s no traffic, is beautiful, with gleaming tall buildings, Porsche and Burger King outlets.


Is it a lack of positive news? There are supplements on farmers in the Saturday newspapers. But the real estate ones have disappeared, as the auctioneer pages on Monday have increased. Most Kenyans are quite secretive about their wealth and income. They will not broadcast when they are doing well. This engenders bad vibes within families. There is also the fear that KRA reads newspapers to see who they have overlooked. It takes deep statistics and appearances to decipher local wealth trends. But Kenyans also copy each other in pursuit of successful ventures, and that may result in empty malls and apartment buildings.

Could it be that if every local business person says there is no money is circulation, and that the economy is bad, then it becomes bad? And it would be nice if the national and county governments paid off their outstanding suppliers before embarking on grandiose new projects.

What else can the government do, to enable people 'kwa ground' to feel the goodness of the economy that foreigners are seeing? The Government launched Stawi for informal traders. But the gap remains of providing vital working capital for businesses with fewer collateral restrictions. At the Absa report launch, Treasury Cabinet Secretary, Ukur Yatani said that Parliament should follow the President’s directive, and do away with interest rate caps to give a stimulus to the local business economy. Parliament did just that!

Twitter: @bankelele